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Exhibit 10.19
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of December 18, 2000, by and between LEXENT
INC., a Delaware corporation (the "Company"), and Xxxx X. Xxxxxxx (the
"Employee").
WITNESSETH:
WHEREAS the Company desires to induce the Employee to enter into employment
with the Company for the period provided in this Agreement, and the Employee is
willing to accept such employment with the Company on a full-time basis, all in
accordance with the terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the premises hereof and the
mutual covenants contained herein, the parties hereto hereby covenant and agree
as follows:
1. Employment.
(a) The Company hereby agrees to employ the Employee, and the Employee
hereby agrees to accept such employment with the Company,
commencing on , 2000 (the "Commencement Date") and
continuing for the period set forth in Section 2 hereof, all upon
the terms and conditions hereinafter set forth.
(b) The Employee affirms and represents that as of the commencement of
his employment by the Company, he was under no obligation to any
former employer or other party which is in any way inconsistent
with, or which imposes any restriction upon, the Employee's
acceptance of employment hereunder with the Company, the
employment of the Employee by the Company, or the Employee's
undertakings under this Agreement.
2. Term of Employment. Unless earlier terminated as provided in this
Agreement, the term of the Employee's employment under this Agreement shall be
for a period beginning on the Commencement Date and ending on , 2004.
The period from the Commencement Date until ,2004, or, in the event
that the Employee's employment hereunder is earlier terminated as provided
herein, such shorter period, is hereinafter called the "Employment Term" (the
"Employment Term").
3. Duties. The Employee shall be employed as Senior Vice
President -- Human Resources, of the Company, shall faithfully perform and
discharge such duties as inhere in the positions of Senior Vice
President -- Human Resources of the Company as may be specified in the By-laws
of the Company with respect to such positions, and shall also perform and
discharge such other duties and responsibilities consistent with such position
as the Board of Directors of the Company (the "Board of Directors") shall from
time to time determine. The Employee shall report to the Chief Executive Officer
of the Company. The Employee shall perform his duties principally at offices of
the Company in New York City, New York, with such travel to such other locations
from time to time as the Chief Executive Officer may reasonably prescribe.
Except as may otherwise be approved in advance by the Board of Directors, and
except during vacation periods and reasonable periods of absence due to
sickness, personal injury or other disability, the Employee shall devote his
full business time throughout the Employment Term to the services required of
him hereunder. The Employee shall render his business services exclusively to
the Company and its subsidiaries during the Employment Term and shall use his
best efforts, judgment and energy to improve and advance the business and
interests of the Company and its subsidiaries in a manner consistent with the
duties of his position.
4. Compensation.
(a) Salary. As compensation for the performance by the Employee of
the services to be performed by the Employee hereunder during the
Employment Term, the Company shall pay the Employee a base salary
at the annual rate of Two Hundred Twenty Thousand Dollars
($220,000) (said amount, together with any increases thereto as
may be determined from time to time by the Board of Directors in
its sole discretion, being hereinafter referred to as "Salary").
The Employee's Salary shall be reviewed mid-year 2001, and
Employee will be
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eligible for an increase in his base salary based upon a review
of Employee's performance. Any Salary payable hereunder shall be
paid in regular intervals in accordance with the Company's
payroll practices from time to time in effect.
(b) Bonus. The Employee shall be eligible to receive bonus
compensation from the Company in respect of each fiscal year (or
portion thereof) occurring during the Employment Term in an amount
targeted at 40% of his Salary (pro rated for any portion of a
fiscal year occurring during the Employment Term) if the Company
achieves the target performance objectives established by the
Compensation Committee of the Board of Directors (the
"Compensation Committee") with respect to such fiscal year. The
Employee shall also be eligible to receive additional bonus
compensation from the Company in respect of each fiscal year (or
portion thereof) occurring during the Employment Term for
exceptional performance as may be determined by the Compensation
Committee in its sole discretion.
5. Other Benefits; Options.
(a) General. During the Employment Term, the Employee shall:
(i) be eligible to participate in employee fringe benefits and
pension and/or profit sharing plans that may be provided by
the Company for its senior executive employees in accordance
with the provisions of such plans, as may be in effect from
time to time;
(ii) be eligible to participate in any medical and health plans or
other employee welfare benefit plans that may be provided by
the Company for its senior executive employees in accordance
with the provisions of any such plans, as may be in effect
from time to time;
(iii) be entitled to the number of paid vacation days in each
calendar year determined by the Company from time to time
for its senior executive officers, provided that such number
of paid vacation days in each calendar year shall not be
less than fifteen (15) work days (three calendar weeks). The
Employee shall also be entitled to all paid holidays given
by the Company to its senior executive officers;
(iv) be entitled to sick leave, sick pay and disability benefits
in accordance with any Company policy that may be applicable
to senior executive employees from time to time; and
(v) be entitled to reimbursement for all reasonable and necessary
out-of-pocket business expenses incurred by the Employee in
the performance of his duties hereunder in accordance with
the Company's normal policies from time to time in effect.
(b) Grant of Initial Options. In connection with the execution and
delivery of this Agreement by the Employee, the Company is
granting to the Employee options ("Initial Options") to purchase
100,000 shares of Company Common Stock, $.001 par value ("Common
Stock"), at a purchase price equal to the Fair Market Value (as
defined in (d) below) on the Commencement Date, of which options
to purchase 25% of such shares of Common Stock shall vest on the
first anniversary of the Commencement Date and options to purchase
the remaining shares of Common Stock shall vest in thirty-six
equal increments over the thirty-six month period beginning at the
end of the month following the first anniversary of the
Commencement Date, all as provided in the Stock Option Agreement
of even date herewith between the Company and the Employee.
(c) Grant of Subsequent Options. In connection with his continued
employment by the Company, on the first anniversary of the
Commencement Date, and on each of the subsequent anniversaries
thereof during the Employment Term, the Company agrees to grant
the Employee options ("Subsequent Options") to purchase a minimum
of 10,000 shares (as adjusted equitably for stock dividends, stock
splits, combinations, etc.) of Common Stock at a purchase price
equal to the Fair Market Value (as defined in (d) below) of the
Common Stock on the pertinent anniversaries. The Subsequent
Options shall vest in accordance with the following schedule: 25%
shall vest one year from the grant date of the Subsequent Options
during the Employment
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Term, and options to purchase the remaining shares issued
pursuant to each grant of the Subsequent Options shall vest in
equal increments over the subsequent 36 months, as more fully
described in 5(b) above. Each grant of these Subsequent Options
shall be pursuant to specific terms set forth in a stock option
agreement between the Company and the Employee.
(d) Fair Market Value. "Fair Market Value" means as of any date, the
value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System, the Fair Market Value of a share of Common
Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such
system or exchange (or the exchange with the greatest volume
of trading in Common Stock) on the trading day of the day of
grant of the particular Options and as reported in the Wall
Street Journal or such other source as the Compensation
Committee deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the National Market System thereof) or is regularly quoted
by a recognized securities dealer but selling prices are not
reported, the Fair Market Value of a share of Common Stock
shall be the average between the high bid and low asked
prices for the Common Stock on the last market trading day
prior to the day of grant of the particular Subsequent
Options and as reported in the Wall Street Journal or such
other source as the Compensation Committee deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good
faith by the Compensation Committee.
6. Confidential Information. The Employee hereby covenants, agrees and
acknowledges as follows:
(a) The Employee has and will have access to and will participate in
the development of or be acquainted with confidential or
proprietary information and trade secrets related to the business
of the Company and any present or future subsidiaries or
affiliates of the Company (collectively with the Company, the
"Companies"), including but not limited to (i) customer lists;
related records and compilations of information; the identity,
lists or descriptions of any new customers, referral sources or
organizations; financial statements; cost reports or other
financial information; contract proposals or bidding information;
business plans; training and operations methods and manuals;
personnel records; software programs; reports and correspondence;
and management systems, policies or procedures, including related
forms and manuals; (ii) information pertaining to future
developments such as future marketing or acquisition plans or
ideas, and potential new business locations and (iii) all other
tangible and intangible property, which are used in the business
and operations of the Companies but not made public. The
information and trade secrets relating to the business of the
Companies described hereinabove in this paragraph (a) are
hereinafter referred to collectively as the "Confidential
Information", provided that the term Confidential Information
shall not include any information (A) that is or becomes generally
publicly available (other than as a result of violation of this
Agreement by the Employee), (B) that the Employee receives on a
nonconfidential basis from a source (other than the Companies or
their representatives) that is not known by him to be bound by an
obligation of secrecy or confidentiality to any of the Companies
or (C) that was in the possession of the Employee prior to
disclosure by the Companies.
(b) The Employee shall not disclose, use or make known for his or
another's benefit any Confidential Information or use such
Confidential Information in any way except as is in the best
interests of the Companies in the performance of the Employee's
duties under this Agreement. The Employee may disclose
Confidential Information when required by a third party and
applicable law or judicial process, but only after providing
immediate notice to the
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Company of any third party's request for such information, which
notice shall include the Employee's intent to disclose any
Confidential Information with respect to such request.
(c) The Employee acknowledges and agrees that a remedy at law for any
breach or threatened breach of the provisions of this Section 6
would be inadequate and, therefore, agrees that the Companies
shall be entitled to seek injunctive relief in addition to any
other available rights and remedies in case of any such breach or
threatened breach by the Employee; provided, however, that nothing
contained herein shall be construed as prohibiting the Companies
from pursuing any other rights and remedies available for any such
breach or threatened breach.
(d) The Employee agrees that upon termination of his employment with
the Company for any reason, the Employee shall forthwith return to
the Company all Confidential Information in whatever form
maintained (including, without limitation, computer discs and
other electronic media).
(e) The obligations of the Employee under this Section 6 shall, except
as otherwise provided herein, survive the termination of the
Employment Term and the expiration or termination of this
Agreement.
(f) Without limiting the generality of Section 12 hereof, the Employee
hereby expressly agrees that the foregoing provisions of this
Section 6 shall be binding upon the Employee's heirs, successors
and legal representatives.
7. Termination of Employment.
(a) The Employee's employment hereunder shall be terminated upon the
occurrence of any of the following:
(i) death of the Employee;
(ii) the Employee's inability to perform his duties on account of
disability or incapacity for a period of one hundred eighty
(180) or more days, whether or not consecutive, within any
period of twelve (12) consecutive months;
(iii) the Company giving written notice, at any time, to the
Employee that the Employee's employment is being terminated
for "Cause" (as defined in (b) below);
(iv) the Company giving written notice, at any time, to the
Employee that the Employee's employment is being terminated
or is not being renewed, other than pursuant to clause (i),
(ii) or (iii) above ("Without Cause");
(v) the Employee terminates his employment hereunder for "Good
Reason" (as defined in (c) below); or
(vi) the Employee terminates his employment hereunder for any
reason whatsoever (whether by reason of retirement,
resignation or otherwise), ("Without Good Reason"), other
than in accordance with (v) above.
(b) Cause. The following actions, failures and events by or affecting
the Employee shall constitute "Cause" for termination within the
meaning of clause (iii) of Section 7 (a) above:
(i) indictment for or conviction of the Employee of, or the
entering of a plea of nolo contendere by the Employee with
respect to, having committed a felony;
(ii) abuse of controlled substances or alcohol or acts of
dishonesty or moral turpitude by the Employee that are
materially detrimental to one or more of the Companies;
(iii) acts or omissions by the Employee that the Employee knew
were likely to damage the business of one or more of the
Companies;
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(iv) negligence by the Employee in the performance of, or
disregard by the Employee of his material obligations under
this Agreement or otherwise relating to his employment, which
negligence or disregard continue unremedied for a period of
fifteen (15) days after written notice thereof to the
Employee; or
(v) failure by the Employee to obey the reasonable and lawful
orders and policies of the Board of Directors that are
consistent with the provisions of this Agreement, which
failure to obey continues unremedied for a period of fifteen
(15) days after written notice thereof to the Employee.
(c) Good Reason. The Employee may terminate his employment with the
Company for "Good Reason" if, without the Employee's written
consent, there is:
(i) a material adverse change in the Employee's title or Salary;
(ii) the assignment of duties to the Employee materially and
adversely inconsistent with the Employee's position;
(iii) any requirement by the Company that the Employee's primary
office location be other than in the New York City
metropolitan area; or
(iv) a change in the Employee's reporting relationship from
reporting to the Chief Executive Officer to any other other
Company official, except that a change in reporting
relationship to the Chairman of the Board, Chief Operating
Officer or the Chief Administrative Officer shall not
constitute "Good Reason".
8. Payments Upon Termination.
(a) Termination Without Cause. In the event that the Employee's
employment is terminated by the Company Without Cause or by the
Employee for Good Reason during the Employment Term and provided
that the Employee is acting in accordance with his obligations
pursuant to Section 10, then the Company shall pay to the
Employee, as severance pay or liquidated damages or both, monthly
payments at the rate per annum of his Salary at the time of such
termination for a period of:
(i) eighteen (18) months after such termination if such
termination occurs in the first month during the period
between the Commencement Date and the date six months
following the Commence Date ("Initial Period");
(ii) seventeen (17) months after such termination if such
termination occurs in the second month of the Initial Period;
(iii) sixteen (16) months after such termination if such
termination occurs in the third month of the Initial Period;
(iv) fifteen (15) months after such termination if such
termination occurs in the fourth month of the Initial Period;
(v) fourteen (14) months after such termination if such
termination occurs in the fifth month of the Initial Period;
(vi) thirteen (13) months after such termination if such
termination occurs in the sixth month of the Initial Period;
and
(vii) twelve (12) months after such termination if such termination
occurs after the end of the Initial Period.
(b) Payments Limited. Notwithstanding anything to the contrary
expressed or implied herein, except as required by applicable law
and except as set forth in Sections 4(b) and 8(a) above, neither
the Company nor any of its affiliates shall be obligated to make
any payments to the Employee or on his behalf of whatever kind or
nature by reason of the Employee's cessation of
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employment (including, without limitation, by reason of termination
of the Employee's employment by the Company for Cause, Without
Cause or otherwise or by the Employee for Good Reason), other than
(i) such amounts, if any, of his Salary and bonus as shall have
accrued and remained unpaid as of the date of said cessation and
(ii) such other amounts, if any, which may be then otherwise
payable to the Employee pursuant to the terms of the Company's
benefits plans or pursuant to clause (v) of Section 5(a) above.
(c) Interest. No interest shall accrue on or be paid with respect to
any portion of any payments under this Section 8.
(d) The obligations of the Company under this section 8 shall, except
as otherwise provided herein, survive the termination of the
Employment Term and the expiration or termination of this
Agreement.
9. Non-Assignability.
(a) Neither this Agreement nor any right or interest hereunder shall
be assignable by the Employee or his beneficiaries or legal
representatives without the Company's prior written consent;
provided, however, that nothing in this Section 9(a) shall
preclude the Employee from designating a beneficiary to receive
any benefit payable hereunder upon his death or incapacity. This
Agreement may not be assigned by the Company except with the
Employee's prior written consent, provided, however, that the
Company may assign this Agreement to an affiliate of the Company
with the financial resources to fulfill the Company's obligations
hereunder.
(b) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to exclusion, attachment, levy or similar process
or to assignment by operation of law, and any attempt, voluntary
or involuntary, to effect any such action shall be null, void and
of no effect.
10. Restrictive Covenants.
(a) Competition. During the Employment Term and, in the event the
Employee's employment is terminated, during the period (the
"Applicable Continuation Period") following such termination and
continuing until (i) the last payment is made to the Employee
pursuant to Section 8(a) hereof, as the case may be, or (ii) in
the case of a termination of the Employee's employment pursuant to
Section 7(a)(iii) or (v) hereof, the first anniversary of the date
of such termination, the Employee will not directly or indirectly
(as a director, officer, executive employee, manager, consultant,
independent contractor, advisor or otherwise) engage in
competition with, or own any interest in, perform any services
for, participate in or be connected with any business or
organization which engages in competition with any of the
Companies within the meaning of Section 10(d), provided, however,
that the provisions of this Section 10(a) shall not be deemed to
prohibit the Employee's ownership of not more than two percent
(2%) of the total shares of all classes of stock outstanding of
any publicly held company, or ownership, whether through direct or
indirect stock holdings or otherwise, of not more than one percent
(1%) of any other business.
(b) Non-Solicitation. During the Employment Term and during the
Applicable Continuation Period, the Employee will not directly or
indirectly induce or attempt to induce any employee of any of the
Companies to leave the employ of the Company or such subsidiary or
affiliate, or in any way interfere with the relationship between
any of the Companies and any employee thereof.
(c) Non-Interference. During the Employment Term and during the
Applicable Continuation Period, the Employee will not directly or
indirectly hire, engage, send any work to, place orders with, or
in any manner be associated with any supplier, contractor,
subcontractor or other business relation of any of the Companies
if such action by him would have an adverse effect on
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the business, assets or financial condition of any of the
Companies, or materially interfere with the relationship
between any such person or entity and any of the Companies.
(d) Certain Definitions.
(i) For purposes of this Section 10, a person or entity
(including, without limitation, the Employee) shall be
deemed to be a competitor of one or more of the Companies,
or a person or entity (including, without limitation, the
Employee) shall be deemed to be engaging in competition
with one or more of the Companies, if such person or entity
conducts, or, to the knowledge of the Employee, plans to
conduct, the Specified Business (as hereinafter defined)
as a significant portion of its business in any of the
markets served by the Companies or, in the case of a person
or entity pursuing a business strategy of providing
telecommunications infrastructure services anywhere in the
continental United States.
(ii) For purposes of this Agreement, "Specified Business" means
(A) providing outsourced telecommunications infrastructure
services to local or long distance telecommunications
providers or engaging in any business conducted by the
Company at the time of termination of the Employee's
employment with the Company or (B) conducting, operating,
carrying out or engaging in the business of managing any
entity described in clause (A).
(e) Certain Representations of the Employee. In connection with the
forego-ing provisions of this Section 10, the Employee represents
that his experience, capabilities and circumstances are such that
such provisions will not prevent him from earning a livelihood.
The Employee further agrees that the limitations set forth in this
Section 10 (including, without limitation, time and territorial
limitations) are reasonable and properly required for the adequate
protection of the current and future businesses of the Companies.
It is understood and agreed that the covenants made by the
Employee in this Section 10 (and in Section 6 hereof) shall
survive the expiration or termination of this Agreement.
(f) Injunctive Relief. The Employee acknowledges and agrees that a
remedy at law for any breach or threatened breach of the
provisions of Section 10 hereof would be inadequate and,
therefore, agrees that the Company and any of its subsidiaries or
affiliates shall be entitled to seek injunctive relief in addition
to any other available rights and remedies in cases of any such
breach or threatened breach; provided, however, that nothing
contained herein shall be construed as prohibiting the Company or
any of its affiliates from pursuing any other rights and remedies
available for any such breach or threatened breach.
11. Representations and Warranties. The Employee represents and warrants
that he is not subject to or a party to any agreement, contract, covenants,
order or other restriction which in any way prohibits, restricts or impairs the
Employee's ability to enter into this Agreement and carry out his duties and
obligations hereunder. Each party hereto represents and warrants to the other
that (i) each has the full legal right and power and all authority and approvals
required to enter into, execute and deliver this Agreement and to perform fully
all of his or its obligations hereunder; and (ii) this Agreement has been duly
executed and delivered and constitutes a valid and binding obligation of each
party, enforceable in accordance with its terms.
12. Binding Effect. Without limiting or diminishing the effect of Section
9 hereof, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, successors, legal representatives and
assigns.
13. Notices. All notices which are required or may be given pursuant to
the terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and (i) delivered personally, (ii) mailed by
certified or registered mail, return receipt requested and postage prepaid,
(iii) sent via a nationally recognized overnight courier or (iv) sent via
facsimile confirmed in writing to the recipient, if to the Company at the
Company's principal place of business, and if to the Employee, at his home
address most recently filed with the Company, or to such other address or
addresses as either party shall have designated in
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writing to the other party hereto, provided, however, that any notice sent by
certified or registered mail shall be deemed delivered on the date of delivery
as evidenced by the return receipt.
14. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. Severability. The Employee agrees that in the event that any court of
competent jurisdiction shall finally hold that any provision of Section 6 or 10
hereof is void or constitutes an unreasonable restriction against the Employee,
the provisions of such Section 6 or 10 shall not be rendered void but shall
apply with respect to such extent as such court may judicially determine
constitutes a reasonable restriction under the circumstances. If any part of
this Agreement other than Section 6 or 10 is held by a court of competent
jurisdiction to be invalid, illegible or incapable of being enforced in whole or
in part by reason of any rule of law or public policy, such part shall be deemed
to be severed from the remainder of this Agreement for the purpose only of the
particular legal proceedings in question and all other covenants and provisions
of this Agreement shall in every other respect continue in full force and effect
and no covenant or provision shall be deemed dependent upon any other covenant
or provision.
16. Waiver. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
17. Entire Agreement; Modifications. This Agreement constitutes the entire
and final expression of the agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements, oral and written, between the
parties hereto with respect to the subject matter hereof. This Agreement may be
modified or amended only by an instrument in writing signed by both parties
hereto.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company and the Employee have duly executed and
delivered this Agreement as of the day and year first above written.
LEXENT INC.
By: /s/
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Name:
Title:
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XXXX X. XXXXXXX
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