Exhibit 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated March 4, 1998, by and between Carrier One AG,
a company duly incorporated under the laws of Switzerland, having its registered
offices at Regus Building, Stockerhof, Xxxxxxxxxxxxxxxx 00X, 0000 Xxxxxx,
Xxxxxxxxxxx (the "Company") and Xxxxxxx Xxxxx ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to assure itself of the Executive's services,
and the Executive desires to be employed by the Company;
WHEREAS, the Company's parent, Carrier One, LLC, a Delaware (USA)
limited liability company ("Carrier One"), the Executive, Stig Johansson
("Johansson") Xxxxxx X. Xxxxx ("Xxxxx"), Xxxx Van Ophem ("Van Ophem"), Xxxx
Xxxxxx ("Xxxxxx"), Providence Equity Partners L.P. ("PEP") and Providence
Equity Partners II, L.P. ("PEP II" and collectively with PEP, "Providence")
have entered into that certain Securities Purchase Agreement (as amended from
time to time, the "Purchase Agreement") dated as of March 4, 1998 whereby
they shall acquire certain securities of Carrier One and Executive,
Johansson, Rizzo, Van Ophem, Xxxxxx, Providence and Carrier One have entered
into the Securityholders' Agreement (as defined in the Purchase Agreement);
WHEREAS, Providence wishes to protect the value of their investment in
Carrier One and the Company from the risk of competition posed by the Executive
and it is a condition to the Providence's performance under the Purchase
Agreement that Executive enter into this Agreement in order to assure the
Company that the Executive will continue to provide his expertise in the conduct
of the Company's business.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 BOARD OF DIRECTORS. "Board of Directors" shall mean the Board of
Directors of the Company.
1.02 CODE. "Code" means the Swiss Code of Obligations.
1.03 CONFIDENTIAL INFORMATION. "Confidential Information" means all
information, in any form or medium, that relates to the business, products,
services,
research or development of the Company or any of the Related Corporations, and
its and their suppliers or customers, including: (a) compilations of data
(whether in whole or in part) and all analyses, processes, methods, techniques,
systems, formulae, research, records, reports, manuals, documentation and models
relating thereto; (b) computer software, documentation and databases (whether
existing or in various stages of research and development); (c) identities of
and information about the Company's and the Related Corporations' suppliers and
customers and their confidential information, suppliers and customers; (d)
inventions, designs, developments, devices, methods and processes (whether or
not reduced to practice); (e) internal business information, including, without
limitation, information relating to strategic and staffing plans and practices
(including information with respect to potential acquisition targets),
marketing, promotional and sales plans, practices or programs, training
practices and programs, cost and pricing structure, and accounting and business
methods; (f) all copyrightable works; and (g) all similar or related
information. Notwithstanding the immediately foregoing sentence, the term
"Confidential Information" shall not include information which (i) becomes
generally available to the public other than as a result of disclosure by
Executive, or (ii) becomes available to Executive on a non-confidential basis
from a source other than the Company or the Related Corporations, or (iii) which
is generally known in the telecommunications industry and pertains to activities
or business not specific to the Company or any of the Related Corporations.
Information shall not be deemed to be excluded from the meaning of "Confidential
Information" merely because individual portions or components of such
information are publicly known or available.
1.04 EFFECTIVE DATE. "Effective Date" shall mean the date of this
Agreement or such later date that Executive has obtained any valid work permits
or registration documents as required by the relevant Swiss authorities.
1.05 NON-COMPETE PERIOD. "Non-Compete Period" shall mean the period
commencing on the date hereof and continuing until the end of the eighteenth
month following the date the Executive's employment is terminated or such
shorter period as may be set forth in this Agreement.
1.06. PERSON. "Person" shall mean any individual, corporation,
partnership, joint venture, limited liability company, trust or other entity.
1.07 RELATED CORPORATIONS. "Related Corporations" shall mean (a) Carrier
One; (b) any corporation of which Carrier One, directly or indirectly, owns more
than fifty percent (50%) of the outstanding equity securities having general
voting power under ordinary circumstances to elect at least a majority of the
directors of such corporation; (c) any partnership, association, joint venture
or other unincorporated organization or entity with respect to which Carrier
One, directly or indirectly, owns equity securities in an amount sufficient to
control the management of such partnership, association, joint venture or other
unincorporated organization or entity; and (d) any corporation, partnership,
association, joint venture or other unincorporated organization or entity in
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which Carrier One, directly or indirectly, has more than a fifty percent (50%)
equity interest.
ARTICLE II
CAPACITY AND SERVICES
2.01 CAPACITY AND SERVICES. The Company hereby employs Executive as the
Chief Financial Officer of the Company, and Executive hereby accepts such
employment, for the Contract Term (as defined in Section 2.03) and upon the
other terms and conditions set forth in this Agreement. During the Contract
Term, Executive shall devote his professional attention and energies on a
full-time basis to the business and affairs of the Company and the Related
Corporations and use his best efforts to promote its interests. The Executive
may not undertake any public office or any kind of activity in connection with
associations without the prior written approval of the Company, if this activity
could influence the contractual activities.
2.02 DUTIES. The Executive shall have such duties and responsibilities as
shall be assigned from time to time by the Board of Directors and as are
consistent with the duties of a Chief Financial Officer of an international long
distance telecommunications company.
2.03 CONTRACT TERM. The present Employment Agreement is concluded for an
unspecified period and may be terminated by either party provided that six (6)
months notice of termination is given in writing to the end of a month, but not
before August 31, 1999 (notice to be given before February 28, 1999) (the period
until the Executive's employment with the Company terminates being referred to
as the "Contract Term").
ARTICLE III
COMPENSATION; BENEFITS
3.01 BASE SALARY. The Company shall pay Executive a base salary at the
rate of 260,000 SFr per annum, payable in arrears on a monthly basis, for the
services rendered by Executive to the Company during the Contract Term (the
"Base Salary"). Overtime is not remunerated and time off is not given in lieu;
compensation for any overtime worked is included in the Base Salary. The Base
Salary and all other remuneration paid to the Executive shall be subject to
normal deductions for personal taxation and legally required contributions. The
Board of Directors shall review the Base Salary on a yearly basis for purposes
of determining any increase thereof, whether due to cost of living adjustments
or merit, but any such determination shall be made in the sole discretion of the
Board of Directors without regard to past practice.
3.02 BONUS PLAN. In addition to the Base Salary, during each year of the
Contract Term the Executive will be eligible to receive a bonus (the "Annual
Bonus") in
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an amount up to 25% of Base Salary subject to meeting the criteria established
from time to time by the Board of Directors. The Board of Directors, in its
discretion, shall determine the amount of the Annual Bonus. The Board of
Directors and the Company's senior officers will work in good faith promptly
after the Effective Date to develop the criteria for earning the Annual Bonus in
1998 and will meet at least annually to develop the criteria for future years.
3.03 AUTOMOBILE. During the Contract Term the Company will ensure that
there will be made available to the Executive a motor vehicle of a type suitable
to his position for use by him in the performance of his duties hereunder and
for his private purposes and that the Executive's tax, insurance, maintenance
and running costs thereon and all fuel expenses reasonably incurred by the
Executive will be promptly reimbursed to the Executive.
3.04 TELEPHONE; FACSIMILE EQUIPMENT. During the Contract Term the Company
will provide the Executive a cellular telephone and a facsimile machine (or
equipment serving a comparable function), and will pay, or reimburse Executive
for, all telephone charges and associated costs thereof related to his duties
hereunder.
3.05 PENSION. The Company will establish a pension plan for its executive
officers in compliance with Swiss law (the "Pension Plan"). The total
contribution to the Pension Plan (Company plus Executive) in each year will be
15% of Executive's Base Salary for such year, of which each of the Company and
Executive will contribute 50% (i.e. 7.5% of Base Salary each).
3.06 HEALTH INSURANCE. The Executive is obligated to have a private health
insurance which provides full cover in Switzerland and while Executive is on
business trips outside Switzerland. The Company will contribute 50% of the
related private health insurance for each of the family members, not to exceed
SFr 200 per month per family member.
3.07 BUSINESS EXPENSES. During the Contract Term, the Company will pay the
Executive SFr 1500 per month as compensation for out of pocket expenses.
3.08 OPTIONS. On the Effective Date, the Company's parent, Carrier One,
LLC, will grant Executive options pursuant to and in accordance with the terms
of the Carrier One, LLC 1998 Unit Option Plan and the Option Agreement attached
hereto as EXHIBIT A.
3.09 HOLIDAYS. The Executive shall be entitled to a vacation of 25 working
days per annum. In the calendar year in which Executive reaches the age of 60
and thereafter he is entitled to a vacation of 30 working days.
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ARTICLE IV
CONFIDENTIALITY, NONCOMPETITION AND NONSOLICITATION
4.01 CONFIDENTIALITY. Executive acknowledges that in the course of
providing services to the Company and the Related Corporations, Executive will
become familiar with the trade secrets, Confidential Information and other
intellectual property concerning the Company and the Related Corporations.
Executive shall not at any time or in any manner, whether directly or
indirectly, use for his own benefit or the benefit of any other Person, nor
disclose, divulge, render or offer, any Confidential Information, except on
behalf of the Company or the Related Corporations in the course of the proper
performance of his duties hereunder. Executive acknowledges and agrees that any
and all such Confidential Information will be received and held by him in a
confidential capacity.
4.02 NONCOMPETITION AND NONSOLICITATION COVENANTS.
Executive acknowledges that (i) the services of the Executive are of
special, unique and extraordinary value to the Company and the Related
Corporations and (ii) the Company's and the Related Corporations' ability to
accomplish their purposes and to successfully compete in the marketplace depend
substantially on the skills and expertise of the Executive. Executive
acknowledges and agrees that the Company and the Related Corporations would be
irreparably damaged if Executive were to not devote substantially all of his
business time and efforts to the business and affairs of the Company and the
Related Corporations during the Contract Term or were to provide directly or
indirectly services to any Person competing directly or indirectly with the
Company or any of the Related Corporations or were to engage in a similar a
business other than as specifically permitted by this Section 4.02. Accordingly,
in further consideration of the compensation to be paid by the Company to the
Executive and to induce Providence to enter into the Purchase Agreement,
Executive agrees, that from and after the date hereof and during the applicable
Non-Compete Period, Executive will not, singly, jointly, or as an employee,
agent or partner of any partnership or as an officer, agent, employee, director,
stockholder (except of not more than one percent (1%) of the outstanding stock
of any company listed on a national securities exchange or actively traded in
the over the counter market) or investor in any other Person, or as a
consultant, advisor, or independent contractor to any such Person, or in any
other capacity, directly, indirectly or beneficially, anywhere in the world:
(i) own, manage, operate, join, control, or participate in the
ownership, management, operation, or control of, or work for (as an
employee, agent, consultant, advisor or independent contractor), or permit
the use of his name by, or provide financial or other assistance to, or be
connected in any manner with, any Person, which is in the international
long distance telecommunications business or other business which is in
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direct or indirect competition with any business conducted by the Company
or any of the Related Corporations on the date hereof or at any time
during the applicable Non-Compete Period;
(ii) induce or attempt to induce any individual who, on the date
hereof or at any time during the applicable Non-Compete Period, is an
employee of the Company or any of the Related Corporations, to terminate
his or her employment with such company or employ any such person in any
manner or capacity; or
(iii) induce or attempt to induce any Person, which is a supplier,
distributor, or customer of the Company or any of the Related Corporations
or which otherwise is a contracting party with the Company or any of the
Related Corporations, as of the date hereof or at any time during the
applicable Non-Compete Period, to terminate or modify any written or oral
agreement or understanding with the Company or any of the Related
Corporations.
Executive acknowledges and agrees that the limitations set forth in this Section
4.02 are reasonable with respect to scope, duration and area and are properly
required for the protection of the legitimate business interests of the Company
and the Related Corporations. The Company and Executive agree that the covenants
set forth in this Section 4.02 shall be enforced to the fullest extent permitted
by law. Accordingly, if in any arbitration, judicial or similar proceeding a
court, an arbitration or any similar judicial or administrative body shall
determine that such covenant is unenforceable because it covers too extensive a
geographical area or survives too long a period of time, or for any other
reason, then the parties intend that such covenant shall be deemed to cover only
such maximum geographical area and maximum period of time and shall otherwise be
deemed to be limited in such manner as will permit enforceability by such
arbitrator, court or similar body.
4.03 INFRINGEMENT OF EXECUTIVE'S OBLIGATION. If the Executive violates or
infringes his obligations under Section 4.01 and/or 4.02, the Executive shall
pay the Company a contractual penalty in the amount of the greater of 30% of
Base Salary or 30% of the total remuneration paid to Executive by his new
employer, for each case of infringement or breach. The payment of this penalty
does not in any case release the Executive from his obligations with regard to
this Agreement.
4.04 SPECIFIC PERFORMANCE. Executive agrees that his breach of the
provisions of Sections 4.01 or 4.02 above will cause irreparable damage to the
Company and the Related Corporations and that the recovery by the Company and
the Related Corporations of money damages will not constitute an adequate remedy
for such breach. The
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Executive agrees that the Company may request the elimination of a situation
contrary to this Agreement.
4.05 REPRESENTATIONS. Executive hereby represents and warrants to the
Company that (i) except as otherwise previously disclosed in writing to
Providence, the execution, delivery and performance of this Agreement does not
and will not conflict with, breach, violate or cause a default under any
contract, agreement, instrument, order, judgment or decree to which Executive is
a party or by which he is bound, (ii) except as otherwise previously disclosed
in writing to Providence, Executive is not a party to or bound by any employment
agreement, noncompetition agreement or confidentiality agreement with any other
Person which, in the good faith judgment of Executive, will materially interfere
with the performance of the Executive duties and obligations hereunder or
otherwise have a material adverse affect on the Company and (iii) this Agreement
is the valid and binding obligation of Executive, enforceable in accordance with
its terms.
ARTICLE V
MISCELLANEOUS
5.01 ASSIGNMENT. This Agreement is personal to Executive and shall not be
assigned, transferred, hypothecated, pledged or in any way encumbered by him;
PROVIDED, that the rights and obligations of Executive hereunder shall be
binding upon, and inure to the benefit of, Executive's estate. This Agreement
shall be binding upon, and inure to the benefit of, the Company's successors and
assigns.
5.02 INSURANCE. The Company or any of the Related Corporations, at its
discretion, may apply for and procure in its own name and its own benefit life
and/or disability insurance on Executive in any amount or amounts considered
available. Executive agrees to cooperate in any medical or other examination,
supply any information, and to execute and delivery any applications or other
instruments in writing as may be reasonably necessary to obtain and continue
such insurance. Executive represents that he has no reason to believe that his
life is not insurable at rates now prevailing for healthy men of his age.
5.03 AMENDMENT. This Agreement may not be amended, modified or
supplemented in any respect except by written agreement entered into by the
parties hereto.
5.04 GOVERNING LAW; ARBITRATION; CONSENT TO JURISDICTION. This Agreement
shall be governed by and construed in accordance with the laws of Switzerland.
Except with respect to the enforcement of the Company's injunctive and other
equitable remedies pursuant to Section 5.04 hereof, any dispute arising under
this Agreement shall be submitted to arbitration, the determination of which
shall be final and binding on the parties hereto and which arbitration shall be
held in accordance with Article 343,
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paragraph 1 of the Code and the rules and procedures of the International
Chamber of Commerce applicable to commercial transactions and conducted in
English. The cost of such arbitration, unless otherwise determined thereby,
shall be borne 50% by Executive and 50% by the Company. Executive, to the extent
that he may lawfully do so, hereby consents to the jurisdiction of the courts of
Switzerland as well as to the jurisdiction of all courts from which an appeal
may be taken from such courts, for the purpose of any suit, action or other
proceeding arising out of enforcement of any such arbitration award or any of
his obligations under Article V hereof, and hereby expressly waives any and all
objections which he may have as to venue in any such courts. It is acknowledged
and agreed that all of the other agreements referred to herein, including the
Option Plan, Option Agreement, Securityholders Agreement and Purchase Agreement
are governed by and shall be construed under the laws of Delaware (USA).
5.05 COUNTERPARTS; HEADINGS. 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. The headings of the
Articles and Sections of this Agreement are inserted for convenience only and
shall not constitute a part hereof.
5.06 ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties pertaining to the subject matter contained in it and supersedes and is
in lieu of any and all other employment arrangements between Executive and the
Company.
5.07 NOTICES. All notices given hereunder shall be in writing and shall be
delivered personally or sent by prepaid registered or certified mail, return
receipt requested, or by nationally recognized overnight courier service, and
addressed as follows:
If to the Company:
Carrier One AG
c/o Providence Equity Partners, Inc.
Xxxxx 000, Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
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With a copy to:
Prager Dreifuss
CH-8008 Zurich,
Zollikerstrasse 183
Attention: Xxx Xxxxxxx
and
Xxxxxxx & Xxxxxx
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to Executive:
Xxxxxxx Xxxxx
Xxxxxxxxxxxx 00
XX 0000 Xxxxxxxx
All notices shall be deemed to be given on the date received at the address of
the addressee, or, if delivered personally, on the date delivered.
5.08 SEVERABILITY. Any provision of this Agreement which is held by a
court of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
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IN WITNESS WHEREOF, Executive has executed this Agreement and the Company
has caused this Agreement to be executed as of the day and year first above
written.
CARRIER ONE AG
By: /s/ Stig Johansson
---------------------------------
Name: Stig Johansson
Title:
EXECUTIVE
/s/ Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
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