Exhibit 10.22
XXXXXX COMMUNICATIONS, LLC
XXXXX XXXXXX EMPLOYMENT AGREEMENT
This Agreement is made by and between Xxxxxx Communications, LLC (the "Company")
and Xxxxx Xxxxxx ("Employee") as of October 8th, 1999.
1) DUTIES AND SCOPE OF EMPLOYMENT
(a) Positions; Commencement Date; Duties
Employee's employment with the Company pursuant to this Agreement
shall commence on November 8th, 1999 (the "Commencement Date"). As
of the Commencement Date, the Company shall employ the Employee as
Vice President, Operations of the Company. The period of Employee's
employment hereunder is referred to herein as the "Employment Term."
During the Employment Term, Employee shall render such business and
professional services in the performance of his duties, consistent
with Employee's position within the Company, as shall reasonably be
assigned to him by the Chief Executive Officer of the Company (the
"CEO").
(b) Obligations
During the Employment Term, Employee shall devote his full business
efforts and time to the Company. Employee agrees, during the
Employment Term, not to actively engage in any other employment,
occupation or consulting activity for any direct or indirect
remuneration without the prior approval of the CEO; provided,
however, that Employee may serve in any capacity with any civic,
educational or charitable organization without the approval of the
CEO.
2) EMPLOYEE BENEFITS
(a) General
During the Employment Term, Employee shall be eligible to
participate in the appropriate employee benefit plans and insurance
maintained by the Company that are applicable to other senior
management to the full extent provided for under those plans.
Promptly following the date hereof, the Company shall provide
Employee with information regarding such plans and insurance. The
Company reserves the right to cancel or change its benefits plans
and programs it offers to its employees at any time.
(b) Relocation Expense Reimbursement
The Company will reimburse Employee for the following reasonable
relocation costs:
(i) Transaction costs associated with buying Employee's new
residence (closing costs, inspections, title insurance,
brokerage and related fees, etc.).
(ii) Transaction costs associated with selling Employee's old
residence (closing costs, inspections, title insurance,
brokerage and related fees, etc.).
(iii) Moving household furnishings, personal effects and two
automobiles (including packing and unpacking of
household furnishings and personal effects, and
California registration for two automobiles).
(iv) Two "house-hunting" trips to Santa Barbara, California,
including economy airfare, and related costs for one
individual per trip.
(v) Up to three months temporary storage of household
furnishings and personal effects if necessary.
Employee will be fully grossed-up by the Company for any imputed
income required to be recognized with respect to this reimbursement
so that the economic effect to Employee, after taking into account
any tax deductions available to Employee, is the same as if this
reimbursement was provided to Employee on a non-taxable basis.
(c) Temporary Living Expenses
The Company will pay for Employee's reasonable rent accommodation
costs until the earlier of (i) such time as the Employee permanently
relocates to Santa Barbara, California, or (ii) four (4) months from
the Commencement Date. Such costs will cover rent, and up to two (2)
round trip economy airfares per month for the Employee to return to
Houston.
Employee will be fully grossed-up by the Company for any imputed
income required to be recognized with respect to this reimbursement
so that the economic effect to Employee, after taking into account
any tax deductions available to Employee, is the same as if this
reimbursement was provided to Employee on a non-taxable basis.
(d) Relocation Loan
In connection with the transfer of Employee's principal place of
employment to Santa Barbara, California, the Company shall provide
Employee with a eight (8) year
interest-free mortgage loan in the amount of $300,000 for purposes
of Employee's acquisition of a new principal residence (the "Loan"),
payable at the close of escrow. The Loan shall be forgiven over
eight years with $25,000 per year for the first four years, $50,000
per years five, six, and seven, and $27,500 forgiven in the eighth
year. The Loan shall be subject to, and governed by, the terms and
conditions of a loan agreement and mortgage between the Employee and
the Company attached hereto as Exhibit A (the "Loan Agreement"). The
Company shall retain a mortgage security interest in the residence
during the term of the Loan. The Loan is intended to satisfy the
Requirements of Proposed Treasury Regulation Section 1.7872-5T(c)(1)
and the Employee and the Company agree to execute such documents as
are necessary to comply therewith. In the event of termination of
employment for any reason, the Loan will be due and repayable within
six (6) months of the effective date of termination. In the event
Employee is terminated due to (I) an act of dishonesty made by
Employee in connection with his responsibilities as an employee of
the Company, (ii) Employee's conviction of, or plea of nolo
contendere to, a felony, or (iii) Employee's gross misconduct, then
the outstanding balance of the Loan shall be due and repayable to
the Company within thirty (30) days of such termination. In the
event Employee is terminated due to Employee's breach or failure to
perform his employment duties as established by the CEO periodically
and failure to cure such breach within thirty (30) days after
receipt of written notice of breach from the Company, the
outstanding balance of the Loan shall be due and repayable six (6)
months from the termination date.
(e) Payment of actual COBRA benefit expense until Employee Standard
Benefits commence.
3) AT-WILL EMPLOYMENT
Employee and the Company understand and acknowledge that Employee's
employment with the Company constitutes "at-will" employment.
Subject to the Company providing severance benefits as specified
herein, Employee and the Company acknowledge that this employment
relationship may be terminated at any time, upon written notice to
the other party, with or without good cause or for any or no cause,
at the option either of the Company or Employee.
4) COMPENSATION
(a) Base Salary
While employed by the Company, the Company shall pay the Employee as
compensation for his services a base salary at the annualized rate
of $200,000 (the "Base Salary"). Such salary shall be paid
periodically in accordance with normal Company payroll practices and
subject to the usual required withholding.
(b) Bonuses
(i) Target Bonus
Employee shall be eligible to receive an annual target
bonus, of $45,000 (the "Target Bonus") paid in equal
quarterly installments, except in the first year which
will be paid in equal monthly installments. The Target
Bonus shall be based upon performance criteria specified
by the CEO. The Employee shall be guaranteed the $45,000
Target Bonus for the first annual period, with $22,500
of the first year bonus committed to pay down the
Relocation Loan amount, thereby guaranteeing a monthly
bonus amount payable to Employee equal to $1875.00
during the first year of employment. Notwithstanding the
foregoing, the Company's obligation to make any bonus
payments, whether during the first or any subsequent
period, should be dependent upon employee's employment
with the company throughout the end of each payment
period. For purposes of the Target Bonus, the annual
period shall commence on the Commencement Date (or
anniversary thereof) and continue for a one year period.
(c) Equity Compensation
(ii) Membership Unit Option
The Company will recommend to the Board of Managers (the
"Board") that the Employee receive a nonstatutory
membership unit option to purchase 150,000 shares (post
split) of the Company's then issued and outstanding
membership units at a price equal to the fair market
value as reasonably determined by the Board prior to the
Commencement Date (the "Unit Option"). The Unit Option
shall be for a term of ten years (or shorter upon
termination of employment or consulting relationship
with the Company) and, subject to accelerated vesting as
set forth elsewhere herein, shall be vested with respect
to twenty-five percent (25%) as of the first anniversary
of the Commencement Date and shall thereafter vest at
the rate of 1/36th of the remaining seventy-five percent
(75%) on the first day of each month following the first
anniversary of the Commencement Date. Such vesting shall
be conditioned upon Employee's continued employment with
the Company as of each vesting date. Except as specified
otherwise herein, the Unit Option shall be subject to
the terms, definitions and provisions of the Company's
1999 Unit
Plan (the "Unit Plan") and the standard form of unit
option agreement thereunder to be entered into by and
between Employee and the Company (the "Option
Agreement"), both of which documents are to be approved
by the Board.
(d) Severance
(i) Termination Without Cause
In the event that the Employee's employment with
the Company is involuntarily terminated by the
Company without "Cause" or is "Constructively
Terminated" (both as defined below), then (i)
Employee's Unit Option shall have its vesting
accelerated as to (ii) if such termination occurs
prior to the first anniversary of the Commencement
Date twenty-five percent (25%) of the units
subject to the Unit Option, or (iii) if such
termination occurs following the first anniversary
of the Commencement Date that number of units
subject to the Unit Option that would have become
vested had Employee remained employed by the
Company for an additional six (6) months; (iv)
Employee shall receive a lump-sum payment equal to
Six (6) Months of his Base Salary and Target
Bonus, less applicable withholding, promptly
receive coverage under the Company's health and
other welfare benefit plans for a period of six
(6) months, or, if and to the extent ineligible
under the terms of such plans, Employee shall
receive an amount equal to the Company's costs of
providing such benefits.
For the purposes of this Agreement, "Cause" is
defined as: (i) an act of dishonesty made by
Employee in connection with his responsibilities
as an employee of the Company, (ii) Employee's
conviction of, or plea of nolo contendere to, a
felony, (iii) Employee's gross misconduct, or (iv)
Employee's breach or failure to perform his
employment duties as established by the CEO
periodically and failure to cure such breach
within thirty (30) days after receipt of written
notice of breach from the Company. For this
purpose, "Constructive Termination" is defined as
the resignation of Employee within sixty (60) days
following (i) the assignment to Employee of duties
incommensurate with his status as Vice President,
Operations, or any material reduction of the
Employee's duties, authority, responsibilities or
title, relative to the Employee's duties,
authority, responsibilities or title as in effect
immediately prior to such reduction, except if
agreed to in writing by the Employee; (ii) a
material reduction by the Company in the Base
Salary, as in effect immediately prior to such
reduction; or (iii) the relocation of the Employee
to a facility or a location more than thirty-five
(35) miles from the Employee's then present
location, without the Employee's written consent.
5) CHANGE OF CONTROL VESTING ACCELERATION
In the event of a Change of Control, a number of membership units
equal to 25% of Employee's entire Unit Option as of the Commencement
Date, together with any additional option grants Employee may
receive from the Company while employed hereunder, shall become
vested and any remaining unvested units subject to the Unit Option,
or any additional option grants, shall be subject to vesting as
otherwise provided herein or in the applicable option agreements.
6) TOTAL DISABILITY OF EMPLOYEE
Upon Employee's becoming permanently and totally disabled (as
defined in accordance with Internal Revenue Code Section 22(e)(3) or
its successor provision) during the term of this Agreement,
employment hereunder shall automatically terminate, all payments of
compensation by the Company to Employee hereunder shall immediately
terminate (except as to amounts already earned) and all vesting of
the Employee's unit options shall immediately cease.
7) DEATH OF EMPLOYEE
If Employee dies while employed by the Company pursuant to this
Agreement, all payments of compensation by the Company to Employee
hereunder shall immediately terminate (except as to amounts already
earned, which shall be paid to Employee's estate) and all vesting of
the Employee's unit options shall immediately cease. All payment for
relocation loan will be payable by the Employee's estate to the
Company within six (6) months of death.
8) ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of (a)
the heirs, executors and legal representatives of Employee upon
Employee's death and (b) any successor of the Company. Any such
successor of the Company shall be deemed substituted for the Company
under the terms of this Agreement for all purposes. As used herein,
"successor" shall include any person, firm, corporation or other
business entity which at any time, whether by purchase, merger or
otherwise, directly or indirectly acquires all or substantially all
of the assets or business of the Company. None of the rights of
Employee to receive any form of compensation payable pursuant to
this Agreement shall be assignable or transferable except through a
testamentary disposition or by the laws of descent and distribution
upon the death of Employee following termination without cause. Any
attempted assignment, transfer, conveyance or other disposition
(other than as aforesaid) of any interest in the rights of Employee
to receive any form of compensation hereunder shall be null and
void.
9) NOTICES
All notices, requests, demands and other communications called for
hereunder shall be in writing and shall be deemed given if (i)
delivered personally, (ii) one (1) day after being sent by Federal
Express or a similar commercial overnight service, or (iii) three
(3) days after being mailed by registered or certified mail, return
receipt requested, prepaid and addressed to the parties or their
successors in interest at the following addresses, or at such other
addresses as the parties may designate by written notice in the
manner aforesaid:
If to the Company: Xxxxxx Communications, LLC
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
Attn: Chief Executive Officer
If to Employee: Xxxxx Xxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
10) SEVERABILITY
In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without
said provision.
11) PROPRIETY INFORMATION AGREEMENT
Employee agrees to enter into the Company's standard Proprietary
Information Agreement (the "Proprietary Information Agreement") upon
commencing employment hereunder.
12) ENTIRE AGREEMENT
This Agreement, the Unit Plan, the Option Agreement, and the
Proprietary Information Agreement represent the entire agreement and
understanding between the Company and Employee concerning Employee's
employment relationship with the Company, and supersede and replace
any and all prior agreements and understandings concerning
Employee's employment relationship with the Company.
13) ARBITRATION AND EQUITABLE RELIEF
(a) Except as provided in Section 13(c) below, Employee agrees that
any dispute or controversy arising out of, relating to, or in
connection with this Agreement, or the interpretation, validity,
construction, performance, breach, or termination thereof shall be
settled by arbitration to be held in Santa Xxxxxxx County,
California, in accordance
with the National Rules for the Resolution of Employment Disputes
then in effect of the American Arbitration Association (the
"Rules"). The arbitrator may grant injunctions or other relief in
such dispute or controversy. The decision of the arbitrator shall be
final, conclusive and binding on the parties to the arbitration.
Judgment may be entered on the arbitrator's decision in any court
having jurisdiction.
(b) The arbitrator shall apply California law to the merits of any
dispute or claim, without reference to rules of conflict of law. The
arbitration proceedings shall be governed by federal arbitration law
and by the Rules, without reference to state arbitration law.
Employee hereby expressly consents to the personal jurisdiction of
the state and federal courts located in California for any action or
proceeding arising from or relating to this Agreement and/or
relating to any arbitration in which the parties are participants.
(c) Employee understands that nothing in Section 13 modifies
Employee's at-will status. Either the Company or Employee can
terminate the employment relationship at any time, with or without
cause.
(d) EMPLOYEE HAS READ AND UNDERSTANDS SECTION 13, WHICH DISCUSSES
ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EMPLOYEE AGREES TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING
TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION,
VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH, OR TERMINATION THEREOF
TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES
A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE
RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE
FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT;
BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE
COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND
IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL
DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION;
NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR
PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR
MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF
THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991,
THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE
AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR
STANDARDS ACT,
THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE
SECTION 201, et seq;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT
DISCRIMINATION.
14) LEGAL FEE REIMBURSEMENT
The Company agrees to pay Employee's reasonable legal fees
associated with entering into this Agreement upon receiving invoices
for such services.
15) NO ORAL MODIFICATION, CANCELLATION OR DISCHARGE
This Agreement may only be amended, canceled or discharged in
writing signed by Employee and the Company.
16) WITHHOLDING
The Company shall be entitled to withhold, or cause to be withheld,
from payment any amount of withholding taxes required by law with
respect to payments made to Employee in connection with his
employment hereunder.
17) GOVERNING LAW
This Agreement shall be governed by the laws of the State of
California.
18) EFFECTIVE DATE
This Agreement is effective November 8th, 1999.
19) ACKNOWLEDGMENT
Employee acknowledges that he has had the opportunity to discuss
this matter with and obtain advice from his private attorney, has
had sufficient time to, and has carefully read and fully understands
all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below:
XXXXXX COMMUNICATIONS, LLC
/s/ Xxx Xxxxxxxxx
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Xxx Xxxxxxxxx
Chief Employee Officer
EMPLOYEE
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
