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EXHIBIT 10.20
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into this ____ day of August 1998, by and between OmniOffices, Inc., a
Delaware corporation (the "Company"), and Xxxx Xxxxx (the "Executive").
WITNESSETH
WHEREAS, the Company is engaged, directly or indirectly, in
the executive office suites business, which involves providing office space on a
short-term, individual office basis, together with telephone-answering,
data-processing and other office support services, at an agreed upon price;
WHEREAS, the Company believes that it would benefit from the
Executive's skill, experience and background, and wishes to employ the Executive
as its President and Chief Executive Officer; and
WHEREAS, the parties desire by this Agreement to set forth the
terms and conditions of the employment relationship between the Company and the
Executive.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein set forth, and for other good and valuable
consideration, the Company and the Executive hereby agree as follows:
1. Employment and Duties. The Company hereby employs the
Executive as its President and Chief Executive Officer, and the Executive
accepts such employment, on the terms and subject to the conditions provided in
this Agreement. The Executive shall devote his best efforts and full business
time, attention, energy and skill to performing the duties of President and
Chief Executive Officer of the Company. As part of these duties, Executive shall
serve on the Board of Directors of the Company (the "Board") and as the
Company's representative as a director of HQ Holdings Limited, a subsidiary in
which the Company owns all of the voting stock, and such other subsidiaries as
the Board and Executive mutually agree. Provided that such activities do not
violate any term or condition of this Agreement, or materially interfere with
performance of his duties hereunder, nothing herein shall prohibit the Executive
from (a) participating in other business activities approved in advance by the
Board in accordance with any terms and conditions of such approval, such
approval not to be unreasonably withheld or delayed, (b) engaging in charitable,
civic, fraternal or trade group activities, and (c) investing his personal
assets in other entities or business ventures, subject to any policies of the
Company applicable to all executive personnel of the Company.
2. Employment Term.
(a) Initial Term. Subject to the terms and conditions of
this Agreement, the Executive's term of employment under this Agreement (the
"Employment Term") shall commence on September 8, 1998 (the "Effective Date")
and continue until August 31, 2001 (the "Initial Term") subject to the extension
provisions of Section 2(b), unless terminated earlier in accordance with the
provisions of Section 4.
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(b) Extensions. Upon expiration of the Initial Term, the
Employment Term shall automatically be extended for a new two-year period
expiring on the second anniversary of the Initial Term (the "Extension Term"),
and thereafter shall automatically renew upon expiration of each such Extension
Term for a new two-year period expiring on the second anniversary of such
Extension Term, except that the Employment Term shall not be extended
automatically if (i) prior to 180 calendar days before the Employment Term is
scheduled to be extended automatically, the Company, with the approval of a
majority of the members of Board (not including the Executive) delivers to the
Executive, or the Executive delivers to the Company, written notice that the
automatic extension provision of this Section 2(b) shall be inoperative, (ii) a
notice of termination has been delivered and not withdrawn under Section 4 or
(iii) the Executive dies or turns 62 years of age during the current Initial
Term or Extension Term, as the case may be.
3. Compensation. As compensation for performing the services
required by this Agreement, and during the term of this Agreement, the Executive
shall be compensated as follows:
(a) Base Compensation. The Company shall pay to the
Executive as base compensation an annual salary ("Base Compensation"), of Four
Hundred Thousand Dollars ($400,000), payable in accordance with the general
policies and procedures for payment of salaries to senior executive personnel of
the Company as implemented by the Board, in substantially equal installments,
subject to withholding for applicable federal, state, local and foreign taxes.
Increases in Base Compensation, if any, shall be determined by the Board based
on periodic reviews of the Executive's performance conducted on at least an
annual basis at the beginning of each fiscal year, beginning in 2000. In making
determinations as to whether increases in Base Compensation are appropriate, the
Board shall obtain and consider, inter alia, reliable information on the
compensation of chief executive officers of comparable businesses.
(b) Cash Incentive Compensation. The Executive shall be
eligible to receive an annual cash bonus as incentive compensation in addition
to his Base Compensation ("Cash Incentive Compensation"). Cash Incentive
Compensation for each fiscal year will be payable on or before the end of the
first quarter of the following fiscal year. Receipt of Cash Incentive
Compensation will be conditioned on the attainment of certain quantitative and
qualitative performance objectives established for the Executive and all
executive personnel of the Company by the Board (or the Compensation Committee
thereof) in its sole and absolute discretion, except that for fiscal year 1998
the Executive shall be deemed to have satisfied the applicable objectives and
shall be entitled to Cash Incentive Compensation at an annual rate of $200,000,
prorated based on the number of calendar days the Executive is employed by the
Company during fiscal year 1998. The parties expect that Cash Incentive
Compensation equal to the percentage of the Executive's Base Compensation listed
below will be awarded for future fiscal years if the Executive satisfies the
level of performance set forth opposite the percentage below:
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% of Base Level of
Compensation Performance Satisfied
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25% Threshold Performance
50% Target Performance(1)
75% Distinguished Performance
The parties further expect that a draft of the performance
objectives for the Executive's fiscal year 1999 Cash Incentive Compensation will
be available in November 1998 and approved at the February 1999 meeting of the
Board. The parties expect that the Executive's Cash Incentive Compensation
objectives for fiscal year 1999 will address the following strategic objectives:
establishing a global brand name; innovation in developing new products and
services; positioning the Company for an initial public offering; attaining
profitability at a specified percentage of compounded growth, exploiting the
Company's synergy with CarrAmerica by expanding service relationships; and being
a leader in providing quality services.
(c) Equity-Based Incentive Compensation. On the date
hereof, the Executive is being granted 120,000(2) units of restricted non-voting
common stock of the Company and options to purchase up to 300,000(2) shares of
non-voting common stock of the Company, all as set forth in the Stock Option
Agreement and Restricted Stock Units Agreement to be entered into by the Company
and the Executive as of the Effective Date in the forms attached as Exhibit A
and Exhibit B hereto, respectively.
(d) Employee Benefits: Fringe Benefits. During the
Employment Term, the Executive and his eligible dependents (where applicable)
shall have the right to participate in each retirement, pension, insurance,
health and other benefit plan or program that has been or is hereafter adopted
by the Company (or in which the Company participates) according to the terms of
such plan or program with all the benefits, rights and privileges as are
generally enjoyed by senior executive personnel of the Company. The Executive
also shall be entitled to all fringe benefits, if any, that generally are
enjoyed by senior executive personnel of the Company.
(e) Vacation; Sick Leave; Holidays; Leaves of Absence. The
Executive shall be entitled to 20 days of paid vacation leave each year on dates
mutually agreed upon by the Company and the Executive. The Executive also shall
be entitled to 10 days of paid sick leave each year and to the same paid
holidays provided to the other employees of the Company. In addition, the
Executive may be granted leaves of absence with or without pay for such valid
and legitimate reasons as the Board in its sole and absolute discretion may
determine.
(f) Expenses. The Executive shall be entitled to receive
reimbursement for all reasonable and necessary expenses incurred by him in
connection with the performance of business-related duties under this Agreement.
The Company shall consider the following as among the reasonable and necessary
expenses incurred in connection
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(1) It is contemplated that "Target Performance" will include objectives that
the parties believe are 70-80% likely to be met.
(2) To be adjusted to treat all forms of CarrAmerica investment in OmniOffices
(i.e., debt, debt guarantees and equity) as equity.
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with the performance of business-related duties under this Agreement: (i) the
Executive's reasonable expenses incurred in connection with his membership in
the Young Presidents Organization; and (ii) costs to "upgrade" to first class
air travel from a full coach fare incurred by the Executive in connection with
his performance of business-related duties under this Agreement.
4. Termination and Termination Benefits.
(a) Termination by the Board.
(i) Without Cause. The Board, with the approval of a
majority of the members of the Board (not including the
Executive) and after affording the Executive an opportunity
to meet with at least a quorum of the Board, may terminate
the Executive's employment under this Agreement without cause
at any time by written notice to the Executive. The
Executive's employment hereunder shall terminate immediately
upon his receipt of such notice. In the event of such a
termination, the Executive shall be paid (A) at such times as
the Company otherwise would have paid the Executive his Base
Compensation had the Executive remained employed by the
Company, his Base Compensation for a period of two years from
the date the Executive receives written notice of the
termination, and (B) at the time that annual cash bonus
incentive compensation payments are made to senior executive
personnel of the Company with respect to periods during a
fiscal year in which the Executive was employed by the
Company, Cash Incentive Compensation equal to the average of
the Cash Incentive Compensation received by the Executive for
the two fiscal years immediately preceding the fiscal year in
question (which may be zero for either of such fiscal years),
prorated based on the number of calendar days the Executive
was employed by the Company during the fiscal year in
question. For purposes of this Section 4(a)(i), termination
of the Executive's employment in connection with the
dissolution or final liquidation of the Company shall be
considered a termination by the Board without cause.
(ii) For Cause. The Board may terminate the Executive's
employment under this Agreement for cause by written notice
to the Executive. The Executive's employment hereunder shall
terminate immediately upon his receipt of such notice. In the
event of such a termination, the Executive shall be paid his
Base Compensation up to the effective date of such
termination, but the Executive shall not be entitled to any
other compensation or payments (other than pursuant to
Section 3(d) up to the effective date of termination). For
purposes of this Section 4(a)(ii), "cause" shall mean (w)
dishonesty of a material nature which relates to the
performance of the Executive's duties hereunder, (x) criminal
conduct (other than minor infractions and traffic violations)
that relates to the performance of the Executive's duties
hereunder, (y) the failure of the Executive to perform any of
his duties under this Agreement (other than a failure due to
disability) after written notice specifying the failure and a
15-day opportunity to cure (it being understood that if the
Executive's failure to perform is not of a type requiring a
single action to fully cure, then the Executive may commence
the cure promptly after such written notice and
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thereafter diligently prosecute such cure to completion), and
(z) any breach by the Executive of Section 5 or Section 6 of
this Agreement.
(iii) Disability. If due to illness, physical or mental
disability, or other incapacity, the Executive shall fail, for
a total of any six (6) months or more within any period of
twelve (12) consecutive months, to perform the duties required
by this Agreement, the Board may terminate the Executive's
employment under this Agreement upon thirty (30) days' written
notice to the Executive. In such event, the Executive shall be
(A) paid his Base Compensation up to the effective date of
such termination, (B) paid, as soon as practicable thereafter
in a lump sum, Cash Incentive Compensation at an annual rate
equal to one-half of the Executive's Base Compensation for the
fiscal year in which the termination occurred, prorated based
on the number of calendar days the Executive was employed by
the Company in the applicable year, and (C) provided with
employee benefits pursuant to Section 3(d) hereof up to the
effective date of termination.
(b) Termination by the Executive.
(i) Voluntarily. The Executive may terminate his
employment hereunder voluntarily upon one hundred and twenty
(120) days' prior notice to the Board. Such a termination
shall be effective one hundred and twenty (120) calendar days
after the delivery of such notice unless the Board agrees to
another effective date. In the event of such a termination,
the Company shall pay to the Executive any unpaid Base
Compensation in respect of the period through the effective
date of the termination and any unpaid Cash Incentive
Compensation in respect of years preceding the year in which
such termination becomes effective, but shall have no further
obligation or liability to pay Base Compensation or Cash
Incentive Compensation to the Executive under this Agreement.
The Executive's obligations and liabilities to the Company
under this Agreement shall cease as of the effective date of
such a termination (except his obligations under Section 5 and
Section 6, which shall survive).
(ii) For Good Reason. The Executive may terminate his
employment under this Agreement for good reason upon thirty
(30) days' written notice to the Board (during which period
the Executive shall continue to perform the duties of
President and Chief Executive Officer of the Company under
this Agreement or as specified by the Board), provided that
(i) such written notice shall specify the nature of the
Company's action or actions as the result of which the
Executive has the right to terminate this Agreement pursuant
to this Section 4(b)(ii), and (ii) during which period the
Company shall have the opportunity to cure. In such event, the
Executive shall be paid (A) at such times as the Company
otherwise would have paid the Executive his Base Compensation
had the Executive remained employed
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by the Company, his Base Compensation for ninety (90) calendar
days after the effective date of termination under this
Section 4(b)(ii), and (B) at the time that annual cash bonus
incentive compensation payments are made to senior executive
personnel of the Company with respect to periods encompassed
within the then current Employment Term, Cash Incentive
Compensation at an annual rate equal to one-half of the
Executive's Base Compensation for the fiscal year in which the
termination occurred, prorated based on the number of calendar
days the Executive was employed by the Company in the
applicable year. For purposes of this Section 4(b)(ii), "good
reason" shall mean, without the Executive's express consent,
(v) the Company's failure to make any of the payments or
provide any of the benefits to the Executive due under this
Agreement, (w) the regular assignment of duties to the
Executive materially inconsistent with the position, duties,
responsibilities and status of President and Chief Executive
Officer of the Company, (x) removal of the Executive from the
Board or his failure to be re-elected to the Board, (y) the
Company's requiring the Executive to be based anywhere other
than within a 00-xxxx xxxxxx xx Xxxxxx, Xxxxx, except for
required travel on the Company's business, or (z) a change in
the Executive's title or office.
(c) Death Benefit. Notwithstanding any other provision of
this Agreement, this Agreement shall terminate on the date of
the Executive's death. In such event, the Executive's estate
shall be paid (A) at such times as the Company otherwise would
have paid the Executive his Base Compensation had the
Executive remained employed by the Company, his Base
Compensation for a period of one year from the date of death,
and (B) at such times as annual cash incentive compensation
payments are made to senior executive personnel of the Company
with respect to the period for which the Executive's estate is
paid his Base Compensation, Cash Incentive Compensation for
such one-year period at an annual rate equal to one-half of
the Base Compensation paid, and (C) any applicable employee
benefits to which the Executive became entitled pursuant to
Section 3(d) before the date of his death. In addition, upon
the death of the Executive, the Company shall continue to
provide for 90 days,
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at the Company's expense, the same level of health insurance and other benefits
for the Executive's eligible dependants as the Company provided for them at the
time of the Executive's death.
5. Confidential Information.
(a) Acknowledgment. The Executive acknowledges that his
employment by the Company will bring him into close contact with confidential
proprietary information of the Company, including information regarding costs,
profits, markets, sales, products, key personnel, pricing policies, operational
methods, other business methods, plans for future developments, and other
information not readily available to the public, the disclosure of which to
third parties would in each case have a material adverse effect on the Company's
business operations ("Confidential Information").
(b) Agreement Regarding Confidentiality. The Executive
will keep secret all Confidential Information and will not intentionally
disclose Confidential Information to anyone outside of the Company other than in
the course of performance of his duties under this Agreement either during or
after the termination of his employment hereunder except that (i) the Executive
shall have no such obligation to the extent Confidential Information is or
becomes publicly known other than as a result of the Executive's breach of his
obligations hereunder and (ii) the Executive may disclose such matters to the
extent required by applicable laws, or governmental regulations or judicial or
regulatory processes.
(c) Return of Records. The Executive will deliver
promptly to the Company on termination of his employment by the Company, or at
any other time the Board may so request, all memoranda, notes, records, reports
and other documents (and all copies thereof) relating to the Company's business
that he obtained while employed by, or otherwise serving or acting on behalf of,
the Company and that he may then possess or have under his control. In the event
the Executive fails to comply with his obligations under this Section 5(c), the
Company shall be entitled to injunctive relief enforcing such obligations to the
extent reasonably necessary to protect the Company's legitimate interests.
6. Noncompetition.
(a) Restrictions on Competitive Activity. During the
Executive's active employment under this Agreement and for a period of
twenty-four (24) months following the delivery of a notice of termination
pursuant to Section 4(a)(i) or Section 4(b) hereof, the Executive will not,
without the prior written approval of a majority of the members of the Board
(not including the Executive), (i) engage directly or indirectly in, or become
employed by, serve as an agent or consultant to or become an officer, director,
partner, principal or stockholder of any partnership, corporation or other
entity which is engaged in a business which is directly competitive in any city
with any business in which the Company is engaged at the time such relationship
is entered into, (ii) directly or indirectly seek, solicit or accept for
employment or retention as an independent contractor by any such entity any
person who was employed or retained as an independent contractor by the Company
during the Executive's active employment under this Agreement, or (iii) directly
or indirectly seek, solicit or accept the business of any person, entity,
association or group of any kind that was a customer, client or actively
solicited prospective customer or client of the Company during the Executive's
active employment under this Agreement. As long
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as the Executive does not engage in any other activity prohibited by this
Section 6(a), the Executive's ownership of less than 2% of the issued and
outstanding stock of any corporation whose stock is traded on an established
securities market shall not constitute an activity prohibited under this Section
6(a). In the event the Executive competes with the Company in violation of this
Section 6(a), the Company shall be entitled to injunctive relief enforcing the
provisions of this Section, regardless of whether the Company is also entitled
to damages.
(b) Compensation Adjustments. If the Executive competes with
the Employer in violation of Section 6(a) following the delivery of a notice of
termination pursuant Section 4(a)(i) or Section 4(b)(ii), (i) first, to the
extent that Base Compensation and Cash Incentive Compensation remains to be paid
to the Executive, the total Base Compensation and Cash Incentive Compensation
payable to the Executive pursuant to such sections shall be reduced by the total
amount of compensation received by the Executive by reason of such competitive
activity with respect to the twenty-four (24) month period following the
delivery of the applicable notice of termination, and (ii) second, to the extent
that the reductions in clause (i) were less than the amount of compensation
received by the Executive by reason of such competitive activity with respect
to the twenty-four (24) month period following the delivery of the applicable
notice of termination and to the extent compensation has been paid to the
Executive pursuant to Section 4(a)(i) of Section 4(b)(ii) without reduction
pursuant to this Section 6(b), the Executive shall repay to the Company an
amount equal to the lessor of (y) the total amount of compensation received by
the Executive by reason of such competitive activity with respect to such
twenty-four (24) month period less the amount of reductions pursuant to clause
(i), and (z) the total amount of compensation received by the Executive
hereunder with respect to such twenty-four (24) month period.
7. Indemnification; D&O Insurance.
(a) Indemnification. The Executive shall be entitled in
connection with his employment under this Agreement to the benefit of the
indemnification provisions contained on the date hereof in the Articles of
Incorporation and By-Laws of the Company, as the same may hereafter be amended
(not including any amendments or additions that limit or narrow, but including
any that add to or broaden, the protection afforded to the Executive), to the
fullest extent permitted by applicable law. The Company shall in addition cause
the Executive to be indemnified in accordance with Section 145 of the Delaware
General Corporation Law to the fullest extent permitted by such section, to the
extent required to make the Executive whole in connection with any loss, cost or
expense indemnificable thereunder.
(b) D&O Insurance. The Company shall use its best efforts to
continue to maintain (with reputable and financially sound insurers) on
reasonable business terms one or more directors' and officers' liability
insurance policies that cover the
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Executive at a level that is commercially reasonable (in light of the Company's
business and the risks of litigation or claims).
8. Miscellaneous.
(a) Integration; Amendment. This Agreement constitutes the entire
agreement among the parties hereto with respect to the matters set forth herein
and supersedes and renders of no force and effect all prior understandings and
agreements among the parties with respect to the matters set forth herein. No
amendments or additions to this Agreement shall be binding unless in writing
and signed by the Executive and the Company.
(b) Assignment. The Company may assign this Agreement to any
successor by operation of law or purchaser of all or substantially all of the
assets of the Company. The Executive may not assign this Agreement or any right
or interest therein, whether by operation of law or otherwise, without the
prior written consent of the Company.
(c) Severability. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable law or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited, or invalid, but the remainder of this Agreement shall not be
invalid and shall be given full force and effect so far as possible.
(d) Waivers. The failure or delay of any party at any time to
require performance by any other party of any provision of this Agreement, even
if known, shall not affect the right of such party to require performance of
that provision or to exercise any right, power, or remedy hereunder, and any
waiver by any party of any breach of any provision of this Agreement shall not
be construed as a waiver of any continuing or succeeding breach of such
provision, a waiver of the provision itself, or a waiver of any right, power,
or remedy under this Agreement. No notice to or demand on any party in any case
shall, of itself, entitle such party to any other or further notice or demand
in similar or other circumstances.
(e) Power and Authority. The Company represents and warrants to the
Executive that it has the requisite corporate power to enter into this
Agreement and perform the terms hereof; and that the execution, delivery and
performance of this Agreement by it has been duly authorized by all appropriate
corporate action.
(f) Burden and Benefit. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, personal and legal representatives, successors and, subject to
Section 6(b) above, assigns. Any provision of this Agreement which by its terms
requires performance beyond the term of this Agreement shall survive the term
of this Agreement in accordance with the terms of such provision.
(g) Time is of the Essence. Time is of the essence for all purposes
of this Agreement.
(h) Arbitration. Any dispute or controversy arising out of or
relating to this Agreement shall be settled finally and exclusively by
arbitration in accordance with the rules of the American Arbitration
Association then in effect. Such arbitration shall be conducted in the State of
Texas by a sole arbitrator appointed by the
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American Arbitration Association in accordance with its rules and any finding by
such arbitrator shall be final and binding upon the parties. Judgment upon any
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof, and the parties consent to the jurisdiction of the courts of the State
of Georgia for this purpose. Nothing contained in this Section 6(h) shall be
construed to preclude the Company from obtaining injunctive or other equitable
relief to secure specific performance or to otherwise prevent a breach or
contemplated breach of this Agreement.
(i) Governing Law; Headings. This Agreement and its construction,
performance, and enforceability shall be governed by, and construed in
accordance with, the laws of the State of Texas. Headings and titles herein are
included solely for convenience and shall not affect the interpretation of this
Agreement.
(j) Notices. All notices called for under this Agreement shall be in
writing and shall be deemed given upon receipt if delivered personally or by
facsimile transmission and followed promptly by mail, or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof):
If to the Executive:
Xxxx Xxxxx
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Facsimile:
If to the Company:
OmniOffices, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxx 000 Xxxx
Xxxxxxx, Xxxxxxx 00000
Att'n: Chairman
Facsimile:
Any notice delivered to the party hereto to whom it is addressed shall
be deemed to have been given and received on the day it was received; provided,
however, that if such day is not a business day then the notice shall be deemed
to have been given and received on the business day next following such day. Any
notice sent by facsimile transmission shall be deemed to have been given and
received on the business day next following the day of transmission.
(k) Counterparts. This Agreement may be executed in one or more
counterparts, each of which counterparts shall be deemed to be an original, and
all such counterparts shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement, or
caused this Agreement to be duly executed on their behalf, as of the date first
above written.
OMNIOFFICES, INC.
By:
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Name:
-------------------------
Title:
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XXXX XXXXX
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CarrAmerica Realty Corporation
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MEMORANDUM
[COMPANY LOGO]
To: Xxxx X. Xxxxx
From: Xxxxx X. Xxxxxxxxx
Date: January 4, 1999
Re: Stock Option Agreement and Restricted Stock Units Agreement
Attached please find for your files copies of our original Stock Option
Agreement and Restricted Stock Units Agreement between you and OmniOffices, Inc.
We believe that originals of these agreements were previously forwarded to you
for your execution and files.
Please do not hesitate to contact me directly at 202/729-7572 with any
questions. It has been a pleasure assisting you in this matter.
Attachments
cc: Xxxxxx X. Xxxxxxx (w/attach.)
Xxxxx X. Xxxxxx (w/attach.)
Xxxxx X. Xxxxxx (w/o attach.)
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XXXXX & XXXXXXX L.L.P.
MEMORANDUM
September 25, 1998
TO: Xxx Xxxx
FROM: Xxxxx Xxxxxx
Xxxxx Xxxxxxx
RE: FINAL KUSIN STOCK OPTION AGREEMENT AND RESTRICTED STOCK UNITS AGREEMENT
Enclosed for your final review are two execution copies of the proposed
Stock Option Agreement and Restricted Stock Units Agreement for Xxxx Xxxxx,
including exhibits. Also enclosed for your review are the changed pages to
those agreements, marked to show changes from the drafts sent out last Friday
(copies of which have already been faxed to Xxxxx and Xxxxx).
Also enclosed are two copies of a replacement first page of Xx. Xxxxx'x
employment agreement. We noticed that reference was made to the wrong HQ London
entity in Paragraph 1 of the agreement, and have prepared a replacement page
for each of Omni and Xx. Xxxxx.
We believe that the documents are in final form and ready for execution.
(We are missing Exhibit C to the Restricted Stock Units Agreement, but that
needs to be provided by Xxxx.) If you agree, you should execute both copies of
the agreements and send them on to Xxxx for his signature, along with the
replacement page for the employment agreement.
Please call either of us with any questions or final comments.
D.B. (202/637-5868)
G.L. (202/637-6528)
Enclosures
cc: Xxxxx Xxxxxx
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HQ GLOBAL WORKPLACES, INC.
Xx. Xxxx Xxxxx
Chief Executive Officer
HQ Global Workplaces, Inc.
Re: Agreement to Amend Employment Agreement
Dear Xxxx:
You currently are a party to an Employment Agreement, dated September 4,
1998 (the "Employment Agreement"), with HQ Global Workplaces, Inc., formerly
known as OmniOffices, Inc. (the "Company"). By its terms, the Employment
Agreement may be amended at any time, provided that the amendment is in writing
and is signed by you and the Company. The Company currently is negotiating an
agreement pursuant to which VANTAS Incorporated will be merged with and into the
Company, and the Company will be the surviving entity (the "Merger"). In
connection with the negotiation of such agreement, and subject in its entirety
to the closing of such Merger, the Company hereby agrees to amend your
Employment Agreement in the following manner. Any terms used below with initial
capital letters and not defined herein shall have the meanings given thereto in
the Employment Agreement.
EFFECTIVE DATE: The following amendments will become effective upon the date of
the closing of Merger (the "Closing Date").
TITLE: During the Employment Term following the Closing Date, you will remain
the Chief Executive Officer of the Company.
PRINCIPAL FINANCIAL TERMS - CASH COMPENSATION
o During the Employment Term following the Closing Date, your Base
Compensation will equal $600,000, pro-rated in year 2000 from the Closing
Date. This Base Compensation will be reviewed annually and consideration
will be made in that review to comparable salary data provided by either
Xxxxxx Xxxxx, The Hay Group or another reputable executive compensation
firm agreed upon by you and the Board.
o During the Employment Term following the Closing Date, your target Cash
Incentive Compensation will equal $300,000 (50% of your initial Base
Compensation), pro-rated in year 2000 from the Closing Date. Your Cash
Incentive Compensation can potentially range from 25% of Base Compensation
to 75%, based on objectives and criteria that will be established by you
and the Board. The expectation is that the 50% bonus would apply 70-80% of
the time, and that the bonus percentage would only be at the lower or the
higher end of the range as a result of exceptionally poor or good
performance, respectively.
PRINCIPAL FINANCIAL TERMS - STOCK AND OPTION GRANTS
o As soon as practicable following the Closing Date, you will receive options
to purchase common stock of the Company with a value equal to 6X your Base
Compensation, or $3,600,000, which will become exercisable over a four-year
period (37.5% after 18 months, then 12.5% every 6 months up to 100% in
total, provided in each case that you are still employed by the Company on
the applicable vesting date). The exercise price per share will equal the
per share valuation used for purposes of the Merger.
o As soon as practicable following the Closing Date, you will receive a grant
of restricted common stock in the Company with a value equal to 2.5X your
Base Compensation, or $1,500,000, which will become vested over a four-year
period (37.5% after 18 months, then 12.5% every 6 months up to 100%
15
in total, provided in each case that you are still employed by the Company
on the applicable vesting date).
o You will make a personal investment of $900,000, or 1.5X your Base
Compensation, in restricted common stock of Reckson Services Industries,
Inc., dba FrontLine Capital Group, Inc. ("Frontline"). Your ability to sell
the Frontline stock, while still an employee, will be limited in terms of
the aggregate shares purchased as follows:
- None until 18 months after the Closing Date,
- Up to 37.5% on or after the 18-month point, then
- Up to an additional 12.5% on or after each subsequent six month
point, until the aggregate 100% total is reached
In the event that you cease to be an employee of the Company, your ability
to sell the Frontline stock will revert to 100%. In all cases usual terms
and conditions for restricted stock purchases or sales (e.g. insider rules)
will apply.
o For each share of Frontline stock purchased by you, up to the $900,000
limit described above, you will be granted an option to purchase one share
of restricted FrontLine stock. The stock purchase price and option exercise
price will equal the market price per share of such stock at the close of
business on the Closing Date. The options will become exercisable over a
four year period (37.5% after 18 months from the effective date, then 12.5%
every 6 months up to 100% in total, provided in each case that you are
still employed by the Company on the applicable vesting date).
FRINGE BENEFITS, VACATION, INDEMNIFICATION, EXPENSES, TERMINATION AND SEVERANCE
PROVISIONS
o Company paid business class ticket for spouse once per year
o All other provisions of the Employment Agreement will remain in effect
during the Employment Term following the Closing Date. In addition, the
foregoing provisions and obligations will not become effective unless and
until the Closing occurs.
Please indicate your acknowledgement of and acceptance of the foregoing by
signing and dating this letter in the space provided below.
HQ Global Workplaces, Inc.
By:
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ACKNOWLEDGED AND AGREED
this 14 day of January, 2000:
/s/ XXXX XXXXX
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Xxxx Xxxxx
ACKNOWLEDGED AND AGREED
this 14 day of January, 2000:
Reckson Services Industries, Inc.
By: [ILLEGIBLE]
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CEO
