Exhibit 10.23
EMPLOYMENT AND NON-COMPETE AGREEMENT
------------------------------------
THIS EMPLOYMENT AND NON-COMPETE AGREEMENT is made as of the 14 day of
----
January, 1998 (the "Effective Date"), by and among GLOBALCENTER, INC., a
California corporation ("Company") and Xxxxxxx X. Xxxxxx
------------------------------
("Executive").
WHEREAS, Company wishes to retain the services of Executive as provided in
this Agreement for a period of time during which it anticipates significant
change in the market in which the Company competes, and in the direction and
evolution of Company,
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements herein contained, Company and Executive have agreed as
follows:
1. Terms of Employment.
-------------------
1.1 Employment. Company agrees to continue to employ Executive, and
----------
Executive agrees to continue to serve Company, on the terms and conditions set
forth herein.
1.2 Position and Duties. Executive shall have such powers and duties
-------------------
normally associated with the position with Company of its President and shall
have such other powers and duties commensurate with such position as may from
time to time be prescribed by the board of directors of Company, or by such
executives of Company or any parent of Company as may have authority to do so.
Executive shall devote his full time, attention and energy to and use his best
efforts in the business and affairs of Company and its affiliates. Executive's
duties are, without limitation, to be responsible for the profitable and
successful growth and operation of the Company. Executive shall not work,
including on either a part-time or independent contracting, or in a paid or
unpaid advisory capacity, for any other business or enterprise during the Term
without Company's prior written consent. Provided such activity is not
inconsistent with his responsibilities as an employee of the Company, Executive
may serve on boards or committees of civic, educational, or charitable
organizations, or in other capacities with such organizations, and may serve on
boards or committees of other organizations that do not compete with the
Company. Service on other boards or committees may be permitted only upon
consent of the chief executive officer of the Company.
1.3 Term. The term of this Agreement ("Term") shall be three (3) years
----
after the Effective Date, unless earlier terminated or extended. The provisions
of Section 5 shall have a separate duration of three (3) years, as described
therein. Except as set forth in this Agreement, Executive's employment is "at
will".
2. Compensation.
------------
2.1 Base Salary. Executive's Base Salary shall be $300,000 until
-----------
February 1, 1999, unless otherwise increased by agreement of the parties.
Executive's Base Salary may be modified thereafter by Company in accordance with
the compensation program that is in effect for Company, and as such program may
be modified from time to time. Should Company become affiliated with or be
acquired by another entity, Executive shall participate in the compensation
program applicable to such other entity, but the Base Salary shall not be
reduced during the Term. Executive's Base Salary shall accrue and be payable in
accordance with Company's normal payroll policies.
2.2 Performance Bonus. Executive shall be eligible to receive an annual
-----------------
performance bonus of up to $138,700 until a change of control of Company, and
thereafter, such bonus eligibility shall change to be in a range of 25% (at
threshold level) to 87.5% (at premier level) of salary, with a bonus opportunity
at standard level of 50% of the amount stated in the first line of Section 2.1
for calendar year 1998, which is within the range of bonus amounts that are
payable to other employees at the same SVP level as Executive, for meeting the
applicable corporate and individual performance criteria established in writing
by Company for such period.
Any performance bonus to be earned by Executive in 1999 and thereafter
shall be established in the normal course of business in anticipation of
achievement of such goals and objectives as are set by the Company and modified
from time to time thereafter.
2.3 Expenses. During the term of Executive's employment hereunder,
--------
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred in performing services hereunder, provided that Executive
properly accounts for such expenses in accordance with Company policy.
2.4 Compensation and Benefit Programs of Company. While employed
--------------------------------------------
hereunder, Executive shall be eligible to participate in the benefit programs
and plans maintained by Company for the benefit of such group or groups of
management employees of which Executive is a member (or any successor programs
implemented by Company from time to time.) Any options or loans are addressed
separately.
2.5 Place of Performance. Executive is to perform his duties at such
--------------------
place or places as Company directs. For the three (3) year period set out in
Section 1.3, absent other mutually agreeable arrangement, or temporary
assignments consistent with industry or Company practices, Executive shall
perform his duties at the current Company location in Sunnyvale.
3. Termination of Employment.
-------------------------
3.1 Death. Executive's employment hereunder shall terminate upon his
-----
death.
3.2 Disability. Executive's employment hereunder shall terminate in the
----------
event he suffers a Disability as hereinafter defined.
3.3 By Company. Company may terminate Executive's employment hereunder
----------
at any time with or without Cause but subject to the provisions of this
Agreement, including without limitation the provisions of Section 5, which shall
survive any termination of Executive's employment, except where Executive and
Company specifically agree to waive such provisions, and as such may be
permitted by this Agreement.
2
3.4 By Executive. Executive may terminate his employment hereunder at
------------
any time for any reason, but subject to such provisions of this Agreement,
including without limitation the provisions of Section 5, which shall survive
any termination of Executive's employment, except where Executive and Company
specifically agree to waive such provisions, and as such may be permitted by
this Agreement.
3.5 Notice of Termination, Payments. Any termination of Executive's
-------------------------------
employment hereunder (other than by death) shall be communicated by 10 working
days' advance written Notice of Termination by the terminating party to the
other party to this Agreement; provided that no advance Notice of Termination
for Cause by Company is required. Unless otherwise provided in Section 4, any
amounts owed by Company to Executive pursuant to Section 4 shall be paid on the
Date of Termination. Payments shall be made available to Executive only so long
as he is in compliance with the provisions of Section 5, as such may be
applicable at the time.
4. Payments in the Event of Termination of Employment.
--------------------------------------------------
4.1 Payments in the Event of Termination by Company for Cause or Voluntary
----------------------------------------------------------------------
Termination by Executive Other Than for Good Reason. If Executive's employment
---------------------------------------------------
hereunder is terminated by Company for Cause or Executive voluntarily terminates
his employment other than for Good Reason, Company shall pay Executive his
accrued and unpaid Base Salary and Incentive Compensation (excepting any bonus
amounts whatsoever) through the Date of Termination on the Date of Termination
or as soon thereafter as is practicable. Executive also shall receive any
payments or other rights of continuation or benefits Executive may otherwise be
entitled to receive pursuant to any employee benefit or compensation plan or
life insurance policy maintained by Company at the time or times provided
therein, as such plans or policies may be modified from time to time.
4.2 Payments in the Event of Any Other Termination of Employment. If
------------------------------------------------------------
Executive's employment hereunder is terminated by Company during the Term other
than for Cause, or if Executive dies or should terminate his employment for Good
Reason, or if employment is terminated as a result of Disability, Company shall
pay Executive his accrued and unpaid Base Salary and Incentive Compensation
(excepting any bonus amounts whatsoever) through the Date of Termination on the
Date of Termination or as soon thereafter as is practicable. Executive also
shall obtain any payments or other rights of continuation or benefits Executive
may be entitled to receive pursuant to any employee benefit or compensation plan
or life insurance policy maintained by the Company, as such plans or policies
may be modified from time to time. In the event Executive's employment is
terminated as a result of his death, such payments shall go to Executive's
estate.
On the condition that Executive agrees to remain available in the event
Company requires information or cooperation with respect to any disputes or
litigation, and only so long as Executive complies with the provisions of
Section 5 that are applicable at the time, Executive or his estate shall be
entitled in each case under this Section to receive payment of the full amount
that would have been paid to him as Base Salary (but no Incentive Compensation
or bonus, except for the one-time payment established below in satisfaction of
any previously established commission component of Base Salary) for the
remainder of the Term, either: (a) as such payments become due, or (b) on or
promptly after
3
the Date of Termination, at Company's election. The Company shall seek to
provide reasonable advance notice and cooperation with respect to scheduling in
relation to disputes or litigation, and shall reimburse Executive for the
reasonable expenses incurred by Executive in relation to such disputes or
litigation. If there is any commission component of Base Salary, Executive shall
be paid the present value of five months of commissions at Executive's average
monthly commission level for the prior two quarters, taking into account
attrition at a representative rate, within one month after the end of the first
full quarter following the Termination Date, or such earlier time as Company
elects, in full satisfaction of all commission obligations. Company agrees to
continue for Executive those employee health and welfare benefits (life
insurance disability, medical, dental, vision and hospitalization) as are in
effect on the date of termination, for one (1) year after the date that
termination of employment occurs, except in the event of Executive's death, in
which case no continuation of benefits shall occur except what is provided in
any applicable plans. If Executive dies, any condition related to disputes or
litigation shall be deemed waived. No other payments shall be payable to
Executive or his estate.
Any payment due to Executive under this section for Disability shall be
reduced by the amount of such payments as are otherwise payable to him under a
plan or plans of the Company by virtue of such Disability. Executive shall not
be required to mitigate the amount of any payment provided for in this Section
4.2 by seeking other employment or otherwise, and no such payment shall be
offset or reduced as a result of Executive obtaining new employment.
5. Confidentiality, Non-Competition and Non-Solicitation.
-----------------------------------------------------
5.1 Confidentiality of Developments and Intellectual Property. Executive
---------------------------------------------------------
acknowledges that all developments, including but not limited to trade secrets
(including strategies, business plans and customer lists), discoveries,
improvements, ideas and writings which relate to or are useful in the business
of the Company or any affiliated entity (the "Developments") which Executive
shall develop, acquire or acquire knowledge of during the Term are the sole and
exclusive property of the Company. Executive shall not, without the prior
written consent of Company, divulge, disclose or make accessible to any other
person, firm, partnership or corporation or other entity any Confidential
Information pertaining to the business of Company except in the performance of
his duties under this Agreement or when required to do so by a court of
competent jurisdiction, by any governmental agency having supervisory authority
over the business of Company, or by any administrative body or legislative
exercising its jurisdiction.
For purposes of this Section 5.1, "Confidential Information" shall mean
non-public information of Company or its affiliates, or the Company's (or an
affiliate's) financial data, strategic business plans, product development (or
other proprietary product data including the Developments), customer lists,
marketing plans and other proprietary information (and other material covered in
the Company's separate agreement concerning inventions, confidential information
and intellectual property where Executive has executed such agreement), except
for specific items which have become publicly available information other than
through a breach by Executive of any fiduciary duty or any confidentiality
agreement. Executive specifically represents and acknowledges that the
Confidential Information and the manner in which such Confidential Information
is used by Company
4
provides Company with a substantial part of its competitive advantage and if
disclosed to others, would materially harm Company's ability to compete.
Upon termination of this Agreement, Executive shall promptly return to
Company all Confidential Information and any other tangible product or document
which has been produced by, received by or otherwise submitted to Executive
during the Term and shall not retain any copies thereof. This confidentiality
covenant has no geographical restriction but shall expire without further action
of either party five (5) years from the last day on which Executive works for
Company.
5.2 Non-Competition
---------------
(a) Covenant. Executive and Company acknowledge that Executive has a
--------
special expertise in the Internet and information transport areas, that the
market area in which Executive may compete with Company is without geographic
boundaries, given the growth of, and advances in telecommunications and the
specific business of Company, and that in Executive's employment with the
Company, he will have continuing access to information about the Company's
target markets, strategies, plans, product or service offerings, methods of
operation, financial and operating expectations and results, customer base,
sales, marketing and pricing strategies, most valued employees, and customer and
supplier relationships, as well as those of Company's partners and affiliates.
Executive specifically represents and acknowledges that he is a partial owner of
shares in the Company and that his activities on behalf of Company have
significantly contributed to the development of the Company's goodwill.
In consideration of the benefits provided under this Agreement, which are
acknowledged to be independent consideration, Executive covenants and agrees
that, for the duration of the Term (whether or not it may be reduced), and for a
period of three (3) years from the date of this Agreement, whether or not
Executive's employment with Company or any affiliate of Company ceases earlier
than the Term stated in Section 1.3, he will not, directly or indirectly,
without the Company's prior consent (or in the event that Company should be
subject to a change of control, to the prior consent of the controlling
shareowner of Company) own, manage, operate, join, control or participate in the
ownership or control of, or be associated as an officer, director, executive,
partner or principal, agent, representative, consultant or otherwise with, or
use or permit his name to be used in connection with, any enterprise that
competes (including marketing, promotion, distribution or sale of any product,
service, or functional capability of any person or entity other than the Company
or an affiliate of the Company whose products the Company provides or refers to
customers) with any Internet business of the Company or any telecommunications
business of the Company that involves the offering or provision of local
exchange service or any form of long distance (interexchange, interLATA)
service, or with such offering or provision of local exchange or long distance
service by an affiliate of the Company with whom Company bundles or jointly
sells its products and services, at any point in the United States of America
within 100 miles of where the Company has a business, sales or customer service
office, or, whether such competition is directly or via telecommunications, in a
state which is a source to the Company of more than five percent (5%) of its
revenues or five percent (5%) of its Internet customers, or where it offers,
sells or provides customer support for any services that are sold by or jointly
marketed through Company.
5
This Section shall not be construed to prohibit the ownership of not more
than 2.5% in any corporation which competes with the Company, or such additional
ownership of securities of a corporation as may be permitted after March 15,
1998 by the chief executive officer of any parent of Company.
(b) Savings Clause. Executive acknowledges that because there is a wide
--------------
market in which he can use his skills for enterprises that do not directly or
indirectly compete with the business of the Company, he will not be unreasonably
limited in his ability to work. Executive and the Company agree that this
covenant not to compete is a reasonable covenant under the circumstances and is
supported by the consideration stated above, and further agree that if any of
the provisions of this Section are ever determined by a court to exceed the
time, geographic scope or other limitations permitted by applicable law in any
jurisdiction, then such excessive provisions shall be deemed reduced, in such
jurisdiction only, to the maximum time, geographic scope or other limitation
permitted in such jurisdiction, and Executive agrees to the enforcement of the
remainder of the covenant as so amended.
5.3. Non-Solicitation. Executive covenants and agree that for a period
----------------
of three (3) years from the date of this Agreement, whether or not Executive's
employment with Company or any affiliate of Company ceases earlier than the Term
stated in Section 1.3, he will not, directly or indirectly, or through
employees, agents, recruiters, independent contractors or others, without the
Company's prior consent (or in the event that Company should be subject to a
change of control, to the prior consent of the controlling shareowner of
Company) and without regard to the activity or activities in which Executive is
engaging, whether it is within or without the information services industry,
Executive will not: (a) offer, promise, provide or guarantee employment, work
for compensation, business opportunity or other means of financial gain, or
solicit, invite an inquiry on employment or other compensatory relationship,
respond to such inquiry with a promise or grant of an employment or other
compensatory relationship, or otherwise seek to influence any person to leave
the Company or any partner or affiliate, or to undertake activities that would
be adverse to the interests of Company or any affiliate, where such person is
employed by the Company or any affiliate, or, where the law permits, is in an
independent contractor relationship in which a majority of their time is spent
on Company/affiliate-related activities, or is a supplier of services to the
Company or any affiliate who would thereafter become unavailable to provide such
services to such entity, or who has been in such an employment or independent
contractor relationship within the twelve (12) months prior to the first contact
by Executive; or (b) solicit from, convert, attempt to convert, divert business
from, or attempt to divert business from any of the Company's customers or those
customers of any affiliate, whether such activity is intended to benefit
Executive or any other person or entity, and whether or not such activity is
successful. This section shall not be deemed to prohibit newspaper
advertisements or similar general invitations to seek employment, provided there
are no additional activities directed toward specific employees covered under
subpart (a) of this subsection.
5.4. Equitable and Other Relief.
--------------------------
(a) Executive acknowledges that the restrictions contained in the Sections
governing Developments and Intellectual Property, Confidential Information, Non-
Competition and Non-Solicitation are, in view of the nature of the business of
the Company, and Executive's position with it, reasonable and necessary to
protect the legitimate interests
6
of the Company and its affiliates, and that any violation of the provisions of
those Sections will result in irreparable injury to the Company and its
affiliates for which there would be no adequate remedy at law.
Executive also acknowledges that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, and to an equitable accounting of all earnings, profits and
other benefits arising from such violation. These rights shall be cumulative
and in addition to any other rights or remedies to which the Company may be
entitled. Executive agrees to submit to the jurisdiction of a state court
located in the jurisdiction of the Company's headquarters, or that of such
affiliated entity that may seek relief under this section, at the applicable
time in any action, suit or proceeding brought by the Company or the affiliated
entity, or both, to enforce its rights under the Sections identified above, and
that any separate claim Executive has shall not constitute a defense to the
enforcement of the covenants and agreements in those Sections.
(b) Executive shall indemnify the Company and its affiliates (the
Indemnified Parties") and hold the Indemnified Parties harmless from any and all
judgments or awards rendered by a court in favor of Company or an affiliate of
Company as a result of a Breach, and reasonable attorneys' and experts' fees
incurred by Company or an affiliate of Company in enforcing its rights under
this Section 5.
(c) The indemnification provided in this Section 5 shall not be the
exclusive remedy available to Company or its affiliates for any breach of this
Agreement by Executive.
6. Successors and Assigns. This Agreement and all rights of Executive
----------------------
hereunder shall inure to the benefit of and be enforceable by, Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devises and legatees. The rights and obligations of the Company
under this Agreement shall inure to the benefit of and shall be binding upon its
successors and assigns, and any entity that may take a controlling interest in
the Company.
7. Withholding. All payments required to be made by the Company hereunder
-----------
shall be subject to the withholding of such amounts as are required to be
withheld pursuant to any applicable law or regulation.
8. Certain Defined Terms. As used herein, the following terms have the
---------------------
following meanings:
"Agreement" shall mean this Employment and Non-Compete Agreement, as the
---------
same may be amended, supplemented or otherwise modified from time to time.
"Base Salary" shall mean the annual salary of the Executive in effect from
-----------
time to time under Section 2.1, excluding any incentive compensation or one-time
payments, except where a governing commission arrangement applies to an active
sales executive and is described with specificity in Section 2.1, and prior to
any withholdings or deductions, which salary shall accrue ratably and be payable
in accord with Company's policies in effect from time to time.
7
"Cause" shall mean, with respect to termination of Executive's employment
-----
hereunder: any of (i) the repeated failure to substantially perform the duties
assigned to him after he has been advised in writing of the fact and nature of
such non-performance, and given an opportunity to cure it; (ii) activity
undertaken willfully, that fails to reflect reasonable business judgment and
that is materially injurious to the Company; (iii) activity undertaken willfully
and that is in violation of the Company's written policies related to ethics, as
such ethics policies may be modified in writing from time to time; (iv) an act
or acts of personal dishonesty by Executive which results in a not insubstantial
personal enrichment of Executive at the expense of Company or any affiliate of
Company; (v) an act or acts or personal dishonesty by Executive which causes
substantial injury to the business, operations or reputation of Company or any
affiliate; (vi) a written determination by the Company that Executive has
engaged in activity that could be the subject of a charge against Executive that
involves a felony, high misdemeanor or a crime involving moral turpitude and
which detrimentally affects the Company; or (vii) violation of the provisions of
this Agreement set out in Section 5.
"Date of Termination" shall mean, with respect to Executive, the date of
-------------------
termination of Executive's employment hereunder after the notice period provided
by Section 3.5, to the extent applicable.
"Disability" shall mean a physical or a mental condition which prevents
----------
Executive from performance of his duties hereunder, if Executive or Company
establishes by medical evidence that such condition will be permanent and
continuous during the remainder of Executive's life or, at the discretion of
Company, if such condition is documented by a physician acceptable to Company to
be sufficiently severe that it will certainly extend beyond four (4) years from
the date of this Agreement.
"Good Reason" shall mean, with respect to Executive, any one or more of the
-----------
following: (i) the material reduction in Executive's authority and
responsibility except: (a) with Executive's consent, or (b) with a showing that
Executive has failed to meet the responsibilities of his position under
circumstances that would constitute Cause for termination by Company; (ii) a
reduction in Executive's Base Salary or executive benefits during the period set
out in Section 1.3 except where such reduction is unrelated to Company-specific
performance objectives and occurs for all executives at the same level within
the Company or its parent; or (iii) a failure by Company to comply with any
material provision of this Agreement which failure has not been cured within ten
(10) days after receipt of written notice from Executive specifying the alleged
noncompliance, or such minimum reasonable additional time in the event cure is
impossible within ten (10) days. In order for Executive's termination of his
employment to be considered for Good Reason, Executive shall provide a Notice of
Termination for Good Reason within one (1) month after the event giving rise to
such Good Reason, and in the event a cure period expires without resolving the
basis for the Notice, Executive shall provide notice of such fact and the basis
for his final action. Without prejudice to either party, Executive shall
comply with any request of Company not to appear for work or to contact
employees during all or any part of the time after Executive's Notice of
Termination for Good Reason is delivered to Company.
"Notice of Termination" shall mean a written statement specifying the Date
---------------------
of Termination, which notice shall (i) indicate the specific termination
provision (if any) in this Agreement applicable to the termination; and (ii) set
forth in reasonable detail the facts claimed to provide a basis for termination
of Executive's employment.
8
9. Miscellaneous. No provision of this Agreement may be modified, waived
-------------
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by Executive and by the highest ranking executive of Company or
an executive to be designated by Company (or in the event that Company should be
subject to a change of control, to the prior consent of the controlling
shareowner of Company.) No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. There shall
be no right of set-off, recoupment or counterclaim, in respect of any claim,
debt or obligation, against any payments to Executive, his dependents,
beneficiaries or estate provided for in this Agreement.
10. Validity. The invalidity or unenforceability of any provision or
--------
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect. The validity, interpretation, construction and performance of this
Agreement shall be governed in accord with the law of the state in which the
headquarters of the Company is located, or if there is a change of control of
the Company, of the state where the headquarters of the parent of Company is
located, with such change of applicable law to be effective on such change of
control, and without regard to principles of conflicts of laws.
11. No Limitation. Under no circumstances shall payment to Executive of
-------------
any amount required to be paid under any provision hereof, or provision to
Executive of any other benefit or compensation required to be provided under any
provision hereof, limit or reduce any other obligation of Company, to make any
payment or provide any benefit to Executive pursuant to any other provision
hereof, except that Executive shall not be entitled to receive any benefits
under any severance plan or program maintained by either Company in addition to
the payments to be made to Executive pursuant to Section 2 and 4 of this
Agreement.
12. Notices. All notices and other communications given or made pursuant
-------
to this Agreement shall be in writing and personally delivered or sent by a
nationally recognized overnight courier, including the applicable United States
Postal Service overnight service, or by telecopy, to the parties at the
following addresses:
If to Executive: Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
If to Company: GlobalCenter, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000 Attn: President or CFO
with a required copy to counsel for Company's parent in New York or elsewhere,
or in lieu thereof, to counsel for Company
or to such other person or address as any party shall specify by notice in
writing to the other. All such notices, requests, demands, waivers and
communications shall be deemed to have been received by the relevant party on
the date of personal delivery to such party's address, addressed to the
attention of the appropriate person specified above, on the business day
following the date on which such notice was sent by overnight courier to such
party's address,
9
addressed to the attention of the appropriate person specified above or, if such
notice is sent by telecopy or hand delivered, on the date that delivery is
initiated, if a receipt of such telecopy or hand delivery is obtained or
acknowledged by the recipient.
13. Entire Agreement. This Agreement supersedes all related provisions
----------------
set out in any prior employment agreement between Executive and Company. This
instrument contains the entire agreement of the parties and supersedes all other
employment agreements between the parties. This Agreement may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or discharge is
sought, in accord with Section 9. If Executive's employment continues beyond
the expiration of the Term, the provisions of Section 5 shall continue in full
force and effect, but the other provisions of this Agreement do not renew
automatically.
IN WITNESS WHEREOF, Executive and Company have caused this Agreement to be
signed as of the Effective Date first stated above.
EXECUTIVE COMPANY
GLOBALCENTER, INC.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
--------------------- ---------------------
Printed: Xxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
--------------------- ---------------------
Its: President
10
PROMISSORY NOTE
$150,000 February 27, 1998
FOR VALUE RECEIVED, the receipt and sufficiency of which is
acknowledged Xxxxxxx X. Xxxxxx, residing at 0000 Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxx 00000 ("Maker") promises to pay to the order of Frontier Corporation,
at its office and principal place of business at 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 ("Payee"), the principal amount of One Hundred Fifty
Thousand Dollars ($150,000).
On the condition that Maker remains a full time employee of Payee or
one of its subsidiaries or affiliates, then, on the third anniversary of this
Note, i.e., February 27, 2001, the principal amount of this Note plus any
----
interest shall be deemed paid in full. Until such date, no payments shall be
required to be made to Payee by Maker, so long as Maker remains in the employ of
Payee or one of its wholly-owned subsidiaries or affiliates.
If Maker ceases to be employed by Payee or any of its wholly-owned
subsidiaries or affiliates, for any reason except for termination of employment
without cause, the principal amount of this Note then outstanding, plus interest
thereon calculated at a rate equal to the prime rate then charged by The Chase
Manhattan Bank, N.A., plus one percent, shall become immediately due and payable
without notice, presentation or demand of any kind, all of which are hereby
waived by Maker. Maker agrees that Payee shall be entitled to set off such sums
as may be required to pay the principal amount of this Note, plus any interest,
against any amounts payable to or on behalf of Maker by Payee or any wholly-
owned subsidiary or affiliate of Payee, to the extent not prohibited by
applicable law or regulation.
If Maker ceases to be employed by Payee or any of its wholly-owned
subsidiaries or affiliates as a result of an employment termination without
cause by Payee or its wholly-owned subsidiary or affiliate (in either case, with
the approval of Payee) prior to the date that the principal amount of this Note
would otherwise be deemed paid, then the principal amount of this Note plus all
accrued interest will be deemed forgiven in full as of the date that the
employment termination becomes effective, and Payee shall have no further claim
against Maker.
No failure or delay on the part of Payee in the exercise of any power
or right in this Note shall operate as a waiver thereof, and no exercise or
waiver of any single power or right, or the partial exercise thereof, shall
affect Payee's rights with respect to any and all other rights and powers.
Maker waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note.
The provisions of this Note shall inure to the benefit of and extend
to Payee or any holder hereof or any assigns of Payee.
11
-2-
Any notice given pursuant to this Note shall be in writing and shall
be deemed to have been given when: (a) delivered by hand; or (b) deposited for
certified or registered mail delivery in the United States mail with postage
prepaid; or (c) sent through a recognized overnight service including but not
limited to the United States Postal Service; and in the event of (b) or (c),
addressed to the party for whom it is intended at the address for such party set
forth above, or in the case of Maker, to such other residence address as the
employer of Maker may have on its records as Maker's last known residence
address.
This Note shall be governed by and construed under the laws of the
State of New York, without reference to and regardless of the application of any
of its principles of conflicts of law.
In the event that this Note is placed in the hands of an attorney for
the collection hereof, Maker agrees to pay all reasonable costs of collection,
including reasonable attorneys' fees.
IN WITNESS WHEREOF, Maker has executed and issued this Note on the day and year
first set forth above.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
STATE OF ___________________ )
COUNTY OF _________________ ) ss.:
On the _______ day of ________________________, 1998, before me
personally came Xxxxxxx X. Xxxxxx, to me known and known to me to be the same
person described in and who executed the foregoing instrument, and he duly
acknowledged to me that he executed the same.
----------------------------------
Notary Public
12
