Exhibit 10.11
KEY EMPLOYEE AGREEMENT
This KEY EMPLOYEE AGREEMENT (hereinafter referred to as the ("Agreement")
is made and entered into as of this 1st day of January, 1997, by and between
Best Internet Communications, Inc., a California corporation (hereinafter
referred to as the "Company") and Xxx Xxxxxx (hereinafter referred to as
"Executive").
WHEREAS, Company is in the business of providing communications services to
an international computer network and related products and services to the
public;
WHEREAS, Executive possesses unique technical and operational skills which
are valuable to the business and financial prospects of Company;
WHEREAS, in light of the foregoing, Company desires to employ Executive as
Chairman, President and Chief Executive Officer and Executive desires to accept
such employment;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
Company and Executive agree as follows:
1. Duties. Company hereby employs Executive to serve in the dual capacity of
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Chairman and of President and CEO, reporting to the Board of Directors with such
duties as are specified in Company's Bylaws and as may be defined from time to
time by the Board.
2. Term of Employment. Company hereby agrees to employ Executive and Executive
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agrees to accept employment upon the terms and conditions set forth herein,
commencing on January 1, 1997, and shall continue unless and until either or
both capacities are terminated by Company or by the Executive pursuant to
Paragraph 12 below.
3. Salary. Executive shall be entitled to receive from Company a starting base
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salary of $10,000 per month, which if annualized is $120,000, $7,500 per month
to the President and CEO capacity and $2,500 per month to the Chairman capacity.
Salary is calculated from the date of Executive's commencement of employment,
pursuant to Paragraph 2 above. The base salary shall be paid Executive in
installments every other week and shall be reviewed and may be increased or
decreased by the Board annually or at such earlier time as one of the capacities
may be terminated.
4. Stock Options. In addition to Executive's salary described in
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Paragraph 3, above, Executive shall receive Incentive Stock Options at a
striking price of 75 cents per share as to 780,000 shares and $1.25 as to 20,000
shares, all 800,000 of which shall vest over a twenty-four(24) month period,
commencing on January 1, 1997, 600,000 to the President and CEO capacity and
200,000 to the Chairman capacity. The aforementioned stock options shall
otherwise be subject to the terms and conditions of the Stock Option Agreement
and Company's Stock Option Plan. Such plans state, in part, that an employee
must be employed by Company for at least six (6) months before vesting of the
first six months worth of options; thereafter, options shall vest pro rata each
month. In the event of the closing of an Initial Public Offering or the transfer
of ownership of 51% or more of the Company, for other than passive funding
purposes, all of such options as have been granted to the Executive as of the
date of the transaction shall be fully vested.
5. Extent of Services. So long as he serves both as Chairman and as President
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and CEO, Executive shall devote his full time, attention and energies to the
business of Company and shall not during such time be engaged (whether or not
during normal business hours) in any other business or professional activity,
whether or not such activity is pursued for gain, profit or other pecuniary
advantage, but this shall not be construed as preventing the Executive from (a)
investing personal assets in businesses which do not compete with Company in
such form or manner as will not require any substantial services on the part of
the Executive and in which the Executive's participation is principally that of
an investor; (b) purchasing securities in any corporation whose securities are
regularly traded, provided that such purchase shall not result in the
Executive's collectively owning beneficially at any time five percent (5%) or
more of the equity securities of a corporation engaged in a business competitive
to that of Company; and (c) participating in conferences, preparing or
publishing papers or books or teaching, so long as the Board approves of such
activities prior to the Executive engaging in them. It is agreed that the
President and CEO capacity is deemed to be three quarters (3/4) of full time and
the Chairman capacity one quarter (1/4).
6. Vacations and Leave. Executive shall be entitled to vacation and other
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leave in accordance with normal Company policy applicable to management
employees. Vacations shall be taken at such time or times as Executive and the
Board shall mutually agree.
7. Expense Reimbursement. Upon presentation of supporting documentation and
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consistent with Company policy, Company will reimburse Executive for any
reasonable and necessary business expenses incurred by Executive in connection
with the business of Company. The parties acknowledge that Executive may incur
certain
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business-related expenses which Company will not reimburse but which nonetheless
further the business interests of Company and Executive's professional interest.
8. Other Benefits. In addition to the benefits specifically described herein,
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during the term of this Agreement, Executive and his spouse, children and/or
other dependents shall be entitled to receive, on an equivalent basis, all
other benefits of employment generally made available to other members of
Company's management and their families, including, without limitation, benefits
as a result of any present or future medical insurance, disability insurance,
life insurance, retirement or pension plans. It is understood that any 401(k)
plan implemented by Company will be made available to Executive at the time and
upon the equivalent terms as made available to Company's other management
employees.
9. Taxes. Company may withhold from any amounts payable under this Agreement
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such federal, state, or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
10. Termination of Employment. This Agreement and Executive's employment in
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either the capacity of Chairman or of President and CEO or both may be
terminated by either party, for any reason or no reason, immediately upon ten
(10) days written notice given to the other party. Accordingly, Executive and
Company acknowledge and agree that this Agreement and any employments hereunder
are to be considered AT-WILL EMPLOYMENT. Termination pursuant to this Section
shall not prejudice any other remedy to which the terminating party may be
entitled at law, in equity, or under this Agreement. This is the only Agreement
concerning termination between Company and Executive, and the parties
acknowledge that this Agreement supersedes and replaces any other written or
oral agreement, representation or understanding between the parties concerning
termination and that this Agreement can only be modified in a writing signed by
the Board's delegate.
11. Successors to the Company. Except as otherwise provided herein, this
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Agreement shall be binding upon and inure to the benefit of Company and any
successors of Company, or any corporation which acquires directly or indirectly
all of the assets of Company, whether by merger, consolidation, sale or
otherwise, and shall not be otherwise assignable by Company. This Agreement is
not assignable by Executive.
12. Notice. Any notice to be given under the terms of this Agreement shall be
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given as follows: Notice to Company shall be addressed to its CFO at Company's
principal offices; Notices to
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Executive shall be addressed to Executive's home as last shown on the records of
Company or given by personal delivery. Notice of a change of address under this
section shall have been duly given when personally delivered or three (3) days
after being enclosed in a properly sealed envelope addressed as aforesaid, and
deposited (postage paid) with the United States Postal Service.
13. Waiver. Neither party's failure to enforce any provision of this Agreement
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shall be deemed or in any way construed as a waiver of any such provision, nor
prevent that party from thereafter enforcing each and every provision of this
Agreement. The rights granted both parties herein are cumulative and shall not
constitute a waiver of either party's right to assert all other legal remedies
available under the circumstances.
14. Severability. If one or more of the provisions or paragraphs of this
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Agreement shall be held to be illegal or otherwise void or invalid, the
remainder of this Agreement shall not be affected and shall remain in full force
and effect.
15. Governing law. This Agreement shall be interpreted under the laws of the
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State of California, without regard to or application of choice of law rules or
principles.
16. Arbitration. In the event any claim or controversy arises under or
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concerning any provision of this Agreement, including the termination provision
(Paragraph 11), Company and Executive hereby agree that such claim or
controversy shall be settled by final, binding arbitration in accordance with
the Employment Dispute Resolution Rules of the American Arbitration Association,
provided, however, that the impartial arbitration shall be chosen as follows: if
Company and Executive are unable to agree upon an impartial arbitrator within
five (5) days of a request for arbitration, the parties shall request a panel of
five (5) labor and employment arbitrators from the American Arbitration
Association and shall alternatively strike names until a single arbitrator
remains. Arbitration shall occur, if practicable, in Santa Xxxxx County, CA.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Depositions may be taken and other discovery may
be obtained during such arbitration proceedings to the same extent as authorized
in civil judicial proceedings, subject to any limitations placed on discovery by
the arbitrator. The parties shall share equally in the costs of conducting the
arbitration and shall each pay their expenses, but the prevailing party shall be
entitled to recover its reasonable attorneys' fees. Notwithstanding the
foregoing, nothing herein shall preclude or limit Company from seeking
injunctive relief from a court of competent jurisdiction. Executive
acknowledges and
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agrees that, by agreeing to this provision, he is agreeing to arbitrate any
claim relating to his employment, whether or not it arises under the terms of
this Agreement, that may arise under federal and state laws including, but not
limited to, claims arising under Title VII, the Age Discrimination in Employment
Act, the Americans with Disabilities Act and the Fair Employment and Housing
Act. EXECUTIVE FURTHER UNDERSTANDS THAT BY AGREEING TO ARBITRATE EMPLOYMENT
CLAIMS HE IS WAIVING HIS RIGHT TO BRING AN ACTION AGAINST Company IN A COURT OF
LAW, EITHER STATE OR FEDERAL, AND IS WAIVING HIS RIGHT TO HAVE HIS CLAIMS AND
DAMAGES, IF ANY, DETERMINED BY A JURY.
17. Entire Agreement. This Agreement, any stock option agreements and the
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Employee Proprietary Information Agreement signed by the Executive contain the
entire agreement of the parties and supersede and replace any other Agreement.
Except as provided herein, this Agreement may be modified only by an agreement
in writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought. Only Company's Board has the
authority to make such modifications of this Agreement on behalf of Company.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
COMPANY:
Best Internet Communications, Inc.
By: /s/ Xxxxx X. Xxxxx
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Chief Financial Officer
EXECUTIVE:
/s/ Xxxxx X. Xxxxxx
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Xxx Xxxxxx
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