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EXHIBIT 10.8A
EMPLOYMENT AGREEMENT
This Employment Agreement (the "AGREEMENT") is made and
entered into as of the 3rd day of May, 1999 (the "EFFECTIVE DATE"), by and
between XXX.XXX, Inc., a Delaware corporation (the "COMPANY"), and Xxxx
Xxxxxxxxx ("EXECUTIVE").
WHEREAS, the Company desires to employ Executive to provide personal
services to the Company, and wishes to provide Executive with certain
compensation and benefits in return for his services; and
WHEREAS, Executive wishes to be employed by the Company and provide
personal services to the Company in return for certain compensation and
benefits;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:
1. EMPLOYMENT; DUTIES. Subject to the terms and conditions set forth herein,
the Company agrees to employ Executive as its Chief Executive Officer and
President and Executive hereby accepts such employment. Executive shall serve
in an executive capacity and shall perform such duties as are customarily
associated with his title, consistent with the Bylaws of the Company and as
required by the Board of Directors of the Company. Executive will be based out
of the Company's offices to be located in the District of Columbia metro area
or at such other location mutually agreed to by Executive and the Company.
During the term of his employment with the Company, Executive will devote his
best efforts and substantially all of his business time and attention to the
business of the Company. This Agreement is for at-will employment.
2. SALARY AND BENEFITS
(a) BASE SALARY AND PERFORMANCE BONUS. Executive will receive for services to
be rendered hereunder an annualized base salary of Two Hundred Twenty-Five
Thousand Dollars ($225,000), payable on a bi-weekly basis, subject to
adjustment in accordance with the policies of the Company. Executive may
receive such discretionary performance bonuses as the Compensation Committee of
the Board of Directors of the Company, in its sole discretion and from time to
time, deems appropriate. All such payments are subject to ordinary withholdings
for tax and social security purposes.
(b) VACATION. Executive will accrue paid vacation time pursuant to the
Company's general vacation policy, which will not be less than the vacation
policy in effect on the date of this Agreement.
(c) BENEFITS. Executive will be entitled to participate in the Company's
standard Executive benefit programs, including medical and disability programs,
and in such additional benefit programs, as may in the future be made available
by the Company to the extent that he/she is eligible under the general
provisions thereof. In the case of any Sale of the Company, benefit
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programs made available to Executive will be no less favorable than benefit
programs made available to Executive in effect on the date of this Agreement.
(d) STOCK OPTIONS. Executive will receive a non-qualified stock option to
purchase two hundred twenty-five thousand (225,000) shares of the Company's
common stock at a price of Thirty Dollars ($30.00) per share (the "OPTIONS").
Fifty-six thousand two hundred fifty (56,250) of the shares will be fully
vested on the Effective Date with the remainder to vest in equal annual
installments over three years beginning on December 31, 1999 and thereafter on
December 31, 2000 and December 31, 2001. The Options will vest in full
immediately prior to the closing of a Sale of the Company.
(e) MOBILE EMPLOYEE EXPENSES. The Company will reimburse Executive's
business-related cell phone charges, pager, personal digital assistant and
high-speed Internet data connection to his home.
3. TERMINATION.
(a) MUTUAL AGREEMENT. This Agreement may be terminated at any time by the
mutual written agreement of the Company and Executive.
(b) TERMINATION OTHER THAN FOR CAUSE. If Executive is terminated by the Company
for any reason other than for Cause (as defined in Section 5 below), and in
exchange for Executive signing a waiver of claims against the Company as of the
termination date in a form reasonably acceptable to the Company, Executive will
receive the following:
(i) all of Executive's stock options (including the Options)
shall be fully vested and may be exercised by Executive according to their
terms;
(ii) The Company shall pay Executive all accrued
compensation, including payment for accrued but unused vacation days,
unreimbursed expenses to the date of termination as provided herein, as well as
any expenses incurred by the Executive with the Company's prior written
approval, such as expenses incurred in returning Company records; and
(iii) For twelve (12) full calendar months, pursuant to the
provisions of COBRA, the Company shall provide Executive and his family with
all group health benefits which the Company provided immediately prior to such
termination; provided, however, that such benefits will be terminated if
Executive subsequently joins or becomes employed by another organization which
provides Executive and his family with group health benefits comparable to
those provided by the Company under this paragraph. The Company shall be
responsible for paying all COBRA premiums for no more than twelve (12) months.
(c) FOR CAUSE. The Company may terminate this Agreement at any time for Cause
effective immediately upon written notice to Executive (except termination for
Cause which requires advance notice as set forth in the definition of Cause set
forth in Section 5 below). If the Company terminates this Agreement for Cause,
Executive shall not be entitled to any
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further payments except (i) unreimbursed expenses to the date of termination
and (ii) any accrued compensation, including accrued benefits and payments for
accrued but unused vacation days, and (iii) the entitlement to COBRA benefits
at the employee's cost for twelve (12) months.
(d) DISABILITY OR DEATH. The Company may terminate this Agreement upon the
death or disability of Executive. For purposes of this Agreement, Executive
shall be considered disabled if he is unable to perform his/her duties under
this Agreement as a result of injury, illness or other disability for a period
of one hundred eighty (180) consecutive days, or one hundred eighty (180) days
in a three hundred sixty-five (365) day period, and shall not have returned to
the performance of duties within thirty (30) days after receiving written
notice of termination. If the Company terminates this Agreement upon the death
or disability of Executive, the Company shall pay Executive or his estate a
lump sum equal to all accrued compensation, including accrued benefits, accrued
but unused vacation days and unreimbursed expenses to the date of termination
as provided herein.
(e) DATE OF TERMINATION; PAYMENT. In each of the foregoing cases, except those
provisions where termination is automatic upon notice to Executive, termination
is the date of actual termination, not the date notice of termination is given.
All payments for unpaid monthly compensation shall be made based upon the
normal payroll processing schedule and all payments for reimbursement shall be
made within forty-five (45) days after the end of the month following the month
in which termination occurred.
(f) TERMINATION OR CONSTRUCTIVE TERMINATION IN CONNECTION WITH A SALE OF THE
COMPANY. In the event of a Sale of the Company, in exchange for Executive
signing a waiver of claims against the Company as of the termination date in a
form acceptable to the Company (or its successor), the Company (or its
successor) will pay Executive cash severance in the amount of two (2) times
Executive's then current annual base salary if either (i) Executive is
terminated or (ii) Executive is not terminated but in the six (6) month period
following the Sale of the Company, without Executive's prior consent, either
(A) the Executive's job responsibilities are significantly changed or (B) the
Executive's business or office location is moved more than fifty (50) miles
from the Executive's job location prior to the Sale of the Company. The
severance will be paid in bi-weekly installments.
(g) FAILURE TO AGREE TO SEVERANCE. If the Executive resigns without executing a
waiver of claims and agreeing to the severance arrangements set forth in
Section 3(b), then the Executive will receive the same payments as if it were a
termination for cause by the Company.
4. MISCELLANEOUS.
(a) ASSIGNMENT. This Agreement may not be assigned by any party hereto;
provided, however, that the Company may assign this Agreement in connection
with a Sale of the Company (as defined below) so long as the assignee assumes
all of the Company's obligations thereunder.
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(b) NOTICES. Any notices provided hereunder must be in writing and shall be
deemed effective upon the earlier of personal delivery (including personal
delivery by telex) or the third day after mailing by first class mail to the
recipient at the address indicated below:
To the Company:
XXX.XXX, Inc.
0000 Xxxxx Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: President/Chief
Executive Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
To Executive:
Xxxx Xxxxxxxxx
0000 Xxxxxxxxxx Xxxxx
XxXxxxx, Xxxxxxxx 00000
or to such other address or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending
party.
(c) WAIVER. A waiver by the Company or Executive of a breach of any provision
of this Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach by the other party.
(d) GOVERNING LAW. This Agreement shall be deemed a contract made under, and
for all purposes shall be construed in accordance with, the laws of the State
of Colorado.
(e) SEVERABILITY. In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions or portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
(f) ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof. This Agreement may be
changed only by an agreement in writing signed by the parties.
(g) COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
(h) ATTORNEY'S FEES. If the Executive brings a lawsuit to enforce the terms of
this Agreement and substantially prevails in such suit, the Company will be
responsible for reimbursing the Executive's reasonable attorneys fees and costs
associated with such litigation.
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(i) NON-SOLICITATION. While employed by the Company and for six (6) months
thereafter, Executive agrees that he will not, either directly or indirectly,
solicit or attempt to solicit: any employee, consultant or independent
contractor of the Company to terminate his or her relationship with the Company
in order to become an employee, consultant or independent contractor to or for
any other person or business entity; or the business of any customer, vendor or
distributor of the Company which, at the time of termination or six (6) months
immediately prior thereto, was a customer, vendor or distributor of the
Company.
(j) NON-COMPETITION. Executive acknowledges that he will gain extensive and
valuable experience and knowledge in the business conducted by the Company and
will have extensive contacts with customers of the Company. Accordingly,
Executive covenants and agrees with the Company that he will not compete
directly or indirectly with the Company, either during the time he is employed
by the Company or during the one-year period beginning immediately upon
termination of Executive's employment by the Company. For purposes of this
Section 4(j), the term "the Company" will be deemed to include subsidiaries,
parents and affiliates of the Company, excluding a parent or affiliate engaged
in a different line of business than the Company. Competing directly or
indirectly with the Company, its subsidiaries, parents or affiliates will mean
engaging or having a material interest, directly or indirectly, as owner,
employee, officer, director, partner, venturer, stockholder, capital investor,
consultant, agent, principal, advisor or otherwise, either alone or in
association with others, in the operation of any entity engaged in the business
of electronic mail services. Competing directly or indirectly with the Company,
as used in this Agreement, will not be deemed to include an ownership interest
as a passive investor, which for purposes of this Agreement will mean the
beneficial ownership of less than one percent (1%) of the outstanding shares of
any series or class of securities of any publicly-traded competitor of the
Company.
5. DEFINITIONS. As used herein, the following terms shall have the following
meanings:
(a) "CAUSE" as used herein shall mean: (i) dishonesty which is not the result
of an inadvertent or innocent mistake of Executive with respect to the Company
or any of its subsidiaries; (ii) willful misfeasance or nonfeasance of duty by
Executive that materially injures the reputation, business or business
relationships of the Company or any of its subsidiaries or any of their
respective officers, directors or Executives; (iii) any conduct which would be
sufficient to criminally charge Executive with the commission of a crime
involving moral turpitude or a crime other than a vehicle offense which could
reflect in some material fashion unfavorably upon the business or business
relationships of the Company or any of its subsidiaries or any of their
respective officers, directors or Executives; (iv) prolonged absence from work
by Executive (other than by reason of disability due to physical or mental
illness) or failure, neglect or refusal by Executive to perform his/her duties
and responsibilities without the same being corrected upon thirty (30) days
prior written notice; or (v) if Executive materially violates any term of this
Agreement or the Company's employment policies and procedures (including but
not limited to the Company's policies with respect to sexual harassment and
discrimination) and such action or failure is not remedied or reasonable steps
to effect such remedy are not commenced within thirty (30) days of written
notice.
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(b) "SALE OF THE COMPANY" as used herein shall mean any change in control of
the Company, including any (i) sale of all or substantially all of the assets
of the Company, (ii) merger or consolidation in which the Company is not the
surviving corporation or (iii) reverse merger in which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXX.XXX, INC. EXECUTIVE
By: /s/ Xxxx Street /s/ Xxxx Xxxxxxxxx
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Xxxx Street Xxxx Xxxxxxxxx
Chairman of the
Board of Directors
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