Exhibit 10.11
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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This Agreement is made and entered into as of July 24, 2000 (the "Effective
Date"), by and between XPEDIOR INCORPORATED, a Delaware corporation hereinafter
referred to as "Xpedior," and Xxxxxx X. Xxxxxx, hereinafter referred to as
"Employee."
WHEREAS, Xpedior and Employee entered into that certain Employment
Agreement dated as of March 13, 2000 (the "Prior Employment Agreement"),
providing, among other things, for the employment of Employee as Senior Vice
President and General Counsel of Xpedior, and for the payment of certain
severance and other benefits to Employee upon the terms and subject to the
conditions set forth in the Prior Employment Agreement; and
WHEREAS, following the effective date of the Prior Employment Agreement,
Employee has been appointed by Xpedior's Board of Directors to the office of
Corporate Secretary of Xpedior, and Employee has assumed substantially greater
duties and responsibilities than the duties and responsibilities contemplated by
Xpedior and Employee under the Prior Employment Agreement; and
WHEREAS, in recognition of the substantially greater duties and
responsibilities assumed by Employee following the effective date of the Prior
Employment Agreement, and to provide further incentive to the Employee to
continue his Employment with Xpedior, the Compensation Committee of Xpedior's
Board of Directors has agreed to amend and restate the terms and conditions of
Employee's employment by Xpedior in accordance with the terms and subject to the
conditions set forth in this Amended and Restated Employment Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, Employee and Xpedior, intending to be legally bound, hereby agree
as follows:
1. TITLE; CONTINUATION OF EMPLOYMENT. Employee's officer title shall
continue to be Senior Vice President, General Counsel and Corporate Secretary of
Xpedior. Employee agrees to perform the services specified herein, all upon the
terms and subject to the conditions hereinafter stated.
2. DUTIES. Employee agrees to discharge faithfully, diligently and to the
best of his ability during the term hereof the duties incidental to the position
of Senior Vice President, General Counsel and Corporate Secretary of Xpedior.
Employee agrees to serve in such capacity and perform such duties as the
President and Chief Executive Officer may reasonably direct from time to time
and which are consistent with Employee's position and status. Employee's duties
and responsibilities will include, but not be limited to, responsibility for all
of Xpedior's worldwide legal affairs including compliance with all applicable
Securities and Exchange Commission and National Market System listing and
reporting requirements; enforcement of Xpedior's xxxxxxx xxxxxxx policies and
procedures; corporate governance of Xpedior and all of its subsidiaries;
counsel to all operating lines of Xpedior's business; establishment,
implementation, and supervision of Xpedior's contract administration policies
and procedures, including recruitment, deployment, and supervision of staff
adequate to support Xpedior's contract administration function; manage and
supervise all merger and acquisition activities and strategic partnership
arrangements; ensure compliance and enforcement of Xpedior's rights and
obligations under its contractual arrangements with its employees, clients and
vendors; assist the Chief Financial Officer in ensuring compliance with revenue
recognition principles applicable to Xpedior's business under generally accepted
accounting principles; protect Xpedior's intellectual property rights; manage
and supervise all litigation and threatened litigation; support all human
resources and employment and labor law activities; implement and supervise
Xpedior's stock option program and employee stock purchase plan; assist senior
management in the development of regional, national, and global business plans
and operating budgets; and participate fully as a member of Xpedior's executive
strategy committee. Employee agrees that during the term of this Agreement,
Employee will devote substantially all Employee's business time, skill, energy,
knowledge and best efforts to the business and affairs of Xpedior, and that
Employee will not engage, directly or indirectly, in any other business interest
or activities, whether or not similar to that of Xpedior, except with the prior
written consent of the Xpedior Board of Directors, in its sole discretion.
Employee shall be expected to commit whatever time is necessary for the normal
responsibilities of Xpedior management.
3. COMPENSATION. During the term of this Agreement, Xpedior agrees to pay
the following compensation to Employee, and the Employee agrees to accept such
compensation:
3.1 Base Compensation. Employee shall receive a base cash salary at
the rate of Fifteen Thousand Dollars ($15,000.00) per month, which is equivalent
to One Hundred Eighty Thousand Dollars ($180,000.00) over the course of a twelve
(12) month period, through the term of this Agreement ("Base Compensation"). The
Base Compensation constitutes a gross amount and shall be paid in substantially
equal semi-monthly installments subject to such withholding and deductions as
may from time to time be legally required or authorized. The Base Compensation
will be reviewed from time to time by the Compensation Committee of Xpedior's
Board of Directors (the "Compensation Committee"), and the Compensation
Committee, in its sole discretion, may make appropriate adjustments.
3.2 Bonus. Immediately upon the commencement of his employment with
Xpedior, Employee shall be eligible to receive an annual bonus (the "Incentive
Bonus") of up to thirty three (33%) of the Base Compensation paid to Employee
under this Agreement based on Employee's meeting or exceeding certain
performance objectives. The performance objectives for the Incentive Bonus for
the remainder of year 2000 shall be mutually agreed upon by no later than August
31, 2000, and for each subsequent calendar year shall be mutually agreed upon no
later than March 31 of the applicable calendar year. In each of these years,
unless otherwise mutually agreed in writing, two thirds of the Incentive Bonus
will be based on meeting budgeted revenue expectations for the budget year, and
the remainder for meeting an additional target goal. The President and Chief
Executive Officer shall determine whether Employee has met or exceeded the
performance objectives for each year. Incentive Bonuses will be paid on or
before March 31 of the year following the calendar year during which the bonus
criteria was achieved (the "Payout Date"), provided, however, that up to 75% of
the total Incentive Compensation will be advanced over one
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or more quarterly payments if the President and Chief Executive Officer
determines that year-to-date performance is on track for meeting the established
performance objectives for that year. If Employee's employment terminates prior
to the Payout Date for any reason other than for Cause (as hereinafter defined),
Xpedior will pro-rate and pay Employee the amount of unpaid portions of the
Incentive Bonus which Employee has earned. If Employee is advanced any part of
an Incentive Bonus in any year during the which the President and Chief
Executive Officer ultimately determines that performance objectives were not met
or exceeded, then the amounts thus paid will be credited against the first
dollars otherwise to be paid in Incentive Bonus in subsequent years or credited
against any first dollars that may be owed to Employee by Xpedior, including
payments owed in consequence of a termination of this Agreement.
3.3 Benefits. Employee shall be entitled to participate in any plan
established by Xpedior to provide benefits to employees at the time Employee
meets the eligibility criteria established for each plan.
3.4 Equity Compensation. The Employee has been granted an option to
purchase seventy thousand (70,000) shares of Xpedior common stock at an exercise
price equal to $16.06, which is equal to the fair market value of such shares on
the effective date of the Prior Employment Agreement. Such options will
continue to vest and become exercisable in equal monthly installments over the
thirty six (36) month period following the commencement of Employee's employment
with Xpedior; provided, however, such option will immediately vest and become
fully exercisable if there is a change of control of Xpedior and, within one (1)
year of such change of control, Employee's employment is terminated by Xpedior
without Cause (as such term is hereinafter defined), or Employ resigns from his
position after there has been a Constructive Termination (as such term is
hereinafter defined) of Employee's employment with Xpedior. All of the terms
and conditions of the stock option are set forth in the Nonstatutory Stock
Option Agreement dated March 13, 2000, between Employee and Xpedior.
4. TERM AND TERMINATION OF EMPLOYMENT. Subject to earlier termination as
provided herein, Xpedior and Employee agree that the term of this Agreement
shall commence on the Effective Date and continue for the two (2) year period
commencing on March 13, 2000, and ending on March 12, 2002 (the "Term").
Xpedior or Employee, as the case may be, shall have the right to terminate
Employee's employment with Xpedior at any time for any of the following reasons:
(a) Termination For Cause. Prior to the end of the Term of this
Agreement, Xpedior, upon ten (10) days' prior written notice to Employee,
Xpedior may discharge Employee for Cause and terminate this Agreement without
any further liability hereunder to Employee or his estate, other than the
obligation to pay to Employee his base salary accrued to the date of termination
and accrued vacation. For purposes of this Agreement, a discharge for "Cause"
shall mean a discharge resulting from a determination by the Xpedior' Board of
Directors that Employee:
(i) has failed to diligently perform the material duties assigned
to Employee under this Agreement or to have abandoned Employee's assigned
job duties and
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not to have remedied the situation within a reasonable period of time after
receipt of written notice from Xpedior specifying the failure;
(ii) has failed to abide by Xpedior's policies, rules, procedures
or directives and not to have remedied the situation within a reasonable
period of time after receipt of written notice specifying the failure;
(iii) has acted in a grossly negligent manner, or has engaged in
reckless or willful misconduct with respect to Xpedior which results or
could have resulted in material harm to Xpedior's standing among customers,
suppliers, employees and other business relationships;
(iv) has been found guilty by a court of law of fraud, dishonesty
and/or a felony crime, or any other crime involving moral turpitude;
(v) has engaged in employee misconduct, including but not limited
to, breach of fiduciary duty, theft, fraud, dishonesty, embezzlement,
violation of securities laws, violation of employment-related laws
(including but not limited to laws prohibiting discrimination in
employment), violation of non-competition, non-solicitation or
confidentiality obligations or this Agreement, falsification of employment
applications or other business records, insubordination, habitual
absenteeism or tardiness, or unethical activity or has failed to
immediately disclose a Conflict of Interest as such term is defined under
Section 7 hereof;
(vi) fails to agree to and execute any written amendment to any
part or all of Sections 6-13 of this Agreement, within thirty (30) days of
receipt of the Xpedior Companies' (as hereinafter defined) written request,
provided said requested amendment revises said Sections to conform with
applicable law, and provided further, that said requested amendment does
not expand the time or geographic limits set forth herein.
In making any determination described above, the Board must act in good faith.
Notwithstanding the foregoing, Employee shall in no event be deemed to have been
discharged for Cause unless and until there shall have been delivered to
Employee a termination notice in the form of a copy of a resolution duly adopted
by the affirmative vote of not less than a majority of the entire membership of
the Board.
(b) Termination Without Cause; Constructive Termination. Prior to the
end of the Term of this Agreement, Xpedior, upon written notice to Employee, may
discharge Employee without Cause and terminate this Agreement, such termination
to be effective upon the date as specified in said notice. In the event Xpedior
terminates Employee without Cause or Employee is Constructively Terminated,
Xpedior shall pay Employee an amount equal to twelve times (12) Employee's then
current monthly Base Compensation, less legally required withholdings and
authorized deductions, to be paid in substantially equal semi-monthly
installments rather than as one lump sum, in return for Employee's execution and
delivery to Xpedior of a termination of employment agreement which contains a
full release of all claims against Xpedior and its affiliates, predecessors,
parents, subsidiaries, successors, and assigns, and their respective
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directors, officers, employees, agents and attorneys. For purposes of this
Agreement, "Constructively Terminated" or "Constructive Termination" shall mean
the occurrence of any of the following events without Employee's express written
consent:
(i) A substantial and adverse change in the Employee's duties,
control, authority, status or position with Xpedior; or the assignment to
the Employee of any duties or responsibilities which are materially
inconsistent with such status or position, or a material reduction in the
duties and responsibilities previously exercised by the Employee; or a loss
of title, loss of office, loss of significant authority, power or control,
including, without limitation, the loss of Employee's status as principal
legal officer of a company registered under the Securities and Exchange Act
of 1934, as amended, whether by virtue of a change of control of Xpedior or
otherwise; or any removal of him from or any failure to reappoint or
reelect him to such positions, except in connection with the termination of
his employment for Cause;
(ii) Any relocation of Employee's office out of the Greater
Boston Metropolitan Area; or
(iii) Any reduction by Xpedior in Employee's Base Compensation,
unless such reduction shall also apply to similarly situated executives of
Xpedior and does not exceed ten percent (10%) per year (unless otherwise
agreed to in writing by Employee).
(d) Resignation. Should Employee, at any time during the term of this
Agreement, desire to resign his employment, Employee shall submit notice of his
proposed resignation to the Board at least thirty (30) days prior to the
intended effective date thereof. This notice period may be waived by the Board
in its sole discretion. Except as otherwise expressly provided herein, Xpedior
will have no further obligation if Employee resigns other than to pay, subject
to applicable withholding requirements, compensation already earned by Employee
including any obligation under any applicable benefit plan and to make COBRA
coverage available. Employee understands that Employee will continue to be
subject to the Sections 6, 8, 9 and 10 of this Agreement following any such
resignation.
5. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent, postage prepaid, by
certified or registered mail, return-receipt requested (a) to Employee at 00
Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000; and (b) to Xpedior
Incorporated at Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Attention: President and Chief Executive Officer, or (c) to other such address
as either party shall designate by written notice to the other party in
accordance with the provisions of this Section 5.
6. CONFIDENTIAL INFORMATION. Employee acknowledges that in the course of
his employment by Xpedior, Xpedior will provide him with certain confidential
and proprietary information and knowledge concerning the operations of Xpedior,
PSINet Consulting Solutions Holdings, Inc., a Delaware Corporation, and PSINet
Inc., a New York corporation, and their respective affiliates, subsidiaries,
successors, and assigns (hereinafter individually and collectively referred to
as the "Xpedior Companies") which the Xpedior Companies desire to protect. This
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confidential and proprietary information shall include, but not be limited to:
(i) terms and conditions of and the identity of the parties to the
Xpedior Companies' agreements with their clients and suppliers,
including but not limited to price information;
(ii) management systems, policies or procedures, including the
contents of related forms and manuals;
(iii) professional advice rendered or taken by the Xpedior Companies;
(iv) the Xpedior Companies' own financial data, business and
management information, strategies and plans and internal
practices and procedures, including but not limited to internal
financial records, statements and information, cost reports or
other financial information;
(v) proprietary software, systems and technology-related
methodologies of the Xpedior Companies and their clients;
(vi) salary, bonus and other personnel information relating to the
Xpedior Companies' personnel;
(vii) the Xpedior Companies' business and management development
plans, including but not limited to proposed or actual plans
regarding acquisitions (including the identity of any
acquisition contacts), divestitures, asset sales, and mergers;
(viii) decisions and deliberations of the Xpedior Companies'
committees or boards;
(ix) litigation, disputes, or investigations to which the Xpedior
Companies may be party and legal advice provided to Employee on
behalf of the Xpedior Companies in the course of Employee's
employment; and
(x) the particular information technology needs and concerns of the
Xpedior Companies' customers, clients and active prospects.
Employee understands that such information is confidential and proprietary, and
he agrees not to reveal such information to anyone outside the Xpedior Companies
so long as the confidential or secret nature of such information shall continue.
Employee further agrees that he will at no time use such information in
competing with the Xpedior Companies. At such time as Employee shall cease to
be employed by Xpedior, he will surrender to Xpedior all papers, documents,
writings and other property produced by him or coming into his possession by or
through his employment and relating to the information referred to in this
paragraph, and Employee agrees that all such materials will at all times remain
the property of the Xpedior Companies.
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7. CONFLICTS OF INTEREST. Subject to the provisions of Section 2 above,
in keeping with Employee's fiduciary duties to the Xpedior Companies, Employee
agrees that he shall not, acting alone or in conjunction with others, directly
or indirectly, become involved in a conflict of interest, or upon discovery
thereof, allow such a conflict to continue. Moreover, Employee agrees that he
shall disclose to the Board any facts which might involve any reasonable
possibility of a conflict of interest. It is agreed that a direct or indirect
interest in, connection with, or benefit from any outside activities,
particularly commercial activities, which interest might in any way adversely
affect the Xpedior Companies involves a possible conflict of interest.
Circumstances in which a conflict of interest on the part of Employee would or
might arise, and which should be reported immediately by Employee to the Board,
include, but are not limited to the following:
(i) Ownership of a material interest in any supplier, contractor,
subcontractor, or other entity with which the Xpedior Companies
do business;
(ii) Acting in any capacity including director, officer, partner,
consultant, employee, distributor, agent or the like, for
suppliers, contractors, subcontractors, or other entities with
which the Xpedior Companies do business;
(iii) Acceptance, directly or indirectly, of payments, services or
loans from a supplier, contractor, subcontractor, or other
entity with which the entity does business, including but not
limited to, gifts, trips, entertainment, or other favors, of
more than a nominal interest;
(iv) Misuse of information or facilities of the Xpedior Companies to
which Employee has access in a manner which will be detrimental
to the Xpedior Companies' interest, such as, utilization for
Employee's own benefit of know-how or information developed
through the Xpedior Companies' business or research activities;
(v) Disclosure or other misuse of information of any kind obtained
through Employee's connection with the Xpedior Companies;
(vi) Acquiring or trading in, directly or indirectly, other
properties or interests connected with the services provided by
the Xpedior Companies;
(vii) The appropriation by Employee or diversion to others, directly
or indirectly, of any business opportunity in which it is known
or could reasonably be anticipated that the Xpedior Companies
would be interested; and
(viii) The ownership, directly or indirectly, of a material interest
in an enterprise in competition with the Xpedior Companies or
acting as a director, officer, partner, consultant, employee or
agent of any enterprise which is in competition with the
Xpedior Companies.
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Nothing contained in this Agreement shall prohibit Employee from owing no
more than one percent (1%) of the publicly traded capital stock or possessing
greater than a one percent (1%) ownership interest in any company.
8. NON-COMPETITION AND NON-SOLICITATION COVENANTS. In return for the
consideration stated in this Agreement, including the promise of Xpedior to
provide Employee with confidential information, Employee agrees that, during
Employee's employment and for one (1) year after the termination of Employee's
employment as a result of Employee's resignation or as a result of the
termination of Employee's employment for Cause, Employee shall not directly or
indirectly, on behalf of anyone other than the Xpedior Companies, either alone
or in conjunction with any other person or entity, (a) engage anywhere in the
world in an activity which could deemed to be a conflict of interest under
Section 7 of this Agreement, or (b) employ, solicit, induce, or recruit for
employment any person then employed by the Xpedior Companies or employed by the
Xpedior Companies at any time during the immediately preceding one (1) year
period. Employee agrees that it is his intention that any restriction contained
in this Section 8 that is determined to be unenforceable be modified by any
court having jurisdiction to be reasonable and enforceable, and, as modified, to
be fully enforced.
9. SPECIFIC PERFORMANCE. Employee acknowledges that a remedy at law for
any breach or attempted breach of Sections 6, 7 and 8 of this Agreement will be
inadequate, agrees that the Xpedior Companies may be entitled to specific
performance and injunctive and other equitable relief in case of any such breach
or attempted breach, and further agrees to waive any requirement for the
securing or purchasing of any bond in connection with the obtaining of any such
injunctive or any other equitable relief.
10. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, the breach thereof, Employee's employment with Xpedior, or the
termination thereof, whether arising during or after the period of employment or
under statute, common law or otherwise, except for the injunctive relief
described in Section 9 of this Agreement, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (AAA), and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The location of such
arbitration shall be Boston, Massachusetts. To select an arbitrator, each party
shall strike a name from the list submitted by AAA with the grieving party
striking first. The arbitrator shall not have the power to add to or ignore any
of the terms and conditions of this Agreement. His decision shall not go beyond
what is necessary for the interpretation and application of this Agreement and
obligations of the parties under this Agreement. Cost of such arbitration,
including attorneys' fees and related out of pocket expenses, will be paid by
the losing party.
11. BINDING EFFECT. This Agreement shall be binding upon all successors
and assigns of Xpedior. The obligations of Employee under this Agreement are
personal and may not be assigned.
12. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed for all purposes by the laws of the Commonwealth of Massachusetts.
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13. SEVERABILITY. In case any term, phrase, clause, paragraph, section,
restriction, covenant or agreement contained in this Agreement shall be held to
be invalid or unenforceable, the same shall be deemed, and it is hereby agreed
that same is meant to be, severable, and such invalidity or unenforceability
shall not defeat or impair the remaining provisions hereof.
14. WAIVER OF BREACH. The waiver by either party hereto 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 of such breaching party.
15. ENTIRE AGREEMENT; SURVIVAL. This Agreement supersedes, replaces,
merges, and terminates all previous agreements and discussions relating to the
same or similar subject matters between Employee and Xpedior, including, without
limitation, the Prior Employment Agreement, and constitutes the entire agreement
between Employee and Xpedior with respect to the subject matter of Employee's
employment by Xpedior. Employee acknowledges and agrees that he has not relied
on any representations not contained herein, which may have been made to
Employee by any representative of the Xpedior Companies, including but not
limited to representations about the Xpedior Companies or terms of employment.
Notwithstanding anything else contained in this Agreement, the provisions of
Sections 5-16 of this Agreement shall survive termination of this Agreement.
16. MODIFICATION. This Agreement may not be changed or terminated orally,
and no change, termination, or waiver of this Agreement or of any of the
provisions herein contained shall be binding unless made in writing and signed
by both parties, and in the case of Xpedior, by the President and Chief
Executive Officer of Xpedior.
IN WITNESS WHEREOF, the parties hereto have affixed their signatures to
this Agreement on the dates stated below, this Agreement to be effective as of
the Effective Date.
XPEDIOR INCORPORATED
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxx Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
Date: July 24, 2000 Date: July 24, 2000
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