Exhibit 10.9
EMPLOYMENT AGREEMENT
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This Agreement is made and entered into as of June 14, 2000 (the "Effective
Date"), by and between XPEDIOR INCORPORATED hereinafter referred to as
"Xpedior," and Xxxxxx X. Xxxxxx, hereinafter referred to as "Employee."
In consideration of the mutual covenants and agreements hereinafter set
forth, the parties agree as follows:
1. OFFER AND ACCEPTANCE OF EMPLOYMENT. Employee's officer title shall be
Senior Vice President and Chief Financial Officer of Xpedior as of the Effective
Date. Employee agrees to accept such employment and to perform the services
specified herein, all upon the terms and 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 and Chief Financial Officer 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, ensuring the integrity and
timeliness of Xpedior's financial statements and reports; supervising and
coordinating the development and implementation of financial procedures and
controls directed at safeguarding Xpedior's assets and goodwill, optimizing cash
flow and maximizing return on investment; managing the strategic direction and
day-to-day operations and performance of Xpedior finance and accounting
organization; ensuring the accurate and timely preparation of management
reports, as well as compliance with all applicable federal, state, and local tax
laws and regulations; compliance with all applicable Securities and Exchange
Commission and National Market System accounting and financial reporting
requirements; establishing, enhancing and promoting positive relationships and
strong communications procedures with Xpedior's stockholders, lenders, parent
company officials, and the investment community; development of regional,
national, and global business plans and operating budgets with the President and
Chief Executive Officer; assistance in the development of additional lines of
business with the President and Chief Executive Officer consistent with
Xpedior's business strategy; participate fully as a member of Xpedior's
executive strategy committee; and participate fully as a member of Xpedior's
executive team evaluating acquisition and partnership opportunities for Xpedior.
Employee agrees that during the term of this Agreement, Employee will devote
Employee's entire 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 Eighteen Thousand Seven Hundred Fifty Dollars ($18,750.00) per
month, which is equivalent to Two Hundred Twenty Five Thousand Dollars
($225,000.00) 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 fifty percent (50%) 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 June
30, 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 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. Subject to the approval of the Compensation
Committee and the terms of the Xpedior 1999 Stock Incentive Plan (the "Stock
Plan"), Employee shall be granted an option to purchase One Hundred Thirty
Thousand (130,000) shares of Xpedior common stock at an exercise price equal to
the fair market value of such shares on the
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date Employee's employment with Xpedior commences. Such options will vest and
become exercisable in equal monthly installments over the thirty six 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, 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
will be set forth in a separate Nonstatutory Stock Option Agreement issued in
conformity with the Stock Plan to be executed and delivered by the parties as
soon as reasonably practicable following the commencement of Employee's
employment with 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 two (2) years from the
Effective Date (the "Term"). Xpedior or Employee, as the case may be, shall
have the right to terminate employment under this Agreement 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, 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 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,
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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
defined in Section 7.
(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 defined herein) 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 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
Financial and Accounting Officer (within the meaning of such term as
defined under the Securities Act of 1933, as amended) of Xpedior, 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; or
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(ii) 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 still be subject to
the Sections 6, 8, 9 and 10 of this Agreement.
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 0000
Xxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000; and (b) to Xpedior Incorporated at
Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention:
President and Chief Executive Officer, with a copy to Xpedior Incorporated at 00
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: Senior
Vice President and General Counsel, or (c) to other such address as either party
shall designate by written notice to the other party.
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,
Metamor Worldwide, 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 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;
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(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.
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,
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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.
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 for any reason (voluntarily or involuntarily), 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, (1) engage
anywhere in the world in an activity which could deemed to be a conflict of
interest under
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Section 7 of this Agreement, or (2) 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 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 Chicago, Illinois. 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, but
not attorney's fees, 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 State of Illinois.
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.
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15. ENTIRE AGREEMENT; SURVIVAL. This Agreement supersedes, replaces and
merges all previous agreements and discussions relating to the same or similar
subject matters between Employee and Xpedior and constitutes the entire
Agreement between Employee and Xpedior with respect to the subject matter of
this Agreement. 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: June 14, 2000 Date: June 14, 2000
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