Exhibit 10.15
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (the "Agreement"), effective as of the 1st day of June,
2000, between Prodigy Communications Corporation, a Delaware corporation (the
"Company"), with its principal place of business at 00 Xxxxx Xxxxxxxx, Xxxxx
Xxxxxx, Xxx Xxxx 00000, and Xxxxx Xxxxxxxxxxxx, residing at 000 Xxxx Xxxxxx Xx.,
Xxxxx Xxxxx, XX 00000 (the "Executive").
WHEREAS, the Company has entered into an agreement dated November 19,
1999 with SBC Communications Inc. (the "Investment Agreement") pursuant to which
SBC will acquire an indirect equity interest in the Company on the Closing Date
(as defined in the Investment Agreement); and
WHEREAS, the Company desires to continue to employ the Executive as
President and Chief Operating Officer of the Company and of Prodigy
Communications Limited Partnership, and the Executive desires to be employed in
that capacity following the Closing Date on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:
1. TERM OF EMPLOYMENT.
The Company hereby agrees to continue to employ the Executive, and the
Executive hereby accepts employment with the Company and with Prodigy
Communications Limited Partnership, upon the terms set forth in this Agreement,
for the period commencing on the Closing Date (the "Commencement Date"), and
ending on December 31, 2001 (the "Employment Period"), unless sooner terminated
in accordance with the provisions of Section 4.
2. TITLE; CAPACITY.
The Executive shall serve as President and Chief Operating Officer of
the Company and of Prodigy Communications Limited Partnership. The Executive
shall be based in White Plains, New York or such other place as the Board of
Directors of the Company (the "Board") shall determine. The Executive shall
report to and be subject to the supervision of, and shall have such authority as
is delegated to Executive by the Company's Chief Executive Officer.
The Executive hereby accepts such employment and agrees to undertake the
duties and responsibilities inherent in such position, and such other duties and
responsibilities as the Chief Executive Officer shall from time to time assign
to the Executive. The Executive shall devote Executive's entire business time,
attention and energies to the business and interests of the Company during the
Employment Period. The Executive shall abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes
therein which may be adopted from time to time by the Company.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. The Company shall pay the Executive, in accordance with
its normal payroll practices, an annual base salary of $237,440
commencing on the Commencement Date. Based on performance, such salary
shall be subject to increase consistent with existing merit increase
guidelines.
3.2 PERFORMANCE BONUSES. The Executive shall be eligible to
participate in an annual bonus plan and receive up to 50% of his annual
base salary as a performance bonus during each calendar year of the
Employment Period. During each such year, 50% of such bonus shall be
contingent upon the successful completion of personal goals as mutually
agreed between the Executive and the Chief Executive Officer, and 50% of
such bonus shall be contingent upon the successful completion of
corporate goals as determined by the Company. For purposes of
calculating the performance bonus in this Agreement, base salary shall
include the yearly allowances provided under Sections 3.7 and 3.8. Such
performance bonus shall be determined and paid within 45 days after the
end of each such calendar year during the Employment Period. If the
Executive terminates employment with the Company at any time prior to
the end of the applicable calendar year, the Executive shall be entitled
to receive the performance bonus only in accordance with the provisions
of Article 5.
3.3 RETENTION BONUS. The Executive shall be entitled to receive a
retention bonus in the amount of $534,450, which shall be earned on the
60th day following the Closing Date provided that the Executive's
employment has not terminated prior to such date (except as otherwise
provided in Section 5.3). The retention bonus (to the extent earned)
will be paid as soon as practicable following the 60th day following the
Closing Date.
3.4 OPTION GRANT.
(a) The Company has previously granted the Executive options
to purchase 125,000 shares of common stock of the Company as set forth
in the attached option Summary, of which options to purchase 125,000
shares of common stock of the Company remain outstanding (the
"Outstanding Options"). As of the Closing Date, 50% of each non-vested
Outstanding Option at each strike price shall become immediately
exerciseable. On the 60th day following the Closing Date, the remaining
non-vested Outstanding Options shall become immediately exerciseable,
provided that the Executive's employment has not terminated prior to
that date (except as otherwise provided in Section 5.3). The exercise
period for the Outstanding Options (to the extent otherwise
exerciseable) shall be extended to 12 months after the Executive's
termination or resignation in accordance with the provisions of Section
4.
(b) During the Employment Period, the Company will consider
in good faith on an annual basis the grant of additional stock options
to Executive.
3.5 FRINGE BENEFITS. The Executive shall be entitled to participate
in all fringe benefit programs that the Company establishes and makes
available to its Executives from time to time to the extent that
Executive's position, tenure, salary, age, health and other
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qualifications make him eligible to participate. The Executive's
vacation entitlement shall be four weeks per year.
3.6 REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Executive for all reasonable travel, entertainment and other expenses
incurred or paid by the Executive in connection with the performance of
his duties hereunder, upon presentation by the Executive of
documentation, expense statements, vouchers and/or such other supporting
information as the Company may request; PROVIDED, HOWEVER, that the
nature and amount of such expenses shall be subject to the Company's
expense policies as in effect from time to time.
3.7 HOUSING ALLOWANCE. During the Employment Period, the Company
shall pay to Executive a housing allowance of $3,500 per month to house
the Executive and his immediate family in the greater New York
metropolitan area. The housing allowance will be included in the
Executive's biweekly paychecks and will be subject to applicable
withholding.
3.8 CAR ALLOWANCE. During the Employment Period, the Company shall
provide Executive with a car allowance of $2,166 per month. The car
allowance will be included in the Executive's biweekly paychecks and
will be subject to applicable withholding.
4. EMPLOYMENT TERMINATION.
The employment of the Executive pursuant to this Agreement shall
terminate upon the occurrence of any of the following:
4.1 At the election of the Company, for Cause (as hereinafter
defined) immediately upon written notice by the Company to the
Executive. For purposes of this Agreement, "Cause" shall mean (a) a good
faith finding by the Board, after notice to the Executive and an
opportunity to be heard, of the failure of the Executive to perform his
reasonably assigned duties, or the Executive's gross dishonesty, gross
negligence or gross misconduct, or (b) the conviction of the Executive
of, or the entry of a plea of guilty or nolo contendere by the Executive
to, any felony;
4.2 Thirty days after the death or Disability (as hereinafter
defined) of the Executive. For purposes of this Agreement, "Disability"
shall mean the inability of the Executive, due to a physical or mental
disability, for a period of 90 days, whether or not consecutive, during
any 360-day period to perform, with or without reasonable accommodation,
the services contemplated under this Agreement. A determination of
Disability shall be made by a physician satisfactory to both the
Executive and the Company; PROVIDED THAT if the Executive and the
Company do not agree on a physician, the Executive and the Company shall
each select a physician and these two together shall select a third
physician, whose determination as to Disability shall be binding on all
parties;
4.3 At the election of the Executive, upon not less than four (4)
weeks' prior written notice of termination, or at the election of the
Company, upon written notice of termination; or
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4.4 Upon the expiration of the Employment Contract.
5. EFFECT OF TERMINATION.
5.1 TERMINATION FOR CAUSE OR AT ELECTION OF THE EXECUTIVE. In the
event the Executive's employment is terminated for Cause pursuant to
Section 4.1, or the Executive's employment is terminated at the election
of the Executive pursuant to Section 4.3, the Company shall, through the
last day of his actual employment by the Company, continue to pay to the
Executive his base salary as in effect on the date of notice of
termination and continue to provide to the Executive the fringe benefits
and allowances available to him under Sections 3.5, 3.7 and 3.8 hereof,
as of the last day of actual employment. In addition, in the event the
Executive's employment is terminated at the election of the Executive
pursuant to Section 4.3, subject to the Executive's compliance with the
provisions of Sections 6 and 7 below and execution of a general release
of claims against the Company and its affiliates in the form provided by
the Company, the Executive shall be entitled to receive a pro rata share
of the performance bonus referenced in Section 3.2, covering the period
from the beginning of the year up to the date of termination.
5.2 TERMINATION FOR DEATH OR DISABILITY. If the Executive's
employment is terminated due to death or Disability pursuant to Section
4.2, the Company shall continue to pay to the estate of the Executive or
to the Executive, as the case may be, for a period of 90 days after
termination of employment due to death or Disability, the Executive's
base salary as in effect on the date of termination.
5.3 TERMINATION AT THE ELECTION OF COMPANY (WITHOUT CAUSE). If the
Executive's employment is terminated at the election of the Company
pursuant to Section 4.3, the Company shall, through the last day of his
actual employment by the Company, continue to pay the Executive his base
salary as in effect on the date of notice of termination and continue to
provide the Executive the fringe benefits and allowances provided by
Sections 3.5, 3.7 and 3.8 hereof, as of the last day of actual
employment. In addition, subject to the Executive's compliance with the
provisions of Sections 6 and 7 below and execution of a general release
of claims against the Company and its affiliates in the form provided by
the Company, the Executive shall be entitled to: (i) receive a pro rata
share of the performance bonus referenced in Section 3.2, covering the
period from the beginning of the year up to the date of termination; and
(ii) receive the unpaid amount of the retention bonus to which he would
otherwise be entitled under Section 3.3, which amount shall be payable
on the payment date specified in Section 3.3. Additionally, option
vesting shall be accelerated so that as of the termination date, all
remaining unvested options granted at each strike price shall vest. The
Executive shall have one year after the termination date to exercise the
vested options. If this paragraph conflicts with any applicable Stock
Option Agreement, this paragraph shall control.
5.4 COBRA COSTS. If the Executive's employment with the Company is
(i) terminated after the 60th day following the Closing Date for any
reason except termination by the Company for Cause pursuant to Section
4.1 or (ii) terminated by the Company without Cause at any time after
the Closing Date pursuant to Section 4.3, the
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Company shall reimburse the Executive for the cost of COBRA insurance
premiums to continue the Executive's group health coverage for a period
of 12 months following termination of employment.
5.5 SURVIVAL. The provisions of Sections 3.3, 5.2, 5.3, and 5.4
shall survive the expiration or termination of this Agreement under the
circumstances specified in those Sections for the periods specified in
such Sections. Sections 6 and 7 shall survive the termination of this
Agreement.
6. NON-COMPETE.
(a) During the Executive's active employment and for a
period of six months following the Executive's termination of
employment, the Executive will not:
(i) be a partner, stockholder (other than as the holder
of not more than one percent (1%) of the total outstanding stock
of), officer, employee, consultant, director, joint venture,
investor or lender of or to America Online, Inc., Microsoft
Network, AT&T WorldNet, EarthLink Network, Inc., or any
corporation or other entity acquiring any of the foregoing or
involved in providing Internet Access services that compete
directly with Prodigy; or
(ii) directly or indirectly recruit, solicit or induce,
or attempt to induce, any employee or employees of the Company
to terminate their employment with, or otherwise cease their
relationship with the Company; or
(iii) directly or indirectly solicit, divert or take
away, or attempt to divert or to take away, the business or
patronage of any of the clients, customers or accounts, or
prospective clients, customers or accounts, of the Company,
including but not limited to those clients, customers or
accounts which were contacted, solicited or served by the
Executive while employed by the Company.
(b) If any restriction set forth in this Section 6 is found
by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of
activities or in too broad a geographic area, it shall be interpreted to
extend only over the maximum period of time, range of activities or
geographic area as to which it may be enforceable.
(c) The restrictions contained in this Section 6 are
necessary for the protection of the business and goodwill of the Company
and are considered by the Executive to be reasonable for such purposes.
The Executive agrees that any breach of this Section 6 will cause the
Company substantial and irrevocable damage and therefore, in the event
of any such breach, in addition to such other remedies which may be
available, the Company shall have the right to seek specific performance
and injunctive relief.
(d) Unless the context otherwise requires, all references in
this Section 6 and in Section 7 below to the "Company" shall include all
current or future subsidiaries or affiliates of the Company.
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7. PROPRIETARY INFORMATION AND DEVELOPMENTS.
7.1 PROPRIETARY INFORMATION.
(a) The Executive agrees that all information and know-how
related to the activities of the Company, whether or not in writing, of
a private, secret or confidential nature concerning the Company's
business or financial affairs (collectively, "Proprietary Information")
is and shall be the exclusive property of the Company. By way of
illustration, but not limitation, Proprietary Information may include
inventions, products, processes, methods, techniques, formulas,
compositions, compounds, projects, developments, plans, research data,
clinical data, financial data, personnel data, computer programs, and
customer and supplier lists. The Executive will not disclose any
Proprietary Information to others outside the Company or use the same
for any unauthorized purposes without written approval by an officer of
the Company, either during or after his employment, unless and until
such Proprietary Information has become public knowledge without fault
by the Executive.
(b) The Executive agrees that all files, letters, memoranda,
reports, records, data, sketches, drawings, laboratory notebooks,
program listings, or other written, photographic, or other tangible
material containing Proprietary Information, whether created by the
Executive or others, which shall come into his custody or possession,
shall be and are the exclusive property of the Company to be used by the
Executive only in the performance of his duties for the Company.
(c) The Executive agrees that his obligation not to disclose
or use information, know-how and records of the types set forth in
paragraphs (a) and (b) above, also extends to such types of information,
know-how, records and tangible property of customers of the Company or
suppliers to the Company or other third parties who may have disclosed
or entrusted the same to the Company or to the Executive in the course
of the Company's business.
7.2 DEVELOPMENTS.
(a) The Executive will make full and prompt disclosure to
the Company of all inventions, improvements, discoveries, methods,
developments, software, and works of authorship, related to the
activities of the Company, whether patentable or not, which are created,
made, conceived or reduced to practice by the Executive or under his
direction or jointly with others during his employment by the company,
whether or not during normal working hours or on the premises of the
Company (all of which are collectively referred to in this Agreement as
"Development").
(b) The Executive agrees to assign and does hereby assign to
the Company (or any person or entity designated by the Company) all his
right, title and interest in and to all Developments and all related
patents, patent applications, copyrights and copyright applications. The
Executive also acknowledges that all work fixed in a tangible medium of
expression shall be deemed a work made for hire under the U.S. Copyright
Act such that the work is owned by the Company at the moment of
creation.
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(c) The Executive agrees to cooperate fully with the
Company, both during and after his employment with the Company, with
respect to the procurement, maintenance and enforcement of copyrights
and patents (both in the United States and foreign countries) relating
to Developments. The Executive shall sign all papers, including, without
limitation, copyright applications, patent applications, declarations,
oaths, formal assignments, assignment of priority rights, and powers of
attorney, which the Company may deem necessary or desirable in order to
protect its rights and interest in any Development.
7.3 OTHER AGREEMENTS. The Executive hereby represents that his
performance of all the terms of this Agreement and as an employee of the
Company does not and will not breach the terms of any agreement with any
previous employer or other party to refrain from using or disclosing any
trade secret, confidential or proprietary information, knowledge or data
acquired by him in confidence or in trust prior to his employment with
the Company or to refrain from competing, directly or indirectly, with
the business of such previous employer or any other party.
8. NOTICES.
All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon personal delivery or upon sending, by
registered or certified mail, postage prepaid, addressed to the other party at
the address shown above, or at such other address or addresses as either party
shall designate to the other in accordance with this Section 8.
9. PRONOUNS.
Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular forms of nouns and pronouns shall include the plural, and vice versa.
10. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether written or oral,
relating to the subject matter of this Agreement including, without limitation,
the Executive's prior Employment Agreement with the Company dated September 14,
1998, except that the Agreement Regarding Confidential Information and the
Prodigy Business Conduct Guidelines shall remain in full force and effect.
11. AMENDMENT.
This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Executive.
12. GOVERNING LAW.
This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of New York in the United States, without
reference to conflict of law principles.
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13. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of both
parties and their respective successors and assigns, including any corporation
with which or into which the Company may be merged or which may succeed to its
assets or business; PROVIDED, HOWEVER, that the obligations of the Executive are
personal and shall not be assigned by him.
14. MISCELLANEOUS.
14.1 No delay or omission by either the Company or the Executive in
exercising any right under this Agreement shall operate as a waiver of
that or any other right. A waiver or consent given by either the Company
or the Executive on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on
any other occasion.
14.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the
scope or substances of any section of this Agreement.
14.3 In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected
or impaired thereby.
14.4 Any payments to the Executive pursuant to the terms of this
Agreement shall be reduced by such amounts as are required to be
withheld with respect thereto under all present and future federal,
state and local tax laws and regulations, and other laws and
regulations.
IN WITNESS THEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
PRODIGY COMMUNICATIONS CORPORATION
By: /s/ Illegible
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Title:
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EXECUTIVE
/s/ Xxxxx Xxxxxxxxxxxx
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Xxxxxxxxxxxx, Xxxxx 70101 00000895 12/14/1996 1996NQ 93,750 $4.0000 0 31,250 0 62,600 93,750
00000696 12/14/1996 1996NQ 31,250 $6.6000 0 10,416 0 20,834 31,250
Account Trachtenberg. Xxxxx X. 125,000 0 41,666 0 83,334 125,000
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Xxxxxxxxxxxx, Xxxxx 00000 31,250 62,600 62,500 62,500 31,250
10,417 20,833 20,833 20,833 10,417
Account Trachtenberg. Xxxxx X. 41,667 124,999 83,333 124,999 41,667
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