Exhibit 10.12
EMPLOYMENT AGREEMENT
This agreement made and entered into as of this 9th day of March l999, by
and between:
ZipLink, Inc., a Delaware corporation with offices at 000
Xxxxxxxxxx Xxxxxx, Tower One, Fifth Floor, Lowell
Massachusetts 01851 (the "Company"); and
Xxxxxxxxxxx X. Xxxxxxx, residing at 00 Xxxxxxx Xxxx, Xxxxx,
Xxxxxxxxxxxxx 00000 (the "Employee").
WITNESSETH:
WHEREAS, the Company wishes to employ the Employee, and the Employee wishes
to accept such employment; and
WHEREAS, the Company and the Employee wish to set forth the terms and
conditions of such employment.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration receipt of which is acknowledged and the mutual promises
herein made, the parties hereto hereby agree as follows:
1. EMPLOYMENT
(A) EMPLOYMENT. The Company hereby agrees to employ Employee, and Employee
hereby accepts and agrees to said employment, in accordance with the terms of
this Agreement.
(B) PRIOR AGREEMENTS. Effective upon an initial public offering (an "IPO")
of the Company's common stock, this Agreement will supersede all previous
agreements between the Company and Employee concerning terms and conditions of
the employment of Employee by the Company (including those agreements originally
entered into by and between ZipLink, LLC (formerly known as ZipCall, LLC), a
Connecticut limited liability company), and all such previous agreements are
hereby canceled by mutual consent. No such cancellation shall effect any stock
option agreements or grants which options and agreements shall remain in full
force and effect.
2. POSITION AND DUTIES
(A) POSITION. During his employment hereunder, Employee shall have such
title and executive and managerial level duties as the Company may from time to
time designate. Employee shall initially serve as the President of the Company,
and, in such capacity, Employee shall as, when, and to the extent delegated to
him by the Board of Directors of the Company, have responsibility for the
operations of the Company.
(B) DUTY TO PERFORM SERVICES. Employee shall devote himself on a
"full-time" and exclusive basis to the business and affairs of the Company. He
shall use his best efforts in the rendition of his services to and on behalf of
the Company hereunder. Employee
will comply with all policies, standards, and regulations established by the
Company from time to time.
3. EMPLOYMENT TERM
The term of Employee's employment under this Agreement shall begin on the
date first above written and shall continue until December 31, 2001 unless
Employee's employment is terminated earlier as provided in Section 9 of this
Agreement (the "Employment Term").
4. TRANSITIONAL EMPLOYMENT
In the event that the Company sells all or a portion of its assets or stock
in a transaction in which the purchaser requires that the Employee become an
employee of the purchaser, Employee will accept such employment for a period of
up to six months so long as the terms and conditions of such employment are
reasonable in terms of location, job description, and compensation.
5. COMPENSATION
(A) BASE COMPENSATION. As "Base Compensation" for services rendered by
Employee to the Company while employed hereunder, the Company will pay Employee
$150,000 per annum. Base Compensation shall be paid by regular periodic payments
as shall be in accordance with the Company's salary payment procedures as from
time to time in effect. Base Salary shall be subject to withholding and
deductions for all applicable taxes. Accrual and payment of Base Salary shall
not be commenced until completion of the IPO.
(B) BONUSES. In addition to Base Compensation, the Company may from time to
time award bonuses to Employee as additional compensation for services rendered.
The awarding, amount and terms of payment of any such bonuses shall remain
within the sole and exclusive discretion of the Company.
(C) WITHHOLDING. If and to the extent required by the Internal Revenue
Code, Base Salary and bonuses shall be subject to withholding and deductions for
all applicable taxes.
(D) BENEFITS. Employee shall be entitled to participate in and under any
and all incentive compensation, retirement, pension, profit sharing, insurance,
disability, medical expense, hospitalization or other plans now existing or
hereafter adopted through which the Company may provide benefits to or for its
employees generally. The foregoing shall not be deemed to guarantee awards to
Employee in any of the aforesaid plans where the granting of awards is
discretionary, but rather shall be deemed to provide only that Employee shall be
eligible for consideration as a recipient of such awards.
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(E) MINIMUM BENEFITS. To the extent not provided through benefit programs
described in Subsection (c) above, the Company shall provide to Employee at the
Company's expense:
(1) Health insurance covering Employee and his immediate family; and
(2) Life insurance with a death benefit of at least to two times Base
Compensation covering Employee and payable to Employee's designated
beneficiary.
6. VACATIONS; SICK OR PERSONAL DAYS; HOLIDAYS.
(A) VACATION. Employee shall be entitled to 4 weeks of vacation during each
calendar year of the Employment Term (prorated for any partial calendar years).
(B) SICK OR PERSONAL DAYS. Employee shall be entitled to a reasonable
number of sick or personal days, without loss of pay, on an "as needed" basis.
(C) HOLIDAYS. Employee shall be entitled to such holidays as are
established by the Company for all Employees.
7. DISABILITY
(A) SALARY CONTINUATION. If Employee becomes disabled at any time during
the Employment Term, he shall continue thereafter to receive his full Base
Salary in accordance with the benefit policies of the Company at such time. Any
disability benefits paid to Employee under insurance paid for by the Company
(either as owner or on Employee's behalf) shall be deemed to have come from the
Company in satisfaction of its obligations under this Subsection. Benefits
payable to Employee under individual disability policies owned and paid for by
Employee shall in no way limit or be deemed to be in lieu of the disability
compensation or insurance coverage hereinabove described.
(B) DEFINITION OF DISABILITY. For all purposes of this Agreement, the term
"disability" shall mean temporary or permanent incapacity, physical or mental,
which results in Employee's being unable to perform the requirements of his
position hereunder on a full-time basis. Disability shall be established by
medical proof satisfactory to a physician appointed by the Company, and his
decision as to the competence of such medical proof shall be binding upon
Employee, the Company and all other interested parties. In any event, if
Employee has qualified to receive disability benefits for total and permanent
disability under the Social Security Act, he shall be deemed to be disabled for
all purposes of this Agreement. All disabilities commencing during any 180 day
consecutive period shall be considered a single disability hereunder.
8. EXPENSES
The Company shall pay directly, or shall reimburse Employee for, the
following expenses:
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(1) The cost of maintenance, operation, and insurance for one
automobile used by Employee in the performance of his duties under this
Agreement (subject to such limits as may be established from time to time
by the Company, provided, that such limits shall not be less than $500.00
per month); and
(2) Any and all other necessary and ordinary expenses incurred by
Employee in the performance of Employee's duties hereunder, provided that
Employee has received the Company's prior written authorization for the
incurrence of such other expenses.
Any reimbursement shall be made in accordance with the expense documentation and
payment policies adopted from time to time by the Company for executive level
employees.
9. TERMINATION
(A) TERMINATION BY COMPANY. The Company may terminate the employment of
Employee hereunder, effective immediately upon written notice of termination to
Employee specifying the cause for such termination upon the occurrence of:
(1) A dereliction or breach by Employee of any of his duties,
covenants, agreements, or obligations contained herein, which dereliction
or breach continues unremedied for 14 days following notice to Employee of
such breach,
(2) Employee's engaging in any action: (i) involving dishonest,
fraudulent, or criminal conduct, (ii) in violation of Company policies,
standards, and/or regulations, or (iii) which could allow any other
employee of the Company to institute any action against the Company based
on a claim or claims of discrimination, harassment, or violation of civil
or human rights;
(3) The affirmative disregard by Employee of specific and material
(i.e., not involving merely day-to-day operations of the Company)
management directives which had been the subject of discussion and review
by the Board of Directors of the Company;
(4) Employee's engaging in any conduct or action, whether or not also
described in another Paragraph of this Subsection, which has caused or
which, if not checked, could have potentially caused financial harm to the
Company except for actions or conduct which employee believed in good faith
were in the best interests of the Company ;
(5) The failure by the Employee to comply with any rehabilitation
program after the Company determines that his capacity to perform his
duties hereunder has been impaired as a result of drug or alcohol abuse; or
(6) The determination by the Company, in its sole discretion, that the
Employee has engaged in any other conduct which is detrimental to the best
interests of the Company or that the Employee's performance is not
otherwise
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satisfactory to the Company or that the Company is no longer in need of the
Employee's services.
(B) TERMINATION BY REASON OF DEATH OR DISABILITY. Employee's employment
hereunder shall terminate immediately upon the death of Employee or upon the
passage of 180 days of disability with respect to Employee during any period of
360 consecutive days.
(C) EFFECT OF TERMINATION. Upon the termination of Employee's employment
hereunder, the Employee shall be entitled to receive any accrued and unpaid Base
Salary with respect to the period up to the effective date of such termination.
Upon a termination of the employment of the Employee by the Company pursuant to
Section 9(a)(6), and which is not described in any of the other Paragraphs of
Section 9(a), Employer's obligation to pay Base Compensation to Employee shall
continue during the one year period following termination of Employment;
provided, however, that Employer's obligation to so pay Base Compensation to
Employee shall immediately cease in the event that Employee breaches any of his
duties, covenants, agreements, or obligations contained in Section 10 but such
termination of payment of Base Salary shall not release Employee of his
obligations under Section 10 (b), (c), (d) or (e).
10. RESTRICTIONS ON CERTAIN BUSINESS ACTIVITIES
(A) EXCLUSIVITY. Employee shall not, at any time while employed by the
Company (other than as an employee of the Company and within the scope of his
duties to the Company and in furtherance of the business and affairs of the
Company), directly or indirectly, for his own account or for the account of
others, as an owner, officer, director, shareholder, partner, employee, agent,
advisor, consultant, manager, licensor, or in any other capacity, engage in or
be concerned with any commercial duties or pursuits whatsoever; provided
however, that: (i) Employee shall not be prevented from investing in stocks,
bonds, securities, real estate, commodities, or other forms of investment for
his own account so long as such investment will not require the rendition of
services on his part and (ii) Employee may serve on the Board of Directors
and/or as an officer of and/or provide services on a voluntary basis to any
not-for-profit organization which is not competitive with the Company and
provided such service does not materially interfere with his duties to the
Company.
(B) NON-COMPETITION. Employee shall not, at any time while employed by the
Company (other than as an employee of the Company and within the scope of his
duties to the Company and in furtherance of the business and affairs of the
Company), and for a period of one year following the date upon which Employee
ceases to be employed by the Company for any reason (the "Termination Date"),
directly or indirectly, for his own account or for the account of others, as an
owner, officer, director, shareholder, partner, member, employee, agent,
advisor, consultant, manager, licensor, or in any other capacity, engage, or be
associated with, in any Restricted Field within the Restricted Area. For
purposes of this Agreement:
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(1) Restricted Field shall mean the production, processing, sale,
distribution, or providing of any Restricted Service.
(2) Restricted Service shall mean any services or goods produced,
sold, processed, distributed, or provided by the Company during the one
year period ending on the Termination Date and which accounted for more
than 10% of the Company's revenues for such year or specifically identified
and planned by the Company during the one year period ending on the
Termination Date and which was expected to account for more than 10% of the
Company's revenues for such one year period (or, if there has not been a
Termination Date, during the one year period immediately preceding the date
with respect to which Employee's compliance with this Section is then being
determined). As of the date hereof, the Restricted Services shall mean the
provision of Internet access services, connectivity and other related
services including, without limitation, wholesale Internet access services
for Internet appliances to and other Internet service providers; and
(3) Restricted Area shall mean all geographic areas where the Company
has a point of presence, the United States of America and any other
territory in which the Company is hereafter doing business.
Employee shall not be deemed to have breached his covenant hereunder by
accepting employment after the Termination Date with an entity engaged in a
Restricted Field in a Restricted Area if: (i) Employee is employed only by a
division, subsidiary, or affiliate of such entity, which division, subsidiary,
or affiliate is not itself, directly or indirectly, engaged in any Restricted
Field in any Restricted Area, (ii) Employee does not provide any services,
either directly or indirectly, to any division, subsidiary, or affiliate of such
entity which is, directly or indirectly, engaged in any Restricted Field in any
Restricted Area, and (iii) such entity acknowledges in writing that it is aware
of this Agreement and that it will not cause or permit Employee to breach any of
the terms of this Agreement. Furthermore, Employee shall not be deemed to have
breached his covenant hereunder solely by reason of owning an equity interest of
less than 5% of a publicly held corporation, partnership, or other entity.
(C) NON-SOLICITATION OF CUSTOMERS. Employee shall not, at any time while
employed by the Company (other than as an employee of the Company and within the
scope of his duties to the Company and in furtherance of the business and
affairs of the Company), and for a period of one year following the Termination
Date, directly or indirectly, for his own account or for the account of others,
as an owner, officer, director, shareholder, partner, employee, agent, advisor,
consultant, manager, licensor, or in any other capacity, attempt to or actually
solicit or otherwise transact business in any manner with any Restricted Party
with a view towards providing or selling Restricted Services to or for the
benefit of any such Restricted Party. For the foregoing purposes, "Restricted
Party" shall mean any person or entity to or for the benefit of whom the Company
shall have provided or sold Restricted Services, or shall have made a
presentation or other specific contact with a view towards any such provision or
sale, in either case at any time within one year prior to the Termination Date.
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(D) NON-SOLICITATION OF EMPLOYEES. Employee shall not, at any time while
employed by the Company, and for a period of one year following the Termination
Date: (i) hire or solicit, or cause or authorize, directly or indirectly, to be
hired or solicited for employment, as an employee, independent contractor,
consultant, or in any other capacity, any person who is, or was within one year
prior to or after the Termination Date, an employee, independent contractor, or
consultant of the Company or (ii) interfere in any way with the employment or
other relationship between the Company and any employee, independent contractor,
consultant, or other person.
(E) CONFIDENTIALITY AND NON-DISCLOSURE.
(1) CONFIDENTIALITY. Employee shall not, at any time while employed by
the Company (other than as an employee of the Company and within the scope
of his duties to the Company and in furtherance of the business and affairs
of the Company) and at all times subsequent to the Termination Date (under
any and all circumstances, without exception), disclose to any person or
entity other than the Company, or use for his own or any other purpose: (i)
any Confidential Information possessed by or pertaining to the Company or
(ii) any similar information belonging to a party other than the Company,
but to which Employee has had access by reason of his relationship with the
Company (including, without limitation, any information which is delivered
to the Company by persons or entities for whom the Company is providing
services or providing products).
(2) RECORDS. Employee shall not remove from the premises of the
Company any document, materials, or record (including, without limitation,
computerized records) containing any Confidential Information. Upon
termination of employment, Employee shall promptly deliver to the Company
all documents, materials, and records (including, without limitation,
computerized records) containing any Confidential Information which are in
Employee's possession, custody, or control.
(3) CONFIDENTIAL INFORMATION. For purposes of this Agreement,
Confidential Information shall mean trade secrets, confidential commercial
information, and any other information, knowledge, or data not generally
known to the public, possessed by or pertaining to the Company, including,
without limitation: (i) information about the Company's employees, (ii)
financial information concerning the Company, (iii) information about the
Company's products, including product designs or formulations, (iv)
information concerning the services provided by the Company, (v)
information concerning the Company's sources of supply, (vi) marketing
information, including advertising or promotional programs, sales
strategies or prospects, pricing or pricing strategies, and (vii)
information concerning the customers of the Company, including customer
lists, mailing lists, and customer requirements. Confidential Information
shall not include any information which becomes generally known to the
public other than as a result of any act or omission of Employee.
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(F) DISPARAGING STATEMENTS BY EMPLOYEE. Employee acknowledges that the
Company is in an intensely competitive business and that disparaging or
otherwise derogatory comments, writings or other communications made by an
employee or former employee would place the Company at a disadvantage, would do
damage, financial and otherwise, to the Company's business and would do the
Company irreparable harm. Therefore, Employee agrees that from and after the
date of this Agreement, except as may be required by law or the rules and
regulations of any governmental authority, Employee will not make, or cause to
be made, any statement, observation, opinion, or communication (whether oral or
written) that disparages the Company or any of its past or present officers,
directors, shareholders, or employees, whether concerning his separation from
employment, the Company's business, prospects, or finances, or otherwise.
Nothing in the foregoing shall limit the Employee's statements in any pleading,
deposition or hearing in any arbitration proceeding.
(G) ENFORCEMENT. Employee's undertakings and agreements contained in this
Section 10 are of a unique and valuable nature and would, if breached, result in
irreparable damage to the Company that would not be readily susceptible to
monetary valuation; and, accordingly, in the event of the actual or potential
breach of any such undertakings or agreements, the Company shall be fully
entitled to seek and obtain injunctive or other equitable relief in furtherance
of the enforcement thereof, in addition to damages and any other available legal
remedy.
(H) INDEMNITY. Employee hereby indemnifies the Company and agrees to hold
the Company harmless from and against any and all claims, losses, liabilities,
damages, obligations, costs and expenses (including attorneys' fees) which the
Company may incur in connection with, by reason of or related to the breach by
Employee of any of Employee's undertakings or agreements contained in this
Section 10.
(I) CONSENT TO JURISDICTION. Employee hereby irrevocably submits to the IN
PERSONAM jurisdiction of any Connecticut State Court or Federal Court sitting in
Connecticut and any appellate court thereof in any action or proceeding arising
out of or relating to this Section 10, and Employee hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such Connecticut State Court or in such Federal Court. Employee
hereby irrevocably waives the defense of an inconvenient forum to the
maintenance of any such action or proceeding. Employee hereby irrevocably
consents to service of process by certified mail at his address set forth on the
first page hereof. Employee agrees that a non-appealable final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(J) SEVERABILITY. Employee agrees that the restrictions and limitations
established in this Section 10 shall apply and be enforceable to the fullest
extent allowed by law and shall under no circumstances be terminated in full in
the event that any portion of such limitations or restrictions exceed applicable
law. In the event any court of competent jurisdiction determines that any of the
provisions hereof exceed any applicable geographical, temporal, or other legal
or equitable limitations or restrictions, then such court is hereby authorized
and requested to "blue pencil" or otherwise reform the
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applicable limitations and restrictions, and this Agreement shall thereupon be
deemed to be reformed, only to the minimum extent necessary to meet such legal
or equitable limitations and restrictions. The illegality, invalidity or
unenforceability of any term or provision of this Agreement shall have no effect
on any other term or provision of this Agreement.
11. MISCELLANEOUS
(A) NOTICES. Any notice, request, acknowledgment, consent, or other
communication which any party hereto is required or permitted to give to another
party shall be in writing and shall be delivered personally, sent by registered
or certified mail, return receipt requested, or sent by a recognized overnight
delivery service, in any such case to the recipient at his or its address first
stated above or at such other address of which he or it shall have given the
other party or parties due notice hereunder. Any such notice shall be deemed to
have been delivered, given, and received for all purposes as of the date so
delivered.
(B) WAIVER. The failure of either party hereto to insist in any one or more
instances upon the performance of any of the terms and conditions of this
Agreement shall not be construed as a waiver or relinquishment of any right
granted hereunder, or of the future performance of any such term or condition.
(C) AMENDMENT. This Agreement may not be amended, modified or altered in
any manner, except pursuant to the terms of a written instrument signed by each
of the parties hereto.
(D) ASSIGNMENT. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective permitted assigns and
successors by operation of law. Neither this Agreement nor any benefits
hereunder may be assigned by Employee without the express prior written consent
of the Company. This Agreement may be assigned, transferred or conveyed by the
Company to a person or entity that acquires all or substantially all of the
business of the Company (whether such acquisition is by way of acquisition or
assets, acquisition of stock, merger, consolidation or otherwise).
(E) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Connecticut without giving any
effect to any choice or conflict of law provision or rule (whether of the State
of Connecticut or of any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Connecticut.
(F) ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties hereto with respect to the subject matter hereof and supersedes any
prior understandings or agreements among the parties, whether written or oral,
to the extent related to the subject matter hereof.
(G) HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
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(H) USAGE. In construing this Agreement, feminine or neuter pronouns shall
be substituted for those of the masculine form, and the plural for the singular,
and vice versa, in any case in which the context may require. The capitalized
terms used in this Agreement shall have the meaning first applied to their first
usage in this Agreement unless otherwise indicated.
(I) ARBITRATION. Other than seeking a temporary restraining order or
permanent injunction to enforce your obligations under Section 10 hereof, any
and all disputes in connection with this contract or related to or arising out
of your employment with the Company shall be submitted to binding arbitration in
Hartford, Connecticut before a single arbitrator under the rules of the American
Arbitration Association. Any award or judgment by the Arbitrator shall be final
and binding upon the parties and may be entered in any court of competition
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
and as of the date first above written:
ZIPLINK, INC.
By:
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Its:
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Xxxxxxxxxxx X. Xxxxxxx
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