Exhibit 10.23
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 15th day of December,
1999, by and between Xxxxxx XxXxxxx ("Employee"), XX.Xxx Construction Corp., a
Delaware corporation and any of its subsidiaries and affiliates as may employ
Employee from time to time (collectively, the "Company").
WITNESSETH:
WHEREAS, Employee and the Company deem it to be in their respective
best interests to enter into an agreement providing for the Company's employment
of Employee pursuant to the terms herein stated;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, it is hereby agreed as follows:
1. EFFECTIVE DATE. This Agreement shall be effective as of the date
hereof, which date shall be referred to herein as the "Effective Date."
1a. GUARANTEE OF THE COMPANY'S OBLIGATION. XX.Xxx Corp., a Delaware
corporation, does hereby agree to guarantee each of the Company's obligations
hereunder.
2. POSITION AND DUTIES.
(a) The Company hereby agrees to employ Employee and Employee
hereby agrees to enter into employment as an officer of the Company for the
"Term of Employment" (as defined in Section 6). In this capacity, Employee shall
devote his best efforts and his full business time and attention to the
performance of the services customarily incident to such position and to
achieving objectives specified by the Chief Executive Officer (or, if at any
time the Company does not have a Chief Executive Officer, the Board of Directors
of XX.Xxx Holdings, Limited ("Holdings")) (in either case, the "CEO") of the
Company or his delegate which may include services for one or more subsidiaries
or affiliates of the Company. Employee shall follow the reasonable and lawful
instructions of the CEO or such other person as the CEO may designate from time
to time.
(b) Employee shall devote his full business time and attention
to such duties, except for sick leave, reasonable vacations, and excused leaves
of absence as more particularly provided herein. Employee shall use his
reasonable best efforts during the Term of Employment to protect, encourage and
promote the interests of the Company.
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay to Employee during the
Term of Employment a minimum salary at the rate of one hundred and eighty
thousand dollars ($180,000) per calendar year, which shall be payable in
accordance with the Company's normal
payroll procedures. Employee's annual salary as set forth above shall be
referred to hereinafter as "Base Salary."
(b) BONUS COMPENSATION. In addition to the Base Salary, for
each fiscal year of the Company, or portion thereof, during the Term of
Employment, Employee shall be eligible to participate in a discretionary bonus
compensation program pursuant to which Employee may receive a performance-based
bonus (the "Bonus Compensation") based on reasonable and clearly identified and
communicated performance criteria in an amount, if any, as determined by the
Company in its sole discretion; provided, however, that the maximum amount of
Bonus Compensation that may be payable to Employee with respect to any full
calendar year shall not exceed 100% of Employee's Base Salary for such year.
4. BENEFITS. During the Term of Employment:
(a) Employee shall be eligible to participate in the health
and medical insurance programs maintained by the Company and any other fringe
benefit programs (including any 401(k) savings plan) made available to other
comparable employees of the Company from time to time, and Employee shall be
entitled to receive such other fringe benefits as may be granted to him from
time to time by the Company. The Company agrees that such benefits shall be
reasonable and competitive. Prior to the time Employee first becomes eligible
for health insurance under a plan or program maintained by the Company, the
Company shall pay Employee an additional amount as of the first day of each
calendar month equal to the actual monthly cost to Employee of any COBRA health
care continuation coverage, provided that Employee provides the Company with any
documentation related to such COBRA continuation coverage requested by the
Company in accordance with its applicable policies. The Company shall not make
any such additional payments to Employee after the time Employee first becomes
eligible for health insurance under a plan or program maintained by the Company
unless otherwise determined by the Company in its sole discretion. Medical
insurance provided under any Company plan or program shall waive any limitations
on benefits relating to any pre-existing conditions of Employee and any covered
dependents to the extent such pre-existing conditions were waived under the
applicable medical plans of Xxxx Industries, Inc.
(b) Employee shall be allowed two weeks of annual paid
vacation and leaves of absence with pay in accordance with the vacation and
leave of absence policies applicable to comparable employees of the Company.
(c) The Company shall reimburse Employee for reasonable
business expenses incurred in performing Employee's duties and promoting the
business of the Company following presentation of documentation in accordance
with the Company's business expense reimbursement policies. The Company shall
reimburse Employee for such business expenses within a reasonable time period
after the receipt of such documentation. The Company shall pay Employee
reasonable moving expenses in accordance with the Company's applicable moving
expense reimbursement policies.
5. STOCK OPTIONS. Effective as of the Effective Date, Holdings shall
grant to Employee an option (the "Option") to purchase 200,000 shares of common
stock, par value $.01 per share ("Common Stock"), of Holdings. The Option shall
be granted pursuant to a written
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stock option plan of Holdings and shall be subject to the terms and conditions
set forth in a written stock option agreement entered into between Employee and
Holdings. The option agreement shall contain substantially identical terms as
the stock option agreements of other comparable employees of the Company,
including without limitation, the terms set forth on Exhibit A hereto.
6. TERM; TERMINATION OF EMPLOYMENT. As used herein, the phrase "Term of
Employment" shall mean the period commencing on the Effective Date and, except
as otherwise specifically provided below, ending on December 15, 2002.
Notwithstanding the foregoing, the Term of Employment shall expire on the first
to occur of the following:
(a) TERMINATION BY THE COMPANY WITHOUT CAUSE. Except as
provided in Section 6(f), the Company may, at any time, terminate Employee's
employment for any reason other than Cause (as defined below) by giving Employee
at least two weeks prior written notice of the effective date of termination. In
the event Employee's employment hereunder is terminated by the Company other
than for Cause, the Company shall, in accordance with the Company's customary
payroll practices, continue to pay to Employee Base Salary during the period
commencing on the effective date of such termination and ending on the later of
(i) the first anniversary of the date of such termination, or (ii) December 15,
2001; provided, however, that in no event shall the Company pay Employee any
Base Salary following the earlier of (x) the last day of his then current Term
of Employment, or (y) the date Employee violates any of the covenants set forth
in Section 7 hereof.
(b) TERMINATION FOR CAUSE. The Company shall have the right to
terminate Employee's employment at any time for Cause by giving Employee written
notice of the effective date of termination (which effective date may, except as
otherwise provided below, be the date of such notice). If the Company terminates
Employee's employment for Cause, Employee shall be paid his unpaid Base Salary
through the date of termination and the Company shall have no further obligation
hereunder from and after the effective date of such termination and the Company
shall have all other rights and remedies available under this or any other
agreement and at law or in equity.
For purposes of this Agreement, "Cause" shall mean (i) any
form of dishonesty or criminal conduct connected with the employment of
Employee, (ii) the refusal of Employee to comply with the Company's written
instructions, policies or rules as approved or mandated by the Board of
Directors of the Company, (iii) Employee's continuing or repeated failure to
perform the duties as requested by the CEO pursuant to Section 2(a) after
Employee has been provided written notice and a reasonable opportunity to cure,
(iv) any material breach of Employee's obligations under this Agreement after
Employee has been provided written notice and a reasonable opportunity to cure,
(v) any violation of any Conflict of Interest Policy of the Company or (vi) the
Employee's conviction of, or plea of guilty or nolo contendere to, a felony. In
accordance with Section 11, all disputes concerning whether a particular
termination is for "Cause" shall be resolved through binding arbitration.
(c) TERMINATION ON ACCOUNT OF DEATH. In the event of
Employee's death while in the employ of the Company, his employment hereunder
shall terminate on the date of his death and Employee shall be paid his unpaid
Base Salary through the date of
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termination. In addition, any other benefits payable on behalf of Employee shall
be determined under the Company's insurance and other compensation and benefit
plans and programs then in effect in accordance with the terms of such programs.
(d) VOLUNTARY TERMINATION BY EMPLOYEE. In the event that
Employee's employment with the Company is voluntarily terminated by Employee for
any reason, Employee shall be paid his unpaid Base Salary through the date of
termination and the Company shall have no further obligation hereunder from and
after the effective date of termination and the Company shall have all other
rights and remedies available under this Agreement or any other agreement and at
law or in equity. Employee shall give the Company at least 30 days' advance
written notice of his intention to terminate his employment hereunder.
(e) TERMINATION ON ACCOUNT OF DISABILITY. To the extent not
prohibited by applicable law, if, as a result of Employee's incapacity due to
physical or mental illness (as determined in good faith by a physician
acceptable to the Company and Employee), Employee shall have been absent from
the full-time performance of his duties with the Company for 120 consecutive
days during any twelve (12) month period or if a physician acceptable to the
Company and Employee advises the Company that it is likely that Employee will be
unable to return to the full-time performance of his duties for 120 consecutive
days during the succeeding twelve (12) month period, his employment may be
terminated for "Disability." During any period that Employee fails to perform
his full-time duties with the Company as a result of incapacity due to physical
or mental illness, he shall continue to receive his Base Salary, Bonus
Compensation (if any) and other benefits provided hereunder, together with all
compensation payable to him under the Company's disability plan or program or
other similar plan during such period, until Employee's employment hereunder is
terminated pursuant to this Section 6(e). Thereafter, Employee's benefits shall
be determined under the Company's retirement, insurance and other compensation
and benefit plans and programs then in effect, in accordance with the terms of
such programs.
(f) NEW CEO. Notwithstanding any other provision of this
Section 6 to the contrary, Employee's employment with the Company may not be
terminated by the first Chief Executive Officer hired by the Company during the
Term of Employment without the approval of a majority of the members of the
Company's Board of Directors. Employee shall be entitled to severance upon any
termination of employment pursuant to this subsection (f) solely to the extent
provided by subsection (a), (b), (c), (d) or (e), whichever is applicable to
such termination.
7. CONFIDENTIAL INFORMATION, NON-SOLICITATION AND NON-COMPETITION.
(a) AFFILIATES. For purposes of this Section 7, the term
"Company" shall include the Company and any and all affiliates of the Company.
(b) CONFIDENTIAL INFORMATION.
(i) CONFIDENTIALITY. Employee acknowledges and agrees
that all trade secrets, information, lists of customers and vendors, product
planning information, marketing research, marketing plans and strategies,
pricing strategies, financial information,
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data of the Company or any other information proprietary to the Company
("Confidential Information") are valuable assets of the Company.
(ii) OWNERSHIP. Employee acknowledges and agrees that
all Confidential Information is and shall continue to be the exclusive property
of the Company, whether or not conceived, discovered or developed, in whole or
in part, by Employee and whether or not disclosed or entrusted to Employee in
connection with Employee's employment by the Company.
(iii) ACKNOWLEDGMENT OF RECEIPT OF CONFIDENTIAL
INFORMATION. Employee acknowledges that in the course of performing employment
services for the Company, Employee will have access to Confidential Information,
the ownership and confidential status of which are highly important to the
Company, and Employee agrees, in addition to the specified covenants contained
in this Agreement, to comply with all policies and procedures of the Company for
the protection of Confidential Information.
(iv) COVENANT OF NONDISCLOSURE. Except for disclosure
of Confidential Information to other employees or consultants of the Company on
a "need to know" basis in the course of performing employment services for the
Company, Employee agrees not to disclose Confidential Information, directly or
indirectly, under any circumstances or by any means, to any person or enterprise
without the prior written consent of the Company, which consent may be granted
or withheld by the company in its sole discretion, unless ordered to do so in
accordance with applicable law by an appropriate judicial official.
(v) COVENANT OF NONUSE. Employee agrees not to copy,
transmit, reproduce, summarize, quote or make any commercial or other use
whatsoever of Confidential Information, except as may be necessary to perform
the duties of employment for the Company.
(vi) SAFEGUARD OF CONFIDENTIAL INFORMATION. Employee
agrees to exercise the highest reasonable degree of care in safeguarding
Confidential Information against loss, theft or other inadvertent disclosure and
agrees generally to take all reasonable steps necessary to ensure the
maintenance of confidentiality.
(c) RETURN OF DOCUMENTS. Employee agrees that all originals
and copies of records, data, reports, documents, lists, plans, correspondence,
memoranda, notes and other materials related to or containing any Confidential
Information, in whatever form they exist, whether written, film, tape, computer
disk or other form of media, shall be the sole and exclusive property of the
Company and shall be returned promptly to the Company on the termination of this
Agreement.
(d) COVENANT NOT TO COMPETE.
(i) COVENANT. Employee covenants and agrees that for
the Restriction Period (defined in Section 7(d)(ii)), Employee shall not:
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(A) Directly or indirectly in any manner or
capacity (e.g., as an advisor, principal, agent, partner, officer, director,
stockholder, employee, member of any association or otherwise) without in each
instance obtaining prior written consent of the Company, which consent may be
granted or withheld by the Company in its sole discretion, engage, in, work for,
consult provide advice or assistance or otherwise participate within or with
respect to North America, in the business of providing dark fiber, conduit and
bandwidth on long haul fiber optic network telecommunicating systems, or in any
other telecommunications business which may be in competition with the business
conducted by the Company on the date of this Agreement or commenced at any time
during the Restriction Period or the subject of any agreement, plan or proposal
approved by the Board of the Directors of Holdings or the Board of Directors of
any affiliate of Holdings during such period; provided, however, that Employee
may own up to two percent (2%) of the outstanding shares or other equity
securities of any enterprise that is a reporting company under the Securities
Exchange Act of 1934, as amended. Employee further agrees that during the
Restriction Period he will not assist or encourage any other person in carrying
out any activity that would be prohibited by this Section 7(d) if such activity
were carried out by Employee.
(B) For the benefit of Employee or any other
person or enterprise (1) solicit any business whatsoever from any vendor or
customer of the business conducted by the Company, (2) induce or cause any
vendor to cease providing or selling any service or product to the Company or to
terminate or change such vendor's business relationship with the Company in any
manner or (3) induce or cause any customer to cease purchasing any product or
service from the Company or to terminate or change such customer's relationship
with the Company in any manner.
(C) For the benefit of Employee or any other
person or enterprise (1) induce or solicit any person who is then employed by
the Company, or has been employed by the Company at any time during the one-year
period preceding such inducement or solicitation, to leave that person's
employment or other position with the Company or to accept any other employment
or position or (2) otherwise assist any person or enterprise in hiring or
otherwise engaging such person.
(D) Violate any Conflict of Interest Policy
of the Company.
(ii) RESTRICTION PERIOD. The covenant set forth in
Section 7(d)(i) shall be binding on Employee for a period (the "Restriction
Period") commencing on the date of this Agreement and ending on the later of (A)
the first anniversary of the date Employee's employment with the Company
terminates for any reason or (B) the last day of the last month during which any
amounts are payable to Employee pursuant to Section 6(a) of this Agreement;
provided, however, that with respect to Section 7(d)(i)(D) only, the Restricted
Period shall commence on the date of this Agreement and shall end on the last
day of Employee's employment with the Company.
(e) REASONABLENESS OF RESTRICTIONS. Employee acknowledges and
confirms that the agreements, acknowledgements and covenants set forth in this
Section 7: (i) do not impose unreasonable restrictions or work a hardship upon
Employee, (ii) are essential to the willingness of the Company to employ
Employee, (iii) are necessary and fundamental to the
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protection of the business conducted by the Company and (iv) are reasonable as
to scope, duration and territory. Employee waives any and all defenses to the
enforcement of the covenants set forth in this Section 7. Employee specifically
acknowledges the payments under this Agreement and the Option granted to
Employee are being provided by the Company in consideration of the covenants set
forth in this Section 7 and that such payments and Option constitute good,
valuable and adequate consideration for such covenants. If it is determined by
any court of competent jurisdiction that any restriction in this Section 7 is
excessive in duration or scope or is unreasonable or unenforceable under any
applicable law, it is the intention of the parties that such restriction may be
modified or amended by the court to render it enforceable to the maximum extent
permitted by applicable law.
(f) NO RELEASE. Employee agrees that the termination of this
Agreement shall not release Employee from any obligations under this Section 7,
except those obligations set forth in Section 7(d)(i)(D).
8. MITIGATION OF DAMAGES. If, following the termination of Employee's
employment with the Company, Employee obtains other employment or receives
income from self-employment during the period in which the Company is otherwise
required to make payments to Employee pursuant to Section 6(a), then the amount
of any payments required to be made by the Company to Employee in any calendar
year (as pro-rated for any partial calendar year) in excess of the amount equal
to one-third of Employee's then-current Base Salary shall be reduced by 50% of
the amount of income Employee receives from such other employment or
self-employment.
9. TAXES. All payments to be made to Employee under this Agreement will
be subject to any applicable withholding of federal, state and local income and
employment taxes.
10. MISCELLANEOUS. This Agreement shall also be subject to the
following miscellaneous considerations:
(a) Employee and the Company each represent and warrant to the
other that he or it has the authorization, power and right to deliver, execute,
and fully perform his or its obligations under this Agreement in accordance with
its terms.
(b) This Agreement contains a complete statement of all the
arrangements between the parties with respect to Employee's employment by the
Company, this Agreement supersedes all prior and existing negotiations and
agreements between the parties concerning Employee's employment, and this
Agreement can only be changed or modified pursuant to a written instrument duly
executed by each of the parties hereto.
(c) If any provision of this Agreement or any portion thereof
is declared invalid, illegal, or incapable of being enforced by any court of
competent jurisdiction, the remainder of such provisions and all of the
remaining provisions of this Agreement shall continue in full force and effect.
(d) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, except to the extent
governed by federal law.
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(e) The Company may assign this Agreement to any direct or
indirect subsidiary or parent of the Company or joint venture in which the
Company has an interest, or any successor (whether by merger, consolidation,
spin-off, purchase or otherwise) to all or substantially all of the stock,
assets or business of the Company or any subsidiary or parent of the Company,
and this Agreement shall be binding upon and inure to the benefit of such
successors and assigns. Except as expressly provided herein, Employee may not
sell, transfer, assign, or pledge any of his rights or interests pursuant to
this Agreement.
(f) Any rights of Employee hereunder shall be in addition to
any rights Employee may otherwise have under benefit plans, agreements, or
arrangements of the Company to which he is a party or in which he is a
participant, including, but not limited to, any Company-sponsored employee
benefit plans.
(g) For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the named Employee at the address contained in the Company's
records concerning the Employee. All notices to the Company shall be directed to
the Secretary of the Company.
(h) Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
(i) Failure to insist upon strict compliance with any of the
terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.
(j) This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
11. RESOLUTION OF DISPUTES. Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration,
conducted in Wilmington, Delaware in accordance with the rules of the American
Arbitration Association governing employment disputes as then in effect. The
Company and Employee hereby agree that the arbitrator will not have the
authority to award punitive damages, damages for emotional distress or any other
damages that are not contractual in nature. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the
Company shall be entitled to seek a restraining order or injunction in any court
of competent jurisdiction to prevent any continuation of any violation of the
provisions of Section 7, and Employee consents that such restraining order or
injunction may be granted without the necessity of the Company's posting any
bond except to the extent otherwise required by applicable law. The fees and
expenses of the American Arbitration Association and the arbitrator shall be
borne by the Company.
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12. ATTORNEYS' FEES. If any suit or action is filed by any party to
enforce this Agreement or otherwise with respect to the subject matter of this
Agreement, each party shall be responsible to pay the attorneys fees and costs
incurred by such party in preparation or in prosecution or defense of such suit
or action and the court or adjudicator is not authorized to allocate attorneys
fees and costs between the parties or to one party.
13. MOVING EXPENSES. It shall be the Company's policy, in connection
with any relocation of Employee's primary residence at the Company's request, to
make a lump sum cash payment to Employee in an amount equal to two weeks Base
Salary and to reimburse Employee for reasonable out-of-pocket costs incurred in
connection with any such relocation up to a maximum amount established by the
Company. Such relocation expenses shall include (a) reasonable direct moving
costs, (b) the cost of temporary living arrangements for up to 45 days, and (c)
the cost of any utility or similar deposits up to a maximum of $1,000, but shall
not include any costs related to the purchase or sale of any primary residence
of Employee.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
EMPLOYEE COMPANY
XXXXXX XXXXXXX XX.XXX CONSTRUCTION CORP.
By: /s/ XXXXXX XXXXXXX By: /s/ XXXXXXX XXXXX
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Title: Title: Vice President
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Address:
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GUARANTOR
XX.XXX CORP.
By: /s/ XXXXXXX XXXXX
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Title: Authorized Signatory
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