EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made and entered into
by and between Interland, Inc., a Minnesota corporation having its principal
executive offices located at the business address of 000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (the "COMPANY"), and XXX XXXXXX, an
individual residing at 00 Xxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000
("EXECUTIVE"). Company and Executive enter into this Agreement as of the date
they each have signed it, but the Agreement shall be effective as of the date
established pursuant to Section 2.1, below.
WHEREAS, Company desires to employ Executive as the Senior Vice
President, and whereas the parties wish to establish certain terms and
conditions of such employment by entering into this Agreement; and
WHEREAS, Executive desires such employment with Company on the terms
and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereby agree as follows:
1. Employment; Regular Compensation. Company agrees to employ
Executive as Senior Vice President and Executive agrees to serve in such
capacity on the terms and conditions set forth in this Agreement. Company shall
pay Executive an initial base salary (the "BASE SALARY") as set forth in
Company's offer letter dated November 4, 2002 and attached hereto as EXHIBIT 1.
The Base Salary is expressed as an annual amount solely for reference purposes,
and shall be payable to Executive on a bi-weekly basis. In its sole discretion,
the Company may change Executive's compensation; provided, however, that the
Company may not reduce Executive's compensation unless the Company also reduces
the compensation of other, similarly situated executives.
2. Effective Date; Indefinite Term.
2.1 This Agreement shall be deemed in full force and
effect as of, and is conditioned upon, the closing of that certain Merger
Agreement and Plan of Reorganization dated December 11, 2002, by and among
Trellix Corporation, the Company, and Cheetah Acquisition Corporation, a
wholly-owned subsidiary of Interland.
2.2 This Agreement has an indefinite term, and
Executive's employment by Company hereunder may be terminated at will by either
party at any time, with or without Cause (as defined in Section 6.1, below) or
any reason, voluntary or involuntary, and with or without prior notice. Certain
provisions of this Agreement, however, as more fully set forth in Section 5,
below, provide for the payment of benefits to Executive upon the specified
circumstances of termination of Executive's employment with Company, and certain
other provisions, as more fully set forth below in Section 11, below, may
continue in effect beyond the date of such termination. Executive expressly
acknowledges and agrees that employment with Company is on an "at will" basis,
and that this Agreement does not provide a guarantee of continued employment,
notwithstanding any other provision in this Agreement.
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3. Duties. Executive shall report to Xxxx Xxxxxx, Chairman and
Chief Executive Officer, or such other individual as may be designated from time
to time by Xxxx Xxxxxx or the Board of Directors (the "BOARD"). Executive shall
faithfully and diligently perform all such acts and duties, and furnish such
services, as are assigned to Executive by Xxxx Xxxxxx, Chairman and Chief
Executive Officer, or such other individual as may be designated by Xxxx Xxxxxx
or the Board.
4. Efforts; Conflicts of Interest. During Executive's employment
by Company, Executive shall devote his full business time and efforts to Company
and its business during normal business hours, and shall safeguard and promote
its lawful interests. During Executive's employment by Company, Executive shall
not, either directly or indirectly, engage in or enter into any business or
perform any services for any other person, firm, association, or corporation
that conflicts with Executive's efforts to Company or with Company's business
interests, except for: (a) serving on the board of directors of any other entity
that is not in competition with Company (subject to Company's approval, which
shall not be unreasonably withheld or delayed); (b) activities approved in
writing in advance by Xxxx Xxxxxx or the Board, which approval shall not be
unreasonably withheld or delayed; or (c) passive investments in entities that do
not involve Executive providing any advice or services to the businesses in
which the investments are made, or which do not violate Company policy,
including without limitation any policy relating to conflicts of interest or
business ethics.
5. Benefits Upon Termination of Employment.
5.1 By Company for Cause or by Executive Without Good
Reason. If Executive's employment is terminated by Company for Cause or by
Executive Without Good Reason (as defined in Section 6.5, below), then Company's
obligation to pay compensation and benefits under this Agreement shall
immediately terminate, except that: (a) Company shall pay to Executive and, if
applicable, Executive's heirs, any earned but unpaid Base Salary through such
termination date; and (b) Company shall permit Executive to receive continuation
of the benefits as set forth in Section 5.5, below, to the extent applicable.
Under such circumstances, no further payments or benefits (except as otherwise
required by law) shall be provided to Executive. The terms "Cause" and "Without
Good Reason" shall have the meanings set forth in Section 6 below.
5.2 By Company for Nonperformance Due to Disability. If
Executive's employment is terminated by Company for Nonperformance Due to
Disability, then Company's obligation to pay compensation and benefits under
this Agreement shall immediately terminate, except that: (a) Company shall pay
to Executive and, if applicable, Executive's heirs, any earned but unpaid Base
Salary through such termination date; (b) Company shall provide Executive with
such other payments and benefits as may be permitted under the Company's short-
or long-term disability plans, to the extent applicable, and subject to the
terms and conditions of such plans, including without limitation any eligibility
requirements; and (c) Company shall permit Executive to receive continuation of
the benefits as set forth in Section 5.5, below, to the extent applicable. The
term "Nonperformance Due to Disability" shall have the meaning set forth in
Section 6 below.
5.3 By Company Other Than for Cause or by Executive for
Good Reason. If Executive's employment is terminated by Company other than for
Cause or by Executive for
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Good Reason (as defined in Section 6.3, below), then Company's obligation to pay
compensation and benefits under this Agreement shall immediately terminate,
except that: (a) Company shall pay to Executive and, if applicable, Executive's
heirs, any earned but unpaid Base Salary through such termination date; (b)
Company shall pay to Executive any earned but unpaid incentive compensation or
bonuses through the termination date, subject to the terms of the applicable
bonus plan, including without limitation any eligibility requirements or any
limitations on such payment under applicable law; (c) Company shall permit
Executive to receive continuation of the benefits as set forth in Section 5.5,
below, to the extent applicable; (d) Company shall make a single payment to
Executive of three thousand dollars ($3,000); and (e) Company shall pay to
Executive, as severance benefits and in addition to the foregoing, an amount
equal to 6 months of Base Salary (based upon the Base Salary in effect prior to
the effective date of termination and without giving effect to any reductions in
Base Salary taking place within thirty-two (32) days prior to the effective date
of termination) (the "SEVERANCE BENEFITS"). The Severance Benefits shall be paid
in a lump sum, as soon as practicable following such termination date, subject
to the following conditions: (x) Executive shall execute a written, complete
waiver and release of all claims relating to Company, or Executive's employment
by Company or any termination thereof, within any applicable consideration or
execution periods and in a form that is reasonably acceptable to Company; and
(y) subject to confirmation by Company that Executive does not later revoke such
waiver and release of claims within any revocation period required by applicable
law.
5.4 Death of Executive. In the event of Executive's
death, Executive's employment and all other obligations hereunder shall
automatically terminate and the Company's obligation to pay compensation and
benefits under this Agreement shall immediately terminate, except that Company
shall pay to Executive's estate: (a) Executive's Base Salary through the end of
the calendar month in which Executive's death occurs; (b) Executive's earned but
unpaid incentive compensation or bonuses through the date of Executive's death,
subject to the terms and conditions of the applicable bonus plan, including
without limitation any eligibility requirements or any limitations on such
payment under applicable law; and (c) Company shall permit Executive's heirs to
receive continuation of the benefits as set forth in Section 5.5, below, to the
extent applicable and allowed by law and subject to the terms of such plans.
5.5 Benefits Continuation. Upon termination of
Executive's employment for any reason, Company shall permit Executive and, if
applicable, Executive's family members, to continue to participate in Company's
employee benefits plans, to the extent required or allowed by law and subject to
the terms of such plans and applicable law.
6. Definitions.
6.1 "CAUSE" shall mean termination of Executive's
employment by Company for one or more of the following reasons: (a) Executive
has breached or threatens to breach a fiduciary duty owed to Company; (b)
Executive has engaged or threatens to engage in dishonesty, fraud, gross
negligence, willful malfeasance or other similar acts of misconduct in the
performance of Executive's duties during the course of Executive's employment;
(c) upon the willful and continued failure by Executive substantially to perform
Executive's duties with the Company [other than by reason of Nonperformance Due
to Disability (as defined below) or death]; (d) Executive has willfully violated
or threatens to violate Company policies (provided
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that hard or online copies of such policies have previously been made available
to Executive), or has willfully violated or threatens to violate any law, rule
or regulation (other than traffic violations or similar offenses) which result
in material injury to Company; or (e) Executive has violated or threatens to
violate the terms of Sections 4, 7, or 8 of this Agreement or the material terms
of the Confidentiality and Non-Competition Agreement, or any other material
breach of this Agreement and such material breach remains uncured (if capable of
being cured) fourteen (14) days after Executive's receipt of written notice
thereof. For purposes of the foregoing if Executive threatens to take any action
or omit to take any action and such threat is within the scope of any of the
foregoing provisions of this Section 6.1, such threat will not constitute
"Cause" unless (y) Company gives Executive written notice that it considers such
threat to constitute "Cause" and Executive fails to revoke the threat within
fourteen (14) days after receipt of such written notice or (z) Executive repeats
a threat that the Company has previously asked Executive to revoke under the
foregoing subsection (y).
6.2 "DISABILITY" shall have the meaning ascribed to such
term or its variations, such as "Disabled," in Company's long-term disability
plan, or in the absence of such plan, a meaning consistent with the definition
of permanent and total disability under Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended.
6.3 "GOOD REASON" shall mean that one or more of the
following events has occurred and, after giving Company written notice of the
occurrence and of Executive's intention to resign from employment and Company
not curing the event within thirty (30) days of receipt of such written notice:
(a) a substantial adverse change in Executive's duties, responsibilities or
title, without Executive's consent; (b) a reduction in Executive's Base Salary
(at the annualized rate), without Executive's consent, by more than 25%, during
the course of this Agreement, or a reduction that violates the last sentence of
Section 1 of this Agreement; (c) a relocation of Executive's principal place of
employment by more than a 30 mile radius surrounding Waltham, Massachusetts,
without Executive's consent; or (d) a material breach by the Company of this
Agreement or any Exhibit hereto.
6.4 "NONPERFORMANCE DUE TO DISABILITY" shall mean that,
if because of Disability, Executive is unable to perform the essential functions
of Executive's job, with or without reasonable accommodation, for a period of
thirty (30) consecutive days in any calendar year.
6.5 "WITHOUT GOOD REASON" shall mean termination or
resignation of Executive's employment by Executive other than for Good Reason.
7. Non-Disparagement. During Executive's employment by the
Company and any Non-Competition Period (as defined below), Executive shall not
at anytime make false, misleading or disparaging statements about the Company,
its parent, subsidiaries or affiliates, including any of their products,
services, management, directors, officers, employees, and customers.
8. Confidential Information and Covenants Not to Compete. The
parties agree that Executive's services to Company are of a unique value and
that confidential and proprietary information about Company has been or will be
obtained by, disclosed or otherwise made available to Executive as a result of
Executive's employment with Company. Accordingly, as a
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condition to Executive's employment, Executive and Company also are entering
into the Non-Disclosure Agreement attached hereto as EXHIBIT 2 (the
"CONFIDENTIALITY AND NON-COMPETITION AGREEMENT"}. The Confidentiality and
Non-Competition Agreement obligates Executive to not compete with Company for a
period of time after Executive's employment ends (such period being the
"NON-COMPETITION PERIOD"). If Executive's employment is terminated for any
reason on or before May 4, 2003, Executive agrees that Company may, at Company's
sole discretion, extend the Non-Competition Period for up to twelve (12) months
beyond the otherwise applicable end of the Non-Competition Period by (y) giving
Executive written notice to such effect within thirty (30) days after the
effective date of Executive's termination and (z) paying to Executive a lump sum
payment equal to Executive's monthly Base Salary (based upon the Base Salary in
effect prior to the effective date of termination and without giving effect to
any reductions in Base Salary taking place within thirty (30) days prior to the
effective date of termination) multiplied by the number of months by which the
Non-Competition Period is to be extended. Any payments made pursuant to this
Section 8 shall be in addition to any payments required under Section 5.
9. Dispute Resolution Process. All disputes between Executive and
Company that otherwise could be resolved in court shall be resolved instead by
the following alternative dispute resolution process (the "PROCESS").
9.1 Disputes Covered. This Process applies to all
disputes between Executive and Company, including those arising out of or
related to this Agreement or Executive's employment by Company. Disputes subject
to this Process include but are not limited to pay disputes, contract disputes,
legal disputes, wrongful termination disputes, and discrimination, harassment or
civil rights disputes. This Process applies to disputes Executive may have with
Company (and those that Company may have with Executive) and also applies to
disputes Executive may have with any of Company's employees or agents so long as
the person with whom Executive has the dispute is also bound by or consents to
this Process. This Process applies regardless of when the dispute arises and
will remain in effect after Executive's employment with Company ends, regardless
of the reason it ends. This Process does not apply, however, to any workers'
compensation or unemployment compensation claims, to the extent applicable under
the circumstances.
9.2 Negotiation and Mediation. Executive and Company
agree to attempt to resolve all disputes first by direct negotiations. If direct
negotiations are not successful after a period of thirty (30) days, the parties
shall then use mediation. They shall first attempt to agree upon a mediator. If
unable to agree upon a mediator, the parties shall request and conduct mediation
under the American Arbitration Association's National Rules for the Resolution
of Employment Disputes. Unless otherwise agreed by the parties, any mediation
sessions shall be held in Boston, Massachusetts. Temporary or interim injunctive
relief may be sought without mediating first. Any failure to mediate shall not
affect the validity of an arbitration award or the obligation to arbitrate.
9.3 Arbitration. If the dispute is not resolved through
negotiation and mediation after a period of ninety (90) days, the parties shall
request, and either party may demand, arbitration pursuant to the American
Arbitration Association's National Rules for the Resolution of Employment
Disputes. Unless otherwise agreed by the parties, any arbitration
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hearing shall be held in Boston, Massachusetts. The decision of the arbitrator
shall be final and binding on the parties and on all persons and entities
claiming through the parties. Submission of their dispute to arbitration shall
be the exclusive means for resolving the dispute, to the exclusion of any trial
by a court or jury. All disputes that are not resolved by agreement (in
mediation or otherwise) shall be determined by binding arbitration. The Company
will reimburse the Executive for Executive's reasonable fees and expenses,
including attorneys' fees, if Executive is the prevailing party as determined by
the arbitrator.
9.4 Injunctive Relief. Either party may request a court
to issue such temporary or interim relief (including temporary restraining
orders and preliminary injunctions) as may be appropriate, either before or
after mediation or arbitration is commenced. The temporary or interim relief
shall remain in effect pending the outcome of mediation or arbitration. No such
request shall be a waiver of the right to submit any dispute to mediation or
arbitration.
9.5 Employment Status. This Process does not affect the
status of the employment relationship between the parties, which as stated above
in Section 2.2 shall be "at will;" nor does this Process guarantee continued
employment by the Company, require discharge only for cause, or require any
particular corrective action or discharge procedures.
10. Notification. Solely to the extent required by law or as
necessary to prevent a material breach by Executive of Section 4 or 8 of this
Agreement, as reasonably determined by the Company, Executive hereby authorizes
the Company, or any of its employees or designated representatives or counsel,
to notify Executive's actual or future employers or any governmental agency of
any terms of this Agreement or the Confidentiality and Non-Competition Agreement
and Executive's responsibilities or obligations hereunder.
11. Severability; Survival of Provisions. If any part of this
Agreement or any part of the Confidentiality and Non-Competition Agreement is
held by any legal authority to be unenforceable or is severed by any legal
authority, the remainder of such agreement shall be enforced to the maximum
extent allowed by applicable law. Certain provisions of this Agreement,
including non-disparagement (Section 7), confidential information and covenants
not to compete (Section 8), dispute resolution process (Section 9), notification
(Sections 10 and 21), and governing law (Section 18) of this Agreement, all
Schedules hereto, and all of the provisions of the Confidentiality and
Non-Competition Agreement, shall survive after any such legal determination,
after Executive's employment by Company ends regardless of the reason it ends,
and shall be enforceable regardless of any such determination or any claim
Executive may have against Company.
12. Relief for Breach. Because any material breach or threatened
material breach by Executive of Sections 4, 7, and 8 of this Agreement or of the
Confidentiality and Non-Competition Agreement would result in continuing
material and irreparable harm to Company, and because it would be difficult or
impossible to establish the full monetary value of such damage, Company shall be
entitled to injunctive relief in the event of any such material breach or
threatened material breach by Executive. Injunctive relief is in addition to any
other available remedy, including termination of this Agreement and damages. In
the event of any threatened breach of this Agreement by Executive, Company may
suspend any payment of Base Salary,
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incentives, bonuses, Severance Benefits and other compensation due to Executive
under this Agreement and, if Executive has breached this Agreement, any
remaining amounts to be paid under this Agreement shall be forfeited. In the
event of any breach or threatened breach by either party which results in
court-ordered relief, the breaching party shall reimburse the non-breaching
party for its reasonable attorneys' fees and other expenses incurred to obtain
such relief.
13. Waiver. No waiver of any provision of this Agreement shall be
valid unless in writing, signed by the party against whom the waiver is sought
to be enforced. The waiver of any breach of this Agreement or failure to enforce
any provision of this Agreement shall not waive any later breach.
14. Binding Effect. This Agreement is binding upon the parties and
their personal representatives, heirs, successors and permitted assigns.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which, taken
together, shall constitute a single agreement.
16. Complete Agreement. This Agreement, together with the attached
Confidentiality and Non-Competition Agreement and the Schedules hereto, is the
final and complete expression of the parties' agreement relating to Executive's
employment by the Company. Without limiting the foregoing, this Agreement
replaces and supersedes any prior employment agreements between Executive and
Company, or its parent, subsidiaries, predecessors or affiliates, including,
without limitation, that certain Letter Agreement, dated January 28, 1999, by
and between Trellix Corporation and Executive, and each party to this Agreement
hereby releases and holds harmless the other party from any obligations or
liability with respect thereto. The parties acknowledge and agree that they are
not entering into this Agreement in reliance on anything not set out in this
Agreement. This Agreement shall control over any inconsistent policies or
procedures of Company affecting Executive's employment, whether in effect now or
adopted later, but Company's policies and procedures that are consistent with
this Agreement and have been made available to Executive, whether in effect now
or adopted later, shall apply to Executive's employment according to the terms
thereof.
17. Payroll Withholding. All payments of Base Salary, incentives,
bonuses, Severance Benefits and other compensation payable to Executive pursuant
to this Agreement or otherwise shall be subject to the customary withholding for
income taxes as reasonably determined appropriate by the Company, and shall be
subject to other withholdings or deductions as required with respect to such
compensation paid by a corporation to any employee.
18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to the provisions thereof relating to choice of laws.
These provisions do not give any party a right to proceed in court in violation
of the Dispute Resolution Process under Section 9 above.
19. Successors And Assigns. All rights and duties of Company under
this Agreement shall be binding on and inure to the benefit of its successors,
assigns or any company which purchases or otherwise acquires it or all or
substantially all of its operating assets by any method.
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This Agreement shall not be assignable by Executive other than the right to
receive payments or benefits being passed by will or by the laws of descent and
distribution.
20. Amendment. This Agreement contains the entire agreement of the
parties relating to the subject matter and may not be amended except by an
instrument in writing signed by both parties; it shall not be amended orally or
by course of dealing.
21. Notices. All notices required or permitted under this
Agreement shall be in writing and may be personally served or mailed by
registered or certified U.S. mail, postage prepaid and addressed as follows:
If to Company: Interland, Inc.
000 Xxxxxxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
If to Executive: Xx. Xxx Xxxxxx
00 Xxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered or telecopied, and 3 business days after the date of mailing,
if mailed by registered or certified mail, return receipt requested.
22. Reimbursement. Promptly following the execution and delivery
of this Agreement Company will reimburse Executive for Executive's reasonable
attorneys' fees incurred in connection with the negotiation of this Agreement,
provided, however, that (a) Executive must follow Company's standard expense
reimbursement procedure in connection with such reimbursement, (b) Executive
must provide Company with appropriate documentation of the expense (including
redacted attorneys' bills) and (c) the amount of such reimbursement will in no
event exceed five thousand dollars ($5,000).
INTERLAND, INC. EXECUTIVE
By: /s/ Xxxxx X. Xxxxxxx /s/ Xxx Xxxxxx
----------------------------- ------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxx Xxxxxx
-----------------------------
Title: Senior Vice Pres., Chief Date: 12/11/02
Financial Officer, General ------------------------
Counsel and Secretary
-----------------------------
Date: 12/11/02
-----------------------------
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EXHIBIT 1
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November 4, 2002
Xxx Xxxxxx
00 Xxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
RE: OFFER OF EMPLOYMENT
Dear Don:
On behalf of Interland, I am pleased to offer you the position of Senior Vice
President, reporting to Xxxx Xxxxxx, CEO and Chairman of the Board. Your
anticipated start date will be the day following the official close date of the
transaction between Interland, Inc. and Trellix, Inc. The following highlights
the terms of your employment.
You will have the opportunity to enter into an employment agreement with
Interland. Your base salary will be $9,615.38 per bi-weekly pay period based on
an annual salary of $250,000. Subject to the approval of the Board of Directors
you will be granted an option to purchase 350,000 shares of Interland, Inc.
stock. The grant will be effective the later of the date approved by the Board
of Directors, or your date of hire.
Up to thirty percent (30%) of your sign-on grant (105,000 options) will be
eligible for accelerated vesting based upon the achievement of certain business
objectives. These 2 or 3 objectives will be mutually agreed upon by you and Xxxx
within thirty (30) days of your start date. The objectives will be of high
impact with specific timelines for accomplishment. If the documented performance
is achieved, the vesting will accelerate. If they are not achieved, then the
normal approved vesting schedule will apply as stated in your notice of grant
(NOG).
In addition, you will be eligible to participate in Interland's performance
based incentive compensation program, where you will have the opportunity to
earn a target incentive of up to forty-five percent (45%) of the base salary
paid to you during the defined performance period.
It is understood that you will be commuting regularly between Concord,
Massachusetts and Atlanta, Georgia in order to carry out the duties and
responsibilities of your position. You will be required to comply with
Interland's standard travel policy, which includes the use of preferred vendors
including travel agencies, hotels, and airlines among others. A copy of this
policy can be made available to you if at any time before your start date if
necessary.
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Interland offers a variety of health care plans and other benefits programs to
eligible team members and their dependents. Additional information concerning
these plans and programs will be provided to you upon your start date.
You will be required to provide Interland with documentation that you
are legally authorized to work in the United States. Further, we will require
that you execute our standard new team member forms, including, but not limited
to, a Confidentiality Agreement, and an acknowledgment with respect to
Interland's Employment Policy Manual.
This letter is not a contract of employment. Further, the length or duration of
your employment is not guaranteed. In accordance with our policies, your
employment with us will be on an "at-will" basis, meaning that both you and we
have the right to end your employment at any time, for any reason, with or
without cause or prior notice.
This offer of employment is contingent upon the close of the sale of Trellix,
Inc. to Interland, Inc., which is anticipated to occur no later than November
30, 2002.
Please acknowledge your receipt of this letter and desire to begin your
employment with Interland by signing where indicated below, and then responding
by immediately returning this signed letter to me by fax under cover letter to
(000) 000-0000.
Should you have any questions, please call me at (000) 000-0000.
I am excited that you will be joining the Interland team!
Sincerely,
Xxx Xxxxxxxx
Senior Vice President and Chief Human Resources Officer
Interland
Fax: (000) 000-0000
Phone: (000) 000-0000
I hereby acknowledge receipt of this offer letter, accept the terms, and express
my intent to begin work on the anticipated start date set forth above.
By: Date:
----------------------------------- -----------------------------
Xxx Xxxxxx
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EXHIBIT 2
NON-DISCLOSURE AGREEMENT
(Assignment of IP and Non-Solicitation)
(Employment Form - Directors and Above)
INTERLAND, INC. AND ITS SUBSIDIARIES, with a place of business located at 000
Xxxxxxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 ("Interland"), and
the undersigned managerial employee ("Employee"), agree, in connection with
Employee's employment by Interland and in consideration of the rights and
benefits given to Employee in connection with such employment (the receipt and
consideration of which is hereby acknowledged) agree as follows.
1. CONFIDENTIALITY.
1.1 During Interland's employment of Employee (whether in
Employee's current capacity or in any other future capacity), Interland may
disclose to Employee, either orally, in writing or by other means, trade secrets
and proprietary information concerning Interland's business, finances, products,
customers, vendors, computer technology and other technical, commercial or
financial affairs of Interland which are not in the public domain and which have
been reasonably restricted by Interland as confidential, hereinafter referred to
as the "CONFIDENTIAL INFORMATION."
1.2 Employee shall hold in trust and confidence the
CONFIDENTIAL INFORMATION and shall not disclose such CONFIDENTIAL INFORMATION to
any third party, except as agreed by Interland in writing.
1.3 Employee agrees not to use the CONFIDENTIAL
INFORMATION for any purpose other than in the performance of Employee's duties
as an employee of Interland.
1.4 Employee's obligations in this Section 1 will not
apply to any CONFIDENTIAL INFORMATION which was: (i) at the time of disclosure
to Employee, in the public domain; (ii) after disclosure to Employee, published
or otherwise, becomes part of the public domain through no fault of Employee;
(iii) without a breach of duty owed to Interland, in Employee's possession at
the time of disclosure to Employee; (iv) received after disclosure to Employee
of such information from a third party who had a lawful right to and, without a
breach of duty owed to Interland, did disclose such information to Employee; or
(v) independently developed by Employee without reference to CONFIDENTIAL
INFORMATION.
1.5 The covenants of confidentiality set forth herein (i)
will apply after the date hereof to any CONFIDENTIAL INFORMATION disclosed to
Employee and (ii) will continue and must be maintained from the date hereof
until termination of Employee's employment, plus (A) with respect to trade
secrets (as defined by applicable law), at any and all times after termination
of Employee's employment during which such trade secrets retain their status as
such under applicable law; and (B) with respect to CONFIDENTIAL INFORMATION, for
a period equal to the shorter of two (2) years after termination of Employee's
employment, or until such CONFIDENTIAL INFORMATION no longer qualifies as
CONFIDENTIAL INFORMATION under this Agreement or applicable law.
2. INVENTIONS
2.1 Employee hereby irrevocably assigns to Interland all
of Employee's rights to all Subject Inventions (as defined below) in the United
States and all other countries and the right to claim priority therein. "Subject
Invention" means any Invention (as defined below) which is conceived by Employee
solely or jointly with others and (i) relates to the actual or
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anticipated business, research or development of Interland, (ii) results from
any work performed by Employee using any equipment, facilities, materials,
Confidential Information or personnel of Interland, or (iii) is suggested by or
results from any task assigned or performed by Employee for or on behalf of
Interland. "Invention" means any idea, invention, discovery, improvement,
innovation, design, process, method, formula, technique, machine, article of
manufacture, composition of matter, algorithm or computer program, as well as
improvements thereto.
2.2 Employee represents and warrants that any and all
patents, copyrights, trademarks, trade names, service marks, service names,
trade dress, trade secrets, moral rights, or other intellectual property rights
(collectively, "Intellectual Property Rights") that were developed by Employee
prior to the date hereof and contained in the products or services of Trellix
Corporation ("Trellix") existing as of the date hereof or currently under
development ("Trellix Products") have been assigned by Employee to Trellix. All
Intellectual Property Rights created by Employee are original to Employee.
2.3 If Employee owns any issued United States Patent or
foreign equivalent thereof, or Employee is an inventor, either individually or
jointly, of any issued United States Patent or foreign equivalent thereof,
Employee must provide the United States Patent number and/or foreign number for
any such patent or foreign equivalent thereof in Exhibit A. Otherwise, Employee
represents that Employee owns no United States Patent or foreign equivalent
thereof, individually or jointly, except those described on Exhibit A.
2.4 Employee agrees that should Interland elect to file
an application for patent, either in the United States or in any foreign country
on a Subject Invention for which Employee is an inventor, Employee will execute
all necessary documentation relating to the patent application, including formal
assignments to Interland, and will cooperate with attorneys or other persons
designated by Company to provide all information necessary for the prosecution
of the patent application(s) in the United States and any foreign country.
Employee also agrees to assist Interland in every proper way to maintain its
patents during and following the period of employment including, but not limited
to, the performance of all lawful acts, such as the giving of testimony in any
interference proceedings, infringement suits, or other litigation, as may be
deemed necessary or advisable by Interland. Interland shall pay all of
Employee's costs and expenses, as well as reasonable time charges, incurred
pursuant to this Section 2.4.
3. Copyrights.
3.1 Employee agrees that any Works (as defined below)
created by Employee in the course of Employee's duties as an employee of
Interland are subject to the "Work for Hire" provisions contained in Sections
101 and 201 of the United States Copyright Law, Title 17 of the United States
Code. "Work" means any copyrightable work of authorship, including without
limitation, any technical descriptions for products and services, user's guides,
graphical works, audiovisual works, sound recordings, advertising materials,
computer programs, web sites and content and any contribution to such materials.
All right, title and interest to copyrights in all Works that have been or will
be prepared by Employee within the scope of Employee's employment with the
Company will be the property of the Company. Employee further agrees that, to
the extent the provisions of Title 17 of the United States Code do not vest the
copyrights to any Works in the Company, Employee hereby assigns to the Company
all right, title and interest to copyrights that Employee may have in the Works.
3.2 If Employee owns any ownership interest in any Work,
Employee will list any such Work on Exhibit A. Otherwise, Employee will not
claim any ownership rights in any Works, except those described on Exhibit A.
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3.3 Employee also agrees to assist the Company in every
proper way to maintain its Copyrights during and following the period of
employment including, but not limited to, the performance of all lawful acts,
such as the giving of testimony in any infringement suits or other litigation as
may be deemed necessary or advisable by the Company.
4. NON-SOLICITATION OF CUSTOMERS. During the term of Employee's
employment by Interland and for a period of six (6) months following the
termination of such employment, Employee shall not, either directly or
indirectly, on Employee's behalf or on behalf of others (a) solicit, divert or
appropriate to any Competing Business (as defined below) or (b) attempt to
solicit, divert or appropriate to any Competing Business, any business from any
customer or actively sought prospective customer of Interland with whom Employee
had contact on behalf of Interland. "Competing Business" means any business
organization of whatever form engaged, either directly or indirectly, which is
the same as, or substantially the same as, the Business of Interland. "Business
of Interland" means the business of developing and providing Web hosting and
related services and products including without limitation email services,
website development and hosting and e-commerce services.
5. NON-SOLICITATION OF EMPLOYEES. DURING the term of Employee's
employment by Interland and for a period of one (1) year following the
termination of Employee's employment, Employee shall not, either directly or
indirectly, on Employee's own behalf or on behalf of others, solicit, divert or
hire away, or attempt to solicit, divert, or hire away, any person employed by
Interland at any facility where Employee performed services or any person
employed by Interland with whom Employee had regular contact in the course of
Employee's employment by Interland.
6. CONTRACTS WITH OTHERS
6.1 Employee agrees to provide to the Company, upon the
execution and delivery of this Agreement, a copy of the pertinent portions of
any employment, consulting or subcontracting agreement and other similar
documents, (described on Exhibit A), executed by Employee with a former employer
or any business or person with which Employee has been associated, which
prohibits Employee during a period of time which includes the effective date of
this Agreement from: (i) competing with or participating in a business which
competes with Employee's former employer or business; (ii) soliciting personnel
of the former employer or business to leave the former employer's employment or
to leave the business; or (iii) soliciting customers of the former employer or
business on behalf of another business.
6.2 Employee represents to the Company that Employee has
not entered into any agreement with any other party which purports to require
Employee to assign any Work or any Invention created, conceived or first
practiced by Employee during a period of time which includes the effective date
of this Agreement nor is Employee subject to any law, court order or regulation
which purports to require such assignment, except as described on Exhibit A.
Employee will obtain and provide to the Company a copy of the above described
agreement(s) and a reference to any such law, court order or regulation.
7. NON-COMPETITION
7.1 Employee acknowledges and agrees as follows:
(a.) He is being hired by Interland because of his unique
skills and abilities, and that, by virtue of being
hired by Interland, Employee will learn special,
unique and confidential matters pertaining to
Interland and the Business of Interland.
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One of the major purposes Interland has in offering
employment to Employee is the desire to utilize
Employee's knowledge and experience in maintaining
and enhancing the products, services and customer
base acquired by Interland from Trellix Corporation.
(b.) Courts in the United States have not spoken on the
applicability of covenants not to compete in the
context of Internet-based businesses where the
location of the business and the location of the
employee are irrelevant to the employer and its
customers, because work by employees can be
accomplished for the employer regardless of the
employee's location and customers shopping on the
Internet do not purchase products and services based
upon the location of the business. Consequently, the
covenants contained herein, including without
limitation, the nationwide scope of the Protected
Territory (as defined below) are fair, reasonable,
and appropriate restrictions on Employee in light of
such circumstances.
(c.) Employee acknowledges that Interland would sustain
great and irreparable loss and damage if Employee
were to breach any of the covenants contained in this
Agreement.
(d.) The covenants contained herein were explicitly
bargained for and reviewed by counsel for Employee.
7.2 Having acknowledged and explicitly agreed to the
foregoing, Employee will learn special, unique and confidential matters
pertaining to Interland and the Business of Interland. Employee agrees that,
during Employee's employment and for (a) six (6) months after the termination of
Employee's employment for any reason, plus (b) any extended non-competition
period invoked through compliance by Interland with all the terms set forth in
Section 8 of Employee's Employment Agreement (such period being the
"Non-Competition Period"), Employee will not, directly or indirectly, (i) be
employed (whether as an employee or as a consultant) for the purpose of
providing Protected Services to a Competing Business in the Protected Territory,
(ii) purchase or accept a beneficial interest in a Competing Business in the
Protected Territory (except that Employee may purchase publicly-traded
securities in Competing Businesses so long as Employee's holdings in such
Competing Business do not exceed one percent (1%) of the aggregate outstanding
shares in such Competing Business, or (iii) serve as on the board of directors
or similar governing body of any Competing Business. For purposes of this
Section, "Protected Territory" means the United States of America. For purposes
of this Section, "Protected Services" means those specific services and other
services reasonably related thereto that Employee provided to Interland or its
customers during the term of this Agreement.
8. MISCELLANEOUS. This Agreement may not be amended, nor any
obligation waived, except in a writing signed by Interland and Employee. This
Agreement is not assignable or delegable in whole or in part by Employee without
the written consent of Interland. This Agreement shall be governed and construed
by the laws of the Commonwealth of Massachusetts, without reference to conflict
of law principles. An executed original of this Agreement may be delivered by
facsimile, which shall be binding as an original. If any part of this Agreement
is held by any legal authority to be unenforceable or is severed by any legal
authority, the remainder of such agreement shall be enforced to the maximum
extent allowed by applicable law.
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INTERLAND, INC. EXECUTIVE
By:
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Name: Xxx Xxxxxxxx Name: Xxx Xxxxxx
----------------------------
Title: SVP - Human Resources Date:
---------------------------
Date:
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