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Exhibit 10.23
EMPLOYMENT AGREEMENT
This AGREEMENT (the "Agreement") is made as of August 31, 1998 (the
"Effective Date"), by and between SC/NE, LLC, a Delaware limited liability
company with its headquarters located in New York, New York (the "Company"), and
Xxxxx Xxxxxx (the "Executive"). In consideration of the mutual covenants
contained in this Agreement, the Company and the Executive agree as follows:
1. EMPLOYMENT. Commencing on the Effective Date, the Company agrees to
employ the Executive and the Executive agrees to be employed by the Company on
the terms and conditions set forth in this Agreement.
2. CAPACITY. During the Term (as hereinafter defined), the Executive shall
initially serve the Company as the Senior Managing Principal. The Executive
shall also serve the Company in such other or additional offices as the
Executive may be requested by the Leadership Council of the Company. In such
capacity or capacities, the Executive shall perform such services and duties in
connection with the business, affairs and operations of the Company consistent
with his status as a Principal as may be assigned or delegated to the Executive
from time to time by or under the direction and supervision of the Leadership
Council. The Company will not provide any financial consulting services which
could result in it being defined as an Investment Advisor, as defined in Section
202(a)(ii) of the Investment Advisors Act of 1940 or Section 2(a)(20) of the
Investment Company Act of 1940; an Investment Company as defined in Section 3(a)
of the Investment Company Act; or a Broker or Dealer as defined in Sections
3(a)(4) or 3(a)(5) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
3. TERM. Subject to the provisions of Section 6, the term of employment
under this Agreement (the "Term") shall be for two (2) years from the Effective
Date and shall automatically renew for periods of one (1) year commencing at the
second anniversary of the Effective Date and on each subsequent anniversary
thereafter, unless either the Executive or the Company, acting through its
Leadership Council, gives written notice to the other not less than sixty (60)
days prior to the date of any such anniversary of such party's election not to
extend the Term or, if at such time Nextera Enterprises, L.L.C., a Delaware
limited liability company ("Nextera"), has a policy of not extending employment
agreements to all or a designated class (reasonably consistent with business
operations) of its executives into which the Executive falls, Nextera may give
the written nonrenewal notice as described above. In the event Nextera so elects
to not renew this Agreement and the Executive's employment is not terminated,
thereafter the Executive shall be entitled to the severance benefits which
Nextera has reasonably implemented as a firm-wide policy for all or most of its
executives; provided, however, that such severance benefits shall not be
materially inconsistent with the severance benefits that had been provided under
this Agreement in the case of nonrenewal by the Company.
4. COMPENSATION AND BENEFITS. The regular compensation and benefits payable
to the Executive under this Agreement shall be as follows:
(a) SALARY. During the Term for all services rendered by the Executive
under this Agreement, the Company shall pay the Executive a salary (the
"Salary") at the annual rate of
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Two Hundred Fifty Thousand Dollars ($250,000) subject to increase from time to
time at the discretion of the Leadership Council or the Compensation Committee
of the Leadership Council (the "Compensation Committee"). The Salary shall be
payable in periodic installments in accordance with the Company's usual practice
for its senior executives.
(b) BONUS. The Executive shall be entitled to participate in the
Annual Incentive Plan to be adopted by the Company as of the date hereof in the
form attached as "SCHEDULE 1" hereto and in any successor annual incentive
programs if established by the Company. The Executive's annual bonus shall be
determined under the Annual Incentive Plan, and the Executive shall have an
initial annual target bonus equal to sixty percent (60%) of his annual Salary.
(c) REGULAR BENEFITS. The Executive shall also be entitled to
participate in the plans listed on "SCHEDULE 2" hereto and any other employee
benefit plans, medical insurance plans, life insurance plans, disability income
plans, retirement plans, pension plans, profit sharing plans, vacation plans,
expense reimbursement plans and other benefit plans which the Company, may from
time to time have in effect for all or most of its senior executives
(collectively, "Benefits"). Such participation shall be subject to the terms of
the applicable plan documents, generally applicable policies of the Company,
applicable law and the discretion of the Leadership Council, the Compensation
Committee or any administrative or other committee provided for in or
contemplated by any such plan. Nothing contained in this Agreement shall be
construed to create any obligation on the part of the Company to establish any
such plan or to maintain the effectiveness of any such plan which may be in
effect from time to time, provided, however, the Benefits offered to the
Executive shall be substantially similar to those Benefits extended to the
Executive by Sibson & Company, L.P., a Delaware limited partnership (the
"Partnership") immediately prior to the date hereof, provided further that at
any time (i) Nextera may in its sole discretion cause the Company (A) to modify
or terminate any Benefits provided to the Executive as Nextera deems necessary
to provide that any employee Benefit plan and related trust intended to be
qualified and exempt under Sections 401(a) and 501(a) of the Internal Revenue
Code of 1986, as amended, respectively, shall be so qualified and exempt, or (B)
to otherwise comply with the applicable requirements of the Employee Retirement
Income Security Act of 1974, as amended (or other applicable law) and (ii) the
Leadership Council may terminate such Benefits in its discretion. In the event
that any Benefits are terminated or materially reduced pursuant to clause (i)
above, the Company shall provide the Executive with other Benefits or one or
more cash payments which in the aggregate on an after-tax basis are equal to the
value of such terminated or materially-reduced Benefits through the date of the
Executive's termination of employment.
(d) PAST SERVICE. The Executive shall be credited with all past
service with the Partnership in the calculation of all benefits and for all
other relevant purposes whatsoever where past service or seniority shall be
considered, subject to any regulatory limitations. For purposes of the preceding
sentence, the Executive shall be deemed to have begun employment with the
Company on the date the Executive began employment with the Partnership or its
predecessors, as applicable.
(e) OTHER INTEREST.
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(i) The Company, Nextera and the Executive agree that on the Effective
Date Nextera shall issue and the Executive shall purchase 1,554 Class A
Common Units of Nextera (the "Class A Common Units") at a purchase price of
$0.14 per Class A Common Unit. Such Class A Common Units are referred to
herein as "Purchased Units" and individually as a "Purchased Unit." Nextera
hereby represents and warrants that the Purchased Units to be sold to the
Executive have been duly authorized, and when issued to and paid for by the
Executive will be validly issued, fully paid and nonassessable.
Within 30 days from the Effective Date (the "Valuation Date"), the
Executive and Nextera shall agree on the fair market value of such
Purchased Units (the "Agreed Value"). Within 15 days of the Valuation Date,
Nextera shall pay to the Executive, as a compensation bonus, cash in an
amount equal to the Executive's federal, state, and local income tax on the
portion of the Agreed Value of such Purchased Units which is in excess of
$.70 per Purchased Unit (the "Excess Value"). The Executive's federal,
state, and local income tax on the Excess Value shall be computed by taking
into account the highest personal income tax rate on ordinary income for
federal purposes and for the state and locality where the Executive has his
tax home, taking into consideration the deduction for federal income tax
purposes of the state and local income taxes paid, and, if applicable, the
deduction for state income tax purposes of the local income taxes paid.
Additionally, on the same date that the compensation bonus described above
is paid to the Executive, Nextera shall pay to the Executive, as an
additional compensation bonus, the amount of cash necessary to "gross-up"
the compensation bonus described above such that after the Executive pays
his federal, state, and local income taxes on the two compensation bonuses,
he will have enough cash remaining to pay his federal, state, and local
income tax on the Excess Value. If any taxing authority challenges the
Agreed Value, then Nextera shall indemnify Executive for (i) any reasonable
costs and expenses incurred in defending against such challenge and (ii)
any additional tax liability incurred by Executive (including any interest
and penalties) if such challenge results in a higher value of such
Purchased Units than the Agreed Value, and such indemnification shall be
"grossed-up" using the "gross-up" procedure described directly above.
(ii) The Executive represents as of the date hereof that the Executive
is an "accredited investor" as such term is defined by Rule 501 promulgated
under the Securities Act of 1933, as amended (the "Securities Act"). The
Executive has substantial experience in evaluating and investing in private
placement transactions of securities in companies similar to Nextera so
that he is capable of evaluating the merits and risks of acquiring
Purchased Units in connection with this Agreement and has the capacity to
protect his own interests. The Executive must bear the economic risk of
holding the Purchased Units indefinitely unless such securities are
registered pursuant to the Securities Act, or an exemption from
registration is available for the disposition thereof.
(iii) The Executive is acquiring the Purchased Units for his own
account for investment only, and not with the view to, or for resale in
connection with, any distribution thereof. It understands that the
Purchased Units acquired have not been, and will not be, registered under
the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends
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upon, among other things, the bona fide nature of the investment intent and
the accuracy of the Executive's representations as expressed herein.
(iv) The Executive understands that no public market now exists for
any of the securities issued by Nextera and that Nextera has not made any
assurances that a public market will ever exist for such securities.
(v) The Executive has received and read the Nextera Operating
Agreement, Nextera business plan and financial statements and has had an
opportunity to discuss Nextera's business, management and financial affairs
with its management. The Executive has also had an opportunity to ask
questions of and receive answers from officers of Nextera regarding the
terms and conditions of acquiring the Purchased Units, which questions were
answered to the Executive's satisfaction.
(vi) The residence of the Executive in which his investment decision
was made is set forth next to the Executive's name on the signature page
hereto.
(vii) Additionally, the Executive may participate in any additional
option or similar incentive plans which the Company and/or Nextera shall
have in effect from time to time for the benefit of all or most of its
executive employees.
(f) VACATION. The Executive's vacation entitlement shall be the same
as the policy of the Partnership immediately prior to the date hereof.
(g) TAXATION OF PAYMENTS AND BENEFITS. The Company shall undertake to
make deductions, withholdings and tax reports with respect to payments and
Benefits under this Agreement to the extent that it reasonably and in good faith
believes that it is required to make such deductions, withholdings and tax
reports. Payments under this Agreement shall be in amounts net of any such
deductions or withholdings. Nothing in this Agreement shall be construed to
require the Company to make any payments to compensate the Executive for any
adverse tax effect associated with any payments or benefits or for any deduction
or withholding from any payment or benefit.
(h) EXCLUSIVITY OF SALARY AND BENEFITS. The Executive shall not be
entitled to any payments or benefits other than those provided under this
Agreement (other than customary business expense reimbursements submitted and
approved in accordance with Company policy).
5. EXTENT OF SERVICE. During the Executive's employment under this
Agreement, the Executive shall, subject to the direction and supervision of the
Leadership Council or the Senior Managing Principal, devote substantially all of
the Executive's business time, and use his best efforts and business judgment,
skill and knowledge to the advancement of the Company's interests and to the
discharge of the Executive's duties and responsibilities under this Agreement.
The Executive shall not engage in any other business activity, except as may be
approved by the Leadership Council which approval shall not be unreasonably
withheld; provided that nothing in this Agreement shall be construed as
preventing the Executive from:
(a) investing the Executive's assets in any company or other entity in
a manner not prohibited by the Non-Compete, Non Solicitation, Proprietary
Information,
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Confidentiality and Inventions Agreement referred to in Section 7(a) and in such
form or manner as shall not require any material activities on the Executive's
part in connection with the operations or affairs of the companies or other
entities in which such investments are made; or
(b) engaging in religious, charitable or other community or non-profit
activities that do not materially impair the Executive's ability to fulfill the
Executive's duties and responsibilities under this Agreement.
6. TERMINATION AND TERMINATION BENEFITS. Notwithstanding the provisions of
Section 3, the Executive's employment under this Agreement shall terminate under
the following circumstances set forth in this Section 6.
(a) Termination by the Company for Cause.
(i) The Executive's employment under this Agreement may be
terminated for cause without further liability on the part of the
Company effective immediately upon a vote of the Leadership Council
and written notice to the Executive. Subject to Section 6(h), only the
following shall constitute "cause" for such termination:
(A) material dishonest statements or acts of the Executive
with respect to the Company or any affiliate of the Company;
(B) conviction of the Executive for (x) a felony or (y) any
misdemeanor involving moral turpitude, deceit, dishonesty or
fraud; or
(C) willful and material breach of this Agreement by the
Executive, gross negligence, willful misconduct or willful
failure or refusal of the Executive to comply with explicit
directions of the Leadership Council which directions are
consistent with Section 2 of this Agreement, in each instance
after fifteen (15) days written notice and an opportunity to
cure.
(i) In making any determination under this Section 6(a), the
Leadership Council shall act fairly and in good faith and shall give
the Executive an opportunity to appear and be heard at a meeting of
the Leadership Council and present evidence on his behalf.
(b) TERMINATION BY THE EXECUTIVE. The Executive's employment under
this Agreement may be terminated by the Executive by written notice to the
Leadership Council at least sixty (60) days prior to such termination.
(c) TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE WITH
GOOD REASON. Subject to the payment of Termination Benefits pursuant to Section
6(d), the Executive's employment under this Agreement may be terminated by the
Company without cause upon written notice to the Executive by a vote of the
Leadership Council or by the Executive with Good Reason (as defined in Section
8(b)) upon written notice to the Leadership Council.
(d) CERTAIN TERMINATION BENEFITS. Unless otherwise specifically
provided in
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this Agreement or otherwise required by law, all compensation and benefits
payable to the Executive under this Agreement shall terminate on the date of
termination of the Executive's employment under this Agreement. Notwithstanding
the foregoing, in the event of termination of the Executive's employment with
the Company pursuant to Section 6(c) above or Section 6(g) below, the Company
shall provide to the Executive the following termination benefits ("Termination
Benefits"):
(i) continuation of the Executive's Salary at the rate then in
effect pursuant to Section 4(a); and
(ii) (A) a bonus for the year in which the termination occurs pro
rata for the period of service in such year, based upon the bonus
amount, if any, paid to the Executive pursuant to the Annual Incentive
Plan described in Section 4(b) for the year preceding the year in
which the termination of employment occurs, or if the termination
occurs prior to the initial determination of a bonus pursuant to the
Annual Incentive Plan, based upon the bonus paid to the Executive by
the Partnership for the year ended December 31, 1997 (such applicable
amount being the "Applicable Bonus") and (B) payments at an annual
rate based upon the Applicable Bonus to be paid monthly during the
period set forth in subsection (iv) below; and
(iii) continuation of all Benefits to the extent authorized by
and consistent with 29 U.S.C. ss.1161 et seq. (commonly known as
"COBRA"), with the cost of the regular premium for such Benefits
shared in the same relative proportion by the Company and the
Executive as in effect on the date of termination.
(iv) The Termination Benefits set forth in (i), (ii)(B) and (iii)
above shall continue effective until the later of (x) the expiration
of the initial Term assuming employment of the Executive had not been
terminated for the initial two-year period of this Agreement (but not
including any renewals that have not yet occurred) or (y) one (1) year
from the date of the termination of the Executive's employment and
will include such payments for accrued vacation pay and any similar
items required by law. Notwithstanding the foregoing, nothing in this
Section 6(d) shall be construed to affect the Executive's right to
receive COBRA continuation entirely at the Executive's own cost to the
extent that the Executive may continue to be entitled to COBRA
continuation after the Executive's right to cost sharing under Section
6(d)(iii) ceases.
(v) In the event of the termination of the Executive's employment
with the Company pursuant to Section 6(c) above any options
exercisable for Class A Common Units granted to the Executive under
the Executive's Equity Participation Agreement which are not vested at
that time shall be deemed to have vested to the extent of fifty
percent (50%) of such remaining unvested portion.
In addition to the foregoing, in the event of the termination of
the Executive's employment with the Company for any reason, the Executive shall
be entitled to payment of any accrued and unpaid Benefits for which the
Executive may otherwise be vested or entitled in accordance with the terms of
the applicable plans governing such Benefits and to payment for reimbursable
expenses under applicable Company policy within thirty (30) days of termination.
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(e) DISABILITY. At the election of the Leadership Council, this
Agreement shall terminate on such date as may be selected by the Leadership
Council after the Executive shall have failed to render and perform the services
required of him under this Agreement during any period of 90 days within any 120
day period during the Term because of physical or mental disability. In the
event of such termination, the Company shall have no further obligation for the
payment of compensation or benefits hereunder, except (i) for compensation
accrued and unpaid through the termination date and (ii) the payment of any
disability insurance to which the Executive may be entitled. If there should be
any dispute between the parties as to the Executive's physical or mental
incapacity or disability pursuant to this Section 6(e), such question shall be
settled by the opinion of an impartial reputable physician agreed upon for this
purpose by the parties or their representatives, or failing agreement within ten
(10) days after a written request therefor by any party to the other party, one
selected in accordance with the rules of the American Arbitration Association.
The certificate of such physician as to the matter in dispute shall be final and
binding on the parties.
(f) DEATH. In the event of termination as a result of the Executive's
death, the Company shall have no further obligation to the Executive's
representatives and heirs hereunder.
(g) FAILURE TO RENEW AGREEMENT. In the event the Company or Nextera
elects not to extend the term of this Agreement as permitted by Section 3 and
the Executive's employment is terminated, (i) that portion of Executive's
options exercisable for Class A Common Units granted to the Executive under the
Executive's Equity Participation Agreement which are not vested at that time
shall be deemed to have vested to the extent of fifty percent (50%) of such
remaining unvested portion, and (ii) the Executive shall be entitled to the
other Termination Benefits described in Section 6(d).
(h) LEAVE OF ABSENCE UPON INDICTMENT. Upon indictment of the Executive
for (A) a felony or (B) any misdemeanor involving moral turpitude, deceit,
dishonesty or fraud ("indictment," for these purposes, meaning an indictment,
probable cause hearing or any other procedure pursuant to which an initial
determination of probable or reasonable cause with respect to such offense is
made), the Leadership Council, at its option, may place the Executive on a paid
leave of absence from employment for a period of up to six (6) months from such
election. At the end of the six (6) month period if the indictment is pending,
the Leadership Council may terminate the Executive for "cause" effective
immediately upon a vote of the Leadership Council and written notice to the
Executive without further liability on the part of the Company. In making any
determination under this Section 6(h), the Leadership Council shall act fairly
and in good faith and shall give the Executive an opportunity to appear and be
heard at a meeting of the Leadership Council or any committee thereof and
present evidence on his behalf.
(i) REMOVAL FROM OFFICE AS SENIOR MANAGING PRINCIPAL. Notwithstanding
the foregoing, the Executive may be removed from office as Senior Managing
Principal and his employment may be terminated in accordance with the terms and
provisions of Section 3.19 of the Limited Liability Company Agreement of the
Company. Other than as set forth in the Limited Liability Company Agreement of
the Company, any termination of the Executive's employment under this Section
6(i) shall be without further liability on the part of the Company. In the event
the Executive is removed from office as Senior Managing Principal but his
employment is not also terminated, this Agreement shall be terminated and shall
be replaced with
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a written employment agreement with substantially similar terms and conditions
(including the then existing Term) as was provided to the Executive hereby,
other than the status of Senior Managing Principal.
7. NON-COMPETE, NON-SOLICITATION, PROPRIETARY INFORMATION, CONFIDENTIALITY
AND INVENTIONS AGREEMENTS.
(a) The Executive agrees to sign the Nextera Non-Compete,
Non-Solicitation, Proprietary Information, Confidentiality and Inventions
Agreement, a copy of which is attached hereto as Exhibit "A."
(b) LITIGATION AND REGULATORY COOPERATION. During the Executive's
employment, the Executive shall cooperate fully with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company or Nextera which relate to
events or occurrences that transpired while the Executive was employed by the
Company, the Partnership or the Partnership's predecessors provided, however,
that the Executive shall be permitted to give testimony and appear as a witness
in any proceeding in which such testimony or appearance is required by law. The
Executive's full cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to act as a witness on behalf of the Company at
mutually convenient times. During the Executive's employment, the Executive also
shall cooperate fully with the Company in connection with any investigation or
review of any federal, state or local regulatory authority as any such
investigation or review relates to events or occurrences that transpired while
the Executive was employed by the Company. The Executive also agrees to provide
reasonable cooperation to the Company on matters of the type described in this
Section 7(b) after termination of the Executive's employment. The Company shall
reimburse the Executive for any reasonable out-of-pocket expenses incurred in
connection with the Executive's performance of obligations pursuant to this
Section 7(b).
(c) INJUNCTION. The Executive agrees that it would be difficult to
measure any damages caused to the Company which might result from any breach by
the Executive of the promises set forth in this Section 7, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
the Executive agrees that if the Executive breaches, or proposes to breach, any
portion of this Section 7, the Company shall be entitled, in addition to all
other remedies that it may have, to an injunction or other appropriate equitable
relief to restrain any such breach without showing or proving any actual damage
to the Company.
8. CHANGE OF CONTROL.
(a) Change of Control shall mean the occurrence of one or more of the
following events:
(i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d)(2) of the Exchange Act (other than any fiduciary
holding securities under an employee benefit plan of the Company, any
member of the KU Control Group (as defined in the Nextera Operating
Agreement as amended by the First Amendment to the
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Nextera Operating Agreement (the "First Amendment")), or any
Controlled Affiliate (as defined in the First Amendment) of the KU
Control Group (x) becomes a "beneficial owner" (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company or Nextera, representing
fifty percent (50%) or more of the combined voting power of the then
outstanding securities of the Company or Nextera, or (y) has the
right, directly or indirectly, by ownership of voting securities,
contract or otherwise, to elect a majority of the members of the Board
of Directors of Nextera; or
(ii) persons who, as of the Effective Date, constituted the Board
of Directors of Nextera (the "Incumbent Board") cease for any reason,
including without limitation as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a
majority of the Board of Directors of Nextera provided that any person
becoming a member of the Board of Directors of Nextera subsequent to
the Effective Date whose election was approved by at least a majority
of the members then comprising the Incumbent Board shall, for purposes
of this Section 8(ii), be considered a member of the Incumbent Board,
and further provided that any person or persons becoming a member of
the Board of Directors of Nextera subsequent to the Effective Date who
was nominated by the Board of Directors of Nextera or the governing
body of any Controlled Affiliate of the KU Control Group shall, for
purposes of this Section 8(ii), be considered a member of the
Incumbent Board, as applicable; or
(iii) the members or stockholders of the Company or Nextera
approve a merger or consolidation of the Company or Nextera with any
other corporation or other entity, other than (1) a merger or
consolidation which would result in the voting securities of the
Company or Nextera outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than seventy-five
percent (75%) of the combined voting power of the voting securities of
the Company or Nextera or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger or
consolidation effected to implement a recapitalization of the Company
or Nextera (or similar transaction) in which no "person" or "group"
(as defined in Section 8(a)(i) above) (other than any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, any member of the KU Control Group (as defined in the First
Amendment), or any Controlled Affiliate of the KU Control Group)
acquires more than fifty percent (50%) of the combined voting power of
the Company's or Nextera's then outstanding securities; or
(iv) the members or stockholders of the Company or Nextera
approve a plan of complete liquidation of the Company or Nextera or an
agreement for the sale or disposition by the Company or Nextera of all
or substantially all of the assets of the Company or Nextera.
Notwithstanding the foregoing, for purposes of this Agreement,
(i) a transfer (whether pursuant to a sale or otherwise) of all or a portion of
the stock or membership interests of the Company or Nextera or a transfer
(whether pursuant to a sale or otherwise) of all or a portion of the assets of
the Company or Nextera to an entity controlled by or under common control with
Nextera shall not be deemed to be a Change of Control and (ii) the Incorporation
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Transaction (as defined in that certain Share Exchange Agreement dated as of the
date hereof by and among Nextera and the other parties named therein) shall not
be deemed to be a Change of Control.
(b) TERMINATION DUE TO CHANGE OF CONTROL. In the event that during the
period of Executive's active employment with the Company, there is a Change of
Control, as defined above, and within six (6) months of the date upon which
Executive receives notice of the event of Change of Control, Executive's
employment is terminated by the Company without cause or by the Executive for
Good Reason (as defined below), then the Company shall provide the Executive
with the Termination Benefits described in Section 6(d). For purposes of this
Agreement, "Good Reason" shall mean, without the Executive's written consent,
the occurrence of any of the following circumstances:
(i) the assignment to the Executive of any duties substantially
inconsistent and adverse with the position of a Principal in the
Company, without regard to any change with respect to titles or
special functions (including Senior Managing Principal) that the
Executive may hold from time to time;
(ii) in the event of a Change of Control, the assignment to the
Executive of any duties substantially inconsistent and adverse with
the position in the Company that the Executive held immediately prior
to the Change of Control, or a significant adverse alteration in the
nature or status of the Executive's responsibilities or the conditions
of the Executive's employment from those in effect immediately prior
to such Change of Control;
(iii) the Company's reduction of the Executive's annual base
salary as in effect on the date hereof or as the same may be increased
from time to time except for across-the-board salary reductions
similarly affecting all management personnel of the Company;
(iv) the relocation of the Company's offices at which the
Executive is principally employed to a location more than 25 miles
from such location (or, if the office at which the Executive is
principally employed is in the Manhattan business district of New
York, New York, the relocation to a location outside the Manhattan
business district) or the Company's requiring the Executive to be
based anywhere other than the Company's offices at such location
except for required travel on the Company's business to an extent
substantially consistent with the Executive's present business travel
obligations;
(v) the Company's failure to pay to the Executive any portion of
the Executive's current compensation or to pay to the Executive any
portion of an installment of deferred compensation under any deferred
compensation program of the Company within seven (7) days of the date
such compensation is due;
(vi) the Company's failure to continue in effect any material
compensation or benefit plan in which the Executive participates,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with
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respect to such plan, or the Company's failure to continue the
Executive's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in
terms of the amount of benefits provided and the level of the
Executive's participation relative to other participants;
(vii) the Company's failure to continue to provide the Executive
with benefits substantially similar to those enjoyed by the Executive
under any of the Company's life insurance, medical, health and
accident, or disability plans in which the Executive participates, the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits, or the failure by the Company
to provide the Executive with the number of paid vacation days to
which the Executive are entitled on the basis of years of service with
the Company in accordance with the Company's normal vacation policy;
or
(viii) in the event of a Change of Control, a successor to the
Company or Nextera does not expressly assume the obligations of the
Company or Nextera, as applicable, under this Agreement.
9. REPURCHASE OPTION. Capitalized terms used in this Section 9 and not
otherwise defined in this Agreement shall have the meanings ascribed to such
terms in the Stockholders Agreement and the Nextera Operating Agreement as
amended by the First Amendment.
The Executive agrees to be bound by Section 6.4 of the Nextera
Operating Agreement and Section 4.4 of the Stockholders Agreement, subject in
each case to the provisions of this Section 9. In the event that Nextera
exercises the Repurchase Option during the period following the Effective Date
of the First Amendment and prior to expiration of the non-solicitation period
(the "Applicable Period") contained in the Executive's Non-Compete,
Non-Solicitation, Proprietary Information, Confidentiality and Inventions
Agreement (the "Non-Solicitation Agreement"), if the Executive does not breach
any provision of this Agreement or the Non-Solicitation Agreement, then the
Executive shall not be required to sell such Units to Nextera. At such time
within the Applicable Period that the Executive breaches any provision of this
Agreement or the Non-Solicitation Agreement, the Applicable Period shall
immediately terminate. At the termination of the Applicable Period (either by
way of the lapse of the applicable time period or the breach by the Executive of
any provision of this Agreement or the Non-Solicitation Agreement) the terms of
this Section 9 shall no longer apply to the Executive and the terms of Section
6.4 of the Nextera Operating Agreement or Section 4.4 of the Stockholders
Agreement, as applicable, without reference to this Section 9, shall apply to
the Executive except that the six month Repurchase Option Period shall be deemed
to have begun on the termination of the Applicable Period. At such time as the
business of Nextera is incorporated, provisions having the same effect as the
provisions of this Section 9 concerning the Repurchase Option shall apply to any
securities of the newly-incorporated entity issued to the Executive in exchange
for his Units in Nextera, provided, however, that such Repurchase Option shall
terminate upon a Qualified Initial Public Offering.
10. GENERAL.
(a) ARBITRATION OF DISPUTES. Any controversy or claim arising out
of or
12
relating to this Agreement or the breach thereof or otherwise arising out of the
Executive's employment or the termination of that employment (including, without
limitation, any claims of unlawful employment discrimination whether based on
age or otherwise) shall, to the fullest extent permitted by law, be settled by
arbitration in any forum and form agreed upon by the parties or, in the absence
of such an agreement, under the auspices of the American Arbitration Association
("AAA") in the state where Executive performs substantially all of his duties in
accordance with the Employment Dispute Resolution Rules of the AAA, including,
but not limited to, the rules and procedures applicable to the selection of
arbitrators, except that the arbitrator shall apply the law as established by
decisions of the U.S. Supreme Court and the federal and state courts sitting in
the state where Executive performs substantially all of his duties in deciding
the merits of claims and defenses under federal law or any state or federal
anti-discrimination law, and any awards to the Executive for violation of any
anti-discrimination law shall not exceed the maximum award to which the
Executive could be entitled under the applicable (or most analogous)
anti-discrimination or civil rights laws. In the event that any person or entity
other than the Executive or the Company may be a party with regard to any such
controversy or claim, such controversy or claim shall be submitted to
arbitration subject to such other person or entity's agreement. Judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitrator shall have the authority to grant the
prevailing party reasonable costs and expenses, including reasonable attorney's
fees and the costs of the arbitration. This Section 10(a) shall be specifically
enforceable. Notwithstanding the foregoing, this Section 10(a) shall not
preclude either party from pursuing a court action for the sole purpose of
obtaining a temporary restraining order or a preliminary injunction in
circumstances in which such relief is appropriate; provided that any other
relief shall be pursued through an arbitration proceeding pursuant to this
Section 10(a).
(b) INTEGRATION. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior understandings and agreements between the parties, whether oral or
written, with respect to any related subject matter.
(c) ASSIGNMENT: SUCCESSORS AND ASSIGNS, ETC. Neither the Company
nor the Executive may make any assignment of this Agreement or any interest
herein, by operation of law or otherwise, without the prior written consent of
the other party provided that the Company may assign its rights under this
Agreement without the consent of the Executive in the event that the Company
shall effect a reorganization, consolidate with or merge into any other
corporation, partnership, organization or other entity, or transfer all or
substantially all of its properties or assets to any other corporation,
partnership, organization or other entity; provided such successor is the
functional equivalent of the Company. This Agreement shall inure to the benefit
of and be binding upon the Company and the Executive, their respective
successors, executors, administrators, heirs and permitted assigns.
(d) ENFORCEABILITY. If any portion or provision of this Agreement
(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then that court shall have the power to alter such
provision to make it enforceable to the fullest extent permitted by law. The
remainder of this Agreement, or the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be
13
affected thereby, and each portion and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.
(e) WAIVER. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of any party
to require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
(f) NOTICES. Any notices, requests, demands and other
communications provided for by this Agreement shall be sufficient if in writing
and delivered in person or sent by a nationally recognized overnight courier
service or by registered or certified mail, postage prepaid, return receipt
requested, to the Executive at the last address the Executive has filed in
writing with the Company or, in the case of the Company, at its main offices,
attention of the Leadership Council, and shall be effective on the date of
delivery in person or by courier or three (3) days after the date mailed.
(g) AMENDMENT. This Agreement may be amended or modified only by
a written instrument signed by the Executive and by a duly authorized
representative of the Company.
(h) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.
11. CONSENT TO JURISDICTION.
(a) GOVERNING LAW. This contract shall be construed under and be
governed in all respects by the laws of the state where the Executive performs
substantially all of his duties, without giving effect to the conflict of laws
principles of such state.
(b) CONSENT TO JURISDICTION. To the extent that any court action
is permitted consistent with or to enforce Section 10(a) of this Agreement, the
parties hereby consent to the jurisdiction of the state and federal courts where
the Executive performs substantially all of his duties. Accordingly, with
respect to any such court action, each of the Executive, the Company and Nextera
(a) submits to the personal jurisdiction of such courts; (b) consents to service
of process; and (c) waives any other requirement (whether imposed by statute,
rule of court, or otherwise) with respect to personal jurisdiction or service of
process.
12. NEXTERA. By signing below, Nextera consents to this Agreement and
the matters provided for herein and agrees that it, together with the Company,
will be jointly and severally liable for all obligations of the Company
hereunder. Following the Incorporation Transaction (as defined in that certain
Share Exchange Agreement (the "Exchange Agreement") dated as of the date hereof
by and among Nextera and the other individuals and parties thereto), all
references herein to "Nextera" shall be deemed to include Newco (as defined in
the Exchange Agreement) as the context requires, and all references herein to
Principal Units or Nextera Class A Units shall be deemed to include Newco Class
A Common Stock as the context requires.
14
13. TERMINATION OF EMPLOYMENT WITH SIBSON & COMPANY, L.P. By signing
below, the Executive hereby elects to terminate his employment with the
Partnership as of the date hereof and the Partnership accepts such termination.
All prior employment agreements, if any, between the Executive and the
Partnership are superseded by this Agreement and as of the Effective Date are
terminated and are null and void. Executive knowingly and voluntarily releases,
acquits and forever discharges each of the Company, Nextera, the Partnership and
the Partnership's affiliates, partners, predecessors, assigns, agents,
directors, officers, employees and representatives, from any all charges,
complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses of any nature whatsoever, known or unknown,
suspected or unsuspected, foreseen or unforeseen, matured or unmatured, arising
out of or in any way related to the termination of the Executive's employment
with the Partnership, including, without limitation, all prior employment
agreements, if any, between the Executive and the Partnership.
15
INTENDING TO BE LEGALLY BOUND by this Agreement and IN WITNESS
THEREOF, the undersigned parties have executed this Agreement as of this 31st
day of August, 1998.
/s/ XXXXX XXXXXX
----------------------------
XXXXX XXXXXX
State of Residence: California
ACCEPTED:
SC/NE, LLC, a Delaware limited liability company
By: NEXTERA ENTERPRISES, L.L.C.
Its: Sole Member
/s/ XXXXXXX X. XXXXXXXXX
---------------------------------
By: Xxxxxxx X. Xxxxxxxxx
Its: Chief Financial Officer
CONSENTED AND AGREED TO:
NEXTERA ENTERPRISES, L.L.C.
/s/ XXXXXXX X. XXXXXXXXX
---------------------------------
By: Xxxxxxx X. Xxxxxxxxx
Its: Chief Financial Officer
CONSENTED AND AGREED TO
FOR PURPOSES OF SECTION 13:
SIBSON & COMPANY, L.P.
By: SIBSON & COMPANY, INC.
Its: General Partner
/s/ XXXXXXX X. XXXXXX
--------------------------------
By: Xxxxxxx X. Xxxxxx
Its: Vice President
