EXHIBIT 10.8
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▇▇▇▇▇▇ COMMUNICATIONS, LLC
▇▇▇▇ ▇▇▇▇ EMPLOYMENT AGREEMENT
This Agreement is made by and between ▇▇▇▇▇▇ Communications, LLC (the
"Company") and ▇▇▇▇ ▇▇▇▇ ("Executive") as of July 13, 1999.
1. Duties and Scope of Employment.
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(a) Positions; Commencement Date; Duties. Executive's employment with
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the Company pursuant to this Agreement shall commence on July 26, 1999 (the
"Commencement Date"). As of the Commencement Date, the Company shall employ the
Executive as the Chief Financial Officer of the Company. The period of
Executive's employment hereunder is referred to herein as the "Employment Term."
During the Employment Term, Executive shall render such business and
professional services in the performance of his duties, consistent with
Executive's position within the Company, as shall reasonably be assigned to him
by the Chief Executive Officer of the Company (the "CEO").
(b) Obligations. During the Employment Term, Executive shall devote
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his full business efforts and time to the Company. Executive agrees, during the
Employment Term, not to actively engage in any other employment, occupation or
consulting activity for any direct or indirect remuneration without the prior
approval of the CEO; provided, however, that Executive may serve in any
capacity with any civic, educational or charitable organization without the
approval of the CEO.
2. Employee Benefits.
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(a) General. During the Employment Term, Executive shall be eligible
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to participate in the employee benefit plans and insurance maintained by the
Company that are applicable to other senior management to the full extent
provided for under those plans. Promptly following the date hereof, the Company
shall provide Executive with information regarding such plans and insurance.
The Company reserves the right to cancel or change its benefits plans and
programs it offers to its employees at any time.
(b) Relocation Expense Reimbursement. The Company will reimburse
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Executive for the following reasonable relocation costs:
(i) Two "house-hunting" trips to Santa Barbara, California,
including airfare, hotel accommodations and related costs for the family.
(ii) Transaction costs associated with buying Executive's new
residence (closing costs, inspections, title insurance, brokerage and related
fees, etc.).
(iii) Transaction costs associated with selling Executive's old
residence (closing costs, inspections, title insurance, brokerage and related
fees, etc.).
(iv) Moving household furnishings, personal effects (including
packing and unpacking of household furnishings and personal effects).
(v) Up to three months temporary storage of household
furnishings and personal effects if necessary.
(vi) Purchase of replacement household electrical appliances
(110 volts), not to exceed $5,000
(c) Temporary Living Expenses; Travel. The Company will pay for
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Executive's temporary living costs until the earlier of (i) such time as the
Executive permanently relocates to Santa Barbara, California, or (ii) four
months from the Commencement Date. Such costs will include out of pocket living
expenses such as rent, meals, automotive rental and one round trip airfare per
month for the Executive to return to England.
(d) Relocation Bridge Loan. In connection with the transfer of
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Executive's principal place of employment to Santa Barbara, California, the
Company shall provide Executive with an six month (6) month interest-free
mortgage loan in an amount to be determined by the president of the Company for
purposes of Executive's acquisition of a new principal residence (the "Loan").
The Executive should repay the Loan upon receipt of the proceeds on the sale of
Executives residence in England. The Loan shall be subject to, and governed by,
the terms and conditions of a loan agreement and mortgage between the Executive
and the Company attached hereto as Exhibit A (the "Loan Agreement"). The
Company shall retain a mortgage security interest in the residence during the
term of the Loan. The Loan is intended to satisfy the Requirements of Proposed
Treasury Regulation Section 1.7872-5T(c)(1) and the Executive and the Company
agree to execute such documents as are necessary to comply therewith. The
Company shall pay Executive an additional cash amount to offset fully any income
tax liability incurred by Executive under Section 7872 of the Internal Revenue
Code of 1986, as amended or any similar or successor statute with respect to any
such note, such that the after-tax cost to Executive with respect to interest on
the note shall be zero dollars ($0).
(e) Tax Assistance. The Company will pay or reimburse Executive for
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expenses incurred by Executive in connection with his 1999 tax planning and
filing.
3. At-Will Employment. Executive and the Company understand and
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acknowledge that Executive's employment with the Company constitutes "at-will"
employment. Subject to the Company providing severance benefits as specified
herein, Executive and the Company acknowledge that this employment relationship
may be terminated at any time, upon written notice to the other party, with or
without good cause or for any or no cause, at the option either of the Company
or Executive.
4. Compensation.
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(a) Base Salary. While employed by the Company, the Company shall pay
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the Executive as compensation for his services a base salary at the annualized
rate of $200,000 (the "Base Salary"). Such salary shall be paid periodically in
accordance with normal Company payroll practices and subject to the usual
required withholding. The Base Salary shall be reviewed annually for possible
raises, as determined by the Board in its discretion, in light of the Company's
performance and Executive's performance of his duties.
(b) Bonuses.
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(i) Signing Bonus. As of the Effective Date, the Company
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agrees to pay Executive a one-time signing bonus in the amount of $15,000, less
applicable tax withholding.
(ii) Target Bonus. Executive shall be eligible to receive an
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annual target bonus, paid in equal quarterly installments, equal to $25,000 (the
"Target Bonus"). The Target Bonus shall be based upon performance criteria
specified by the CEO from time to time. The Executive shall be guaranteed the
initial minimum $12,500 Target Bonus for the first annual period.
Notwithstanding the foregoing, the Company's obligation to make any quarterly
installment payment, whether during the first or any subsequent annual period,
shall be dependent upon Executive's employment with the Company through the end
of such quarter. For purposes of the Target Bonus, the annual period shall
commence on the Commencement Date (or anniversary thereof) and continue for a
one year period.
(c) Equity Compensation.
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(i) Membership Unit Option. The Company will recommend to
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the Board of Managers (the "Board") that the Executive receive a nonstatutory
membership unit option to purchase 270,000 Class A units of the Company's then
issued and outstanding membership units at a price equal to the fair market
value as reasonably determined by the Board prior to the Commencement Date (the
"Unit Option"). The Unit Option shall be for a term of ten years (or shorter
upon termination of employment or consulting relationship with the Company) and,
subject to accelerated vesting as set forth elsewhere herein, shall be vested
with respect to twenty-five percent (25%) as of the first anniversary of the
Commencement Date and shall thereafter vest at the rate of 1/36th of the
remaining seventy-five percent (75%) on the first day of each month following
the first anniversary of the Commencement Date. Such vesting shall be
conditioned upon Executive's continued employment or consulting relationship
with the Company as of each vesting date. Except as specified otherwise herein,
the Unit Option shall be subject to the terms, definitions and provisions of the
Company's 1999 Unit Plan (the "Unit Plan") and the standard form of unit option
agreement thereunder to be entered into by and between Executive and the Company
(the "Option Agreement"), both of which documents are to be approved by the
Board.
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(d) Severance.
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(i) Termination Without Cause. In the event that Executive's
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employment with the Company is involuntarily terminated by the Company without
"Cause" or is "Constructively Terminated" (both as defined below), then (i)
Executive's Unit Option shall have its vesting accelerated as to (A) if such
termination occurs prior to the first anniversary of the Commencement Date
twenty-five percent (25%) of the units subject to the Unit Option, or (B) if
such termination occurs following the first anniversary of the Commencement Date
that number of units subject to the Unit Option that would have become vested
had Executive remained employed by the Company for an additional six (6) months;
(ii) Executive shall receive a lump-sum payment equal to Nine Months of his Base
Salary and Target Bonus, less applicable withholding, promptly following such
termination of employment; and (iii) Executive and his covered dependents shall
receive coverage under the Company's health and other welfare benefit plans for
a period of nine (9) months, or, if and to the extent ineligible under the terms
of such plans, Executive shall receive an amount equal to the Company's costs of
providing such benefits.
For the purposes of this Agreement, "Cause" is defined as: (i) an act of
dishonesty made by Executive in connection with his responsibilities as an
employee of the Company, (ii) Executive's conviction of, or plea of nolo
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contendere to, a felony, (iii) Executive's gross misconduct, or (iv) Executive's
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breach or failure to perform his employment duties as established by the CEO
periodically and failure to cure such breach within thirty (30) days after
receipt of written notice of breach from the Company.
For this purpose, "Constructive Termination" is defined as the resignation
of Executive within sixty (60) days following (i) the assignment to Executive of
duties incommensurate with his status as Chief Financial Officer, or any
material reduction of the Executive's duties, authority, responsibilities or
title, relative to the Executive's duties, authority, responsibilities or title
as in effect immediately prior to such reduction, except if agreed to in writing
by the Executive; (ii) a material reduction by the Company in the Base Salary,
as in effect immediately prior to such reduction; or (iii) the relocation of the
Executive to a facility or a location more than thirty-five (50) miles from the
Executive's then present location, without the Executive's written consent.
For the purposes of this Agreement, "Change of Control" is defined as:
(1) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) becomes the "beneficial owner"
(as defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the total voting
power represented by the Company's then outstanding voting securities; or
(2) The consummation of a merger or consolidation of the Company with
any other entity, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; or
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(e) the consummation of the sale or disposition by the Company of all
or substantially all the Company's assets.
5. Change of Control Vesting Acceleration. In the event of a Change of
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Control, a number of membership units equal to 50% of Executive's entire Unit
Option as of the Commencement Date, together with 50% of the units or shares of
any additional option grants Executive may receive from the Company while
employed hereunder, shall vest and become exercisable.
6. Total Disability of Executive. Upon Executive's becoming permanently
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and totally disabled (as defined in accordance with Internal Revenue Code
Section 22(e)(3) or its successor provision) during the term of this Agreement,
employment hereunder shall automatically terminate, all payments of compensation
by the Company to Executive hereunder shall immediately terminate (except as to
amounts already earned) and all vesting of the Executive's unit options shall
immediately cease.
7. Death of Executive. If Executive dies while employed by the Company
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pursuant to this Agreement, all payments of compensation by the Company to
Executive hereunder shall immediately terminate (except as to amounts already
earned, which shall be paid to Executive's estate) and all vesting of the
Executive's unit options shall immediately cease.
8. Assignment. This Agreement shall be binding upon and inure to the
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benefit of (a) the heirs, executors and legal representatives of Executive upon
Executive's death and (b) any successor of the Company. Any such successor of
the Company shall be deemed substituted for the Company under the terms of this
Agreement for all purposes. As used herein, "successor" shall include any
person, firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation payable pursuant to this
Agreement shall be assignable or transferable except through a testamentary
disposition or by the laws of descent and distribution upon the death of
Executive following termination without cause. Any attempted assignment,
transfer, conveyance or other disposition (other than as aforesaid) of any
interest in the rights of Executive to receive any form of compensation
hereunder shall be null and void.
9. Notices. All notices, requests, demands and other communications
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called for hereunder shall be in writing and shall be deemed given if (i)
delivered personally, (ii) one (1) day after being sent by Federal Express or a
similar commercial overnight service, or (iii) three (3) days after being mailed
by registered or certified mail, return receipt requested, prepaid and addressed
to the parties or their successors in interest at the following addresses, or at
such other addresses as the parties may designate by written notice in the
manner aforesaid:
If to the Company: ▇▇▇▇▇▇ Communications, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
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If to Executive: ▇▇▇▇ ▇▇▇▇
c/▇ ▇▇▇▇▇▇ Communications, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
10. Severability. In the event that any provision hereof becomes or is
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declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
11. Proprietary Information Agreement. Executive agrees to enter into the
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Company's standard Proprietary Information Agreement (the "Proprietary
Information Agreement") upon commencing employment hereunder.
12. Entire Agreement. This Agreement, the Unit Plan, the Option
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Agreement, and the Proprietary Information Agreement represent the entire
agreement and understanding between the Company and Executive concerning
Executive's employment relationship with the Company, and supersede and replace
any and all prior agreements and understandings concerning Executive's
employment relationship with the Company.
13. Arbitration and Equitable Relief.
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(a) Except as provided in Section 13(c) below, Executive agrees that
any dispute or controversy arising out of, relating to, or in connection with
this Agreement, or the interpretation, validity, construction, performance,
breach, or termination thereof shall be settled by arbitration to be held in
Santa ▇▇▇▇▇▇▇ County, California, in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association (the "Rules"). The arbitrator may grant injunctions or other relief
in such dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction.
(b) The arbitrator shall apply California law to the merits of any
dispute or claim, without reference to rules of conflict of law. The
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. Executive hereby expressly
consents to the personal jurisdiction of the state and federal courts located in
California for any action or proceeding arising from or relating to this
Agreement and/or relating to any arbitration in which the parties are
participants.
(c) Executive understands that nothing in Section 13 modifies
Executive's at-will status. Either the Company or Executive can terminate the
employment relationship at any time, with or without cause.
(d) EXECUTIVE HAS READ AND UNDERSTANDS SECTION 13, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH, OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
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CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE
RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH
OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND
FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF
EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR
INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND
DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR
MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS
ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR
STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE
SECTION 201, et seq;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
14. Legal Fee Reimbursement. The Company agrees to pay Executive's
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reasonable legal fees associated with entering into this Agreement upon
receiving invoices for such services.
15. No Oral Modification, Cancellation or Discharge. This Agreement may
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only be amended, canceled or discharged in writing signed by Executive and the
Company.
16. Withholding. The Company shall be entitled to withhold, or cause to
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be withheld, from payment any amount of withholding taxes required by law with
respect to payments made to Executive in connection with his employment
hereunder.
17. Governing Law. This Agreement shall be governed by the laws of the
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State of California.
18. Effective Date. This Agreement is effective July 13, 1999.
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19. Acknowledgment. Executive acknowledges that he has had the
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opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below:
▇▇▇▇▇▇ COMMUNICATIONS, LLC
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
EXECUTIVE
/s/ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇
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Exhibit A
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Loan Agreement
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