EXHIBIT 10.28
EMPLOYMENT AGREEMENT
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AGREEMENT dated as of October 15, 1999 between Bronnercom, LLC, a
Delaware limited liability company (the "Company"), and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Executive").
WHEREAS, the Company and the Executive desire to set forth in a written
agreement the terms and conditions under which the Executive will be employed by
and will render services to the Company;
NOW, THEREFORE, the Company and the Executive agree as follows:
1. EFFECTIVE DATE. The Effective Date of this Agreement is the
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date for commencement of employment which is October 15, 1999.
2. EMPLOYMENT PERIOD. The period during which the Company
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shall employ the Executive and the Executive shall serve the Company under this
Agreement (the "Employment Period") shall begin on the Effective Date and end on
the second anniversary of the Effective Date; provided, however, that on the
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second anniversary of the Effective Date and on each subsequent anniversary of
such date (each such anniversary hereinafter referred to as a "Renewal Date"),
the Employment Period shall be automatically extended by one year, unless at
least 60 days before a Renewal Date either party shall give notice to the other
that the Employment Period shall not be so extended.
3. POSITION AND DUTIES. During the Employment Period, the
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Executive shall serve as General Counsel and Senior Vice President, Business
Development, with the duties and responsibilities customarily assigned to such
position and such other duties and responsibilities as the Board of Directors or
the Chief Executive Officer of the Company shall from time to time assign to the
Executive.
4. FULL-TIME POSITION. During the Employment Period, and
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excluding any periods of vacation and sick leave to which the Executive is
entitled, the Executive shall devote his full business attention and time to the
business and affairs of the Company and shall use his best efforts to carry out
such responsibilities faithfully and efficiently. It shall not be considered a
violation of the foregoing for the Executive to (a) serve on corporate, civic or
charitable boards or committees, (b) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (c) manage personal
investments, so long as such activities do not materially interfere with the
performance of the Executive's responsibilities as an employee of the Company in
accordance with this Agreement.
5. COMPENSATION.
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(a) BASE SALARY. As compensation for the Executive's services
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hereunder during the Employment Period, the Company shall pay to the Executive
an annual salary (the "Base Salary") of not less than $200,000, payable at such
times and intervals as the Company pays the base salaries of its other executive
employees. The Base Salary shall be reviewed annually during the Employment
Period for possible increase. The Base Salary shall not be reduced after any
such increase, and the term "Base Salary" shall thereafter refer to the Base
Salary as so increased.
(B) ANNUAL BONUS. In addition to the Base Salary, for each
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fiscal year ending during the Employment Period the Executive shall be eligible
for an annual bonus of (the "Annual Bonus"), of up to 100% of the annual Base
Salary, the precise amount to be determined by the Chief Executive Officer
subject to approval by the Compensation Committee of the Board. Annual bonuses
are awarded for calendar year performance and are generally paid in March of the
following year, subject to the conditions precedent that the Executive is
employed on that date. If the period from the Effective Date to December 31 is
less than a full year, any Annual Bonus paid in respect of that period shall be
adjusted pro rata based upon the number of months that the Executive is employed
by the Company during such fiscal year.
(C) STOCK OPTIONS. On or prior to the Effective Date, the
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Board will authorize the grant to the Executive of options to purchase 2,500
shares of the Company's common stock (the "Options"). The Options shall be
granted under the Company's 1999 Option Plan and shall be subject to the terms
of both the 1999 Option Plan and an Option Agreement to be executed by the
Executive in connection with the grant of the Options. The Option Agreement
shall provide, among other things, that the Options are exercisable at a price
per share of $525.00 and that the Options vest over four years at the rate of
25% on the first anniversary of the grant date and 6 1/4% on each quarter
thereafter. Notwithstanding any other provisions of this Section, the applicable
Option Plan governing issuance of stock options to the Executive hereunder shall
provide that all stock options granted to the Executive shall vest and become
exercisable within ninety days after termination of employment within two years
following a Change in Control, whether by the Company without Cause or by the
Executive with Good Reason (as hereinafter defined).
(D) BENEFITS. During the Employment Period, the Executive
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shall be entitled to receive employee benefits (including without limitation
medical, life insurance and other welfare benefits and benefits under retirement
and savings plans), Company-provided parking and paid vacation, in each case to
the same extent as, and on the same terms and conditions as, other similarly
situated senior executives of the Company from time to time.
(E) EXPENSES. The Executive shall be entitled to receive
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prompt reimbursement for all reasonable expenses incurred by the Executive
during the Employment Period in carrying out his duties under this Agreement,
provided that the Executive complies with the policies, practices and procedures
of the Company for submission of expense reports, receipts, or similar
documentation of such expenses.
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6. Termination of Employment.
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(a) Termination by the Company. The Executive's employment may
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be terminated by the Company under any of the following circumstances:
(i) upon the "Disability" of the Executive, defined as
the inability of the Executive to perform his duties
hereunder on a full-time basis by reason of physical
or mental incapacity, sickness or infirmity that
continues for more than 180 days or for periods
aggregating more than 180 days during any period of
365 consecutive days;
(ii) for "Cause," as defined below; or
(iii) for any other reason (a termination without "Cause").
(b) Definition of "Cause". "Cause" means and shall be limited
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to:
(i) wrongful misappropriation of the funds or property of
the Company;
(ii) use of alcohol or illegal drugs interfering with the
performance of the Executive's obligations,
continuing after written warning of such actions;
(iii) admission, confession, indictment or plea bargain to,
or conviction of, a felony, or of any crime involving
moral turpitude, dishonesty, theft, unethical or
unlawful conduct;
(iv) commission of any willful, intentional or grossly
negligent act which could reasonably be expected to
injure the reputation, business or business
relationships of the Company or which may tend to
bring the Executive or the Company into disrepute, or
the willful commission of any act which is a breach
of the Executive's fiduciary duties to the Company;
(v) the deliberate or willful failure by the Executive
(other than by reason of the Executive's physical or
mental illness, incapacity or disability) to
substantially perform his duties with the Company and
the continuation of such failure for a period of 30
days after delivery by the Company to the Executive
of Notice specifying the scope and nature of such
failure and the Company's intention to terminate the
Executive for Cause.
(vi) commission of any act which constitutes a material
breach of the policies of the Company, including but
not limited to the disclosure of any confidential
information or trade secrets pertaining to the
Company or any of its clients.
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For purposes of this Section, any act or failure to act of the
Executive shall not be considered "willful" unless done or omitted to be done by
the Executive not in good faith and without reasonable belief that the
Executive's action or omission was in the best interest of the Company. The
determination that any of the above described events constitute Cause shall be
made by the Board in its sole discretion. The Company shall give the Executive
Notice of termination specifying which of the foregoing provisions is
applicable. The effective date of the Executive's termination of employment with
the Company (the "Date of Termination") shall be the 30th business day after
such Notice is given or such other date as the Company and the Executive shall
agree.
(c) TERMINATION BY THE EXECUTIVE. The Executive's employment
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may be terminated by the Executive under either of the following circumstances:
(i) for "Good Reason," as defined below; or
(ii) for any other reason (a termination without "Good
Reason").
(d) DEFINITION OF "GOOD REASON". "Good Reason" means
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termination at the Executive's initiative:
(i) within two years after a corporate Change in Control
(as defined in Exhibit A to this Agreement) if the
Executive's title, duties, status, reporting
relationship, authority, responsibilities or
compensation have been materially and adversely
affected; or if the Executive's principal place of
employment immediately prior to the change of control
is relocated to a location more than 50 miles from
such place of employment.
(ii) after any material failure by the Company to comply
with any provision of Section 5 of this Agreement,
unless such failure is remedied by the Company within
ten business days after receipt of Notice thereof
from the Executive.
The Executive shall give the Company Notice of termination
specifying which of the foregoing provisions is applicable and the factual basis
therefor, and if the Company fails to remedy such material failure, the Date of
Termination shall be the 30th business day after such Notice is given or such
other date as the Company and the Executive shall agree.
(e) SEVERANCE BENEFITS UPON CERTAIN TERMINATIONS. If during
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the Employment Period the Executive's employment is terminated by the Company
without Cause or by the Executive for Good Reason, the Executive shall not be
entitled to any further compensation or benefits provided for under this
Agreement except as follows:
(i) For a period of twelve months after the Date of
Termination, the Company shall continue to pay the
Executive (A) the Base Salary at the rate in effect
immediately before the Date of Termination (but, in
the case of a termination by
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the Executive for Good Reason, disregarding any
reduction thereof that was the basis for such
termination) and (B) an annual bonus amount (the
"Bonus Amount") equal to the average of the annual
bonuses paid to the Executive for the three years
immediately preceding the Date of Termination, or the
average of the annual bonuses for the year(s)
immediately preceding the Date of Termination, if the
Executive has been employed by the Company for less
than three years. If no bonus was paid to the
Executive in the year immediately preceding the Date
of Termination, the Bonus Amount shall be calculated
at 50% of the Base Salary;
(ii) The Company shall continue to provide the Executive
with group health benefits pursuant to COBRA (the
"Group Health Benefits") for twelve months after the
Date of Termination, and shall provide the Executive
with information and access to enable the Executive
to continue COBRA coverage thereafter for the maximum
permitted duration at the Executive's expense;
provided, that during any period when the Executive
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is eligible to receive any such benefits under
another employer-provided plan or a government plan,
the Group Health Benefits or substitute benefits
provided by the Company under this clause may be made
secondary to those provided under such other plan;
(iii) The Company shall pay the Executive any amounts that
have been earned but not yet paid under Section 5
hereof.
(iv) Stock options previously granted to the Executive may
become vested and exercisable as described in Section
5(c).
(v) Receipt of severance benefits is conditioned on
Executive's execution and delivery of a separation
agreement including a general release of claims, in a
form acceptable to the Company, and on Executive's
strict compliance with the Non-Competition,
Non-Solicitation and Confidentiality Agreement
substantially in the form attached hereto as Exhibit
B.
(F) ADDITIONAL SEVERANCE BENEFITS UPON TERMINATIONS AFTER
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CORPORATE CHANGE IN CONTROL. In addition to the severance benefits provided for
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in Section 6(e), if within two years after a corporate Change in Control (as
defined in Exhibit A to this Agreement) the Executive's employment is terminated
by the Company without Cause or by the Executive for Good Reason, the Executive
shall be entitled to additional severance benefits as follows: On the one-year
anniversary of the Date of Termination, the Company shall pay the Executive a
lump sum amount equal to the Base Salary and Bonus Amount calculated pursuant to
Section 6(e)(i) above.
(g) ADDITIONAL LIMITATION.
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(i) Anything in this Agreement to the contrary
notwithstanding, in the event that any compensation,
payment or distribution by
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the Company to or for the benefit of the Executive,
whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement
or otherwise (the "Severance Payments"), would be
subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended (the
"Code"), the following provisions shall apply:
(A) If the Severance Payments,
reduced by the sum of (1) the Excise Tax and
(2) the total of the Federal, state, and
local income and employment taxes payable by
the Executive on the amount of the Severance
Payments which are in excess of the
Threshold Amount, are greater than or equal
to the Threshold Amount, the Executive shall
be entitled to the full benefits payable
under this Agreement.
(B) If the Threshold Amount is less
than (x) the Severance Payments, but greater
than (y) the Severance Payments reduced by
the sum of (1) the Excise Tax and (2) the
total of the Federal, state, and local
income and employment taxes on the amount of
the Severance Payments which are in excess
of the Threshold Amount, then the benefits
payable under this Agreement shall be
reduced (but not below zero) to the extent
necessary so that the maximum Severance
Payments shall not exceed the Threshold
Amount. To the extent that there is more
than one method of reducing the payments to
bring them within the Threshold Amount, the
Executive shall determine which method shall
be followed; provided that if the Executive
fails to make such determination within 45
days after the Company has sent the
Executive Notice of the need for such
reduction, the Company may determine the
amount of such reduction in its sole
discretion.
For the purposes of this Section 6(f), "Threshold Amount"
shall mean three times the Executive's "base amount" within
the meaning of Section 280G(b)(3) of the Code and the
regulations promulgated thereunder less one dollar ($1.00);
and "Excise Tax" shall mean the excise tax imposed by Section
4999 of the Code, and any interest or penalties incurred by
the Executive with respect to such excise tax.
(ii) The determination as to which of the alternative
provisions of Section 6(f)(i) shall apply to the
Executive shall be made by PriceWaterhouseCoopers LLP
or any other nationally recognized accounting firm
selected by the Company (the "Accounting Firm"),
which shall provide detailed supporting calculations
both to the Company and the Executive within 15
business days of the Date of Termination, if
applicable, or at such earlier time as is reasonably
requested by the Company or the Executive. For
purposes of determining which of the alternative
provisions of Section 6(f)(i) shall apply, the
Executive shall be deemed to pay federal income taxes
at the highest
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marginal rate of federal income taxation applicable
to individuals for the calendar year in which the
determination is to be made, and state and local
income taxes at the highest marginal rates of
individual taxation in the state and locality of the
Executive's residence on the Date of Termination, net
of the maximum reduction in federal income taxes
which could be obtained from deduction of such state
and local taxes. Any determination by the Accounting
Firm shall be binding upon the Company and the
Executive.
(h) OTHER TERMINATIONS. If the Executive's employment is
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terminated by reason of the Executive's death or for any other reason other than
by the Company without Cause or by the Executive for Good Reason, the Executive
shall not be entitled to any compensation under this Agreement other than:
(i) Base Salary through the 90th day following the Date
of Termination in the case of the Executive's death,
and through the Date of Termination in all other
cases,
(ii) any unpaid Annual Bonus that Executive has earned
fully in accordance with Section 5(b) above, for a
fiscal year that ended before the Date of
Termination,
(iii) benefits under and subject to the terms and
conditions of any long-term disability insurance
coverage in the case of termination because of
Disability, and
(iv) vested benefits, if any, required to be paid or
provided by law.
7. NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY
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AGREEMENT. As a condition to his employment, on or before the Effective Date the
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Executive agrees to execute and deliver a Non-Competition, Non-Solicitation and
Confidentiality Agreement substantially in the form attached hereto as Exhibit
B.
8. NO MITIGATION. In no event shall the Executive be obligated
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to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and, except as specifically provided in Section 6(e)(ii) (health benefits)
above, such amounts shall not be reduced, regardless of whether the Executive
obtains other employment.
9. NOTICES.
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(a) Each notice, demand, request, consent, report, approval or
communication (hereinafter "Notice") which is or may be required to be given by
any party to the other party in connection with this Agreement shall be in
writing and given by facsimile, personal delivery, receipted delivery services,
or by certified mail, return receipt requested, prepaid and properly addressed
to the other party as shown below.
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(b) Notices shall be effective on the date sent via facsimile,
the date delivered personally or by receipted delivery service, or three (3)
days after the date mailed:
If to the Company: Bronnercom, LLC
Prudential Tower
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Executive: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Or at the residence address most
recently filed with the Company.
(c) Each party may designate by Notice to the other a new
address to which any Notice may thereafter be given.
10. ENTIRE AGREEMENT. This Agreement shall constitute the
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entire agreement of the parties with respect to the subject matter hereof and
shall supersede all prior agreements whether oral or written with the Company
and its predecessor entities with respect to the subject matter hereof.
11. SUCCESSORS AND ASSIGNS
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(a) This Agreement is personal to the Executive and shall not
be assignable by the Executive without the prior written consent of the Company.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) The Company may assign this Agreement to any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company that
expressly agrees to assume and perform this Agreement in the same manner and to
the same extent that the Company would have been required to perform it if no
such assignment had taken place, and "Company" shall include any such successor
that assumes and agrees to perform this Agreement, by operation of law or
otherwise.
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12. MISCELLANEOUS.
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(a) This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without reference
to principles of conflict of laws.
(b) This Agreement may not be amended or modified except by a
written agreement executed by the parties hereto.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If any provision of this Agreement shall be held
invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.
(d) The Executive's or the Company's failure to insist upon
strict compliance with any provision of, or to assert any right under, this
Agreement shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement.
(e) The headings contained in this Agreement are for
convenience only and in no manner shall be construed as part of this Agreement.
(f) This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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(g) When required by the context, references to "the "Company"
in this Agreement shall mean or shall include Bronnercom, LLC, its successors
and assigns (subject to the provisions of Section 11(b), its predecessors and
its Affiliates. Affiliates are companies that control, that are controlled by,
or are under common control with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Co.
IN WITNESS WHEREOF, the Executive and the Company have executed this
Agreement as of the day and year first above written.
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
BRONNERCOM, LLC
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
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EXHIBIT A
DEFINITION OF "CHANGE IN CONTROL"
"CHANGE IN CONTROL" shall mean any of the following:
(a) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
(other than the Company, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Company or any of its
subsidiaries), together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing twenty-five percent (25%) or more of either (A) the
combined voting power of the Company's then outstanding securities
having the right to vote in an election of the Company's Board ("Voting
Securities") or (B) the then outstanding shares of Company's common
stock, par value $0.01 per share ("Common Stock") (other than as a
result of an acquisition of securities directly from the Company); or
(b) persons who, as of the Commencement Date, constitute the
Company's Board (the "Incumbent Directors") 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, provided that any person becoming a director of
the Company subsequent to the Commencement Date shall be considered an
Incumbent Director if such person's election was approved by or such
person was nominated for election by a vote of at least a majority of
the Incumbent Directors; but provided further, that any such person
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of members of the
Board or other actual or threatened solicitation of proxies or consents
by or on behalf of a person other than the Board, including by reason
of agreement intended to avoid or settle any such actual or threatened
contest or solicitation, shall not be considered an Incumbent Director;
or
(c) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company where the stockholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as
such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate more than fifty
percent (50%) of the voting shares of the Company issuing cash or
securities in the consolidation or merger (or of its ultimate parent
corporation, if any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of
the assets of the Company or (C) any plan or proposal for the
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have
EXHIBIT A - 1
occurred for purposes of the foregoing clause (a) solely as the result of an
acquisition of securities by the Company which, by reducing the number of shares
of Common Stock or other Voting Securities outstanding, increases the
proportionate number of shares beneficially owned by any person to twenty-five
percent (25%) or more of either (A) the combined voting power of all of the then
outstanding Voting Securities or (B) Common Stock; provided, however, that if
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any person referred to in this sentence shall thereafter become the beneficial
owner of any additional shares of Voting Securities or Common Stock (other than
pursuant to a stock split, stock dividend, or similar transaction or as a result
of an acquisition of securities directly from the Company) and immediately
thereafter beneficially owns twenty-five percent (25%) or more of either (A) the
combined voting power of all of the then outstanding Voting Securities or (B)
Common Stock, then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause (a).
EXHIBIT A - 2