Exhibit 10.33
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this 2nd
day of April, 2001, (the "Effective Date") but shall take effect
as of the Effective Date, as defined below, by and between
Digital Teleport, Inc., a Missouri corporation with its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Company"), and ▇▇▇▇ ▇▇▇▇▇▇▇, an individual
residing at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the
"Employee").
RECITALS
The Company, a wholly-owned subsidiary of DTI Holdings, Inc.
("Holdings"), desires to employ the Employee, and the Employee
desires to be employed by the Company. In consideration of the
mutual covenants and promises contained herein, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties agree
as follows:
1. TERM OF EMPLOYMENT. The Term (the "Initial Term") of
this Agreement shall commence on the Effective Date and, subject
to the further provisions of this Agreement, shall end on
December 31, 2004, provided, however, this Agreement shall be
automatically renewed for successive one (1) year periods
("Renewal Term") unless, at least ninety (90) days prior to the
expiration of the Initial Term or any Renewal Term, either party
gives written notice to the other party specifically electing to
terminate this Agreement at the end of the Initial Term or any
such Renewal Term.
2. TITLE; CAPACITY. The Employee shall serve as President
and Chief Executive Officer of the Company or in such other
position as the Company's Board of Directors (the "Board") may
determine from time to time. The Employee shall be subject to
the supervision of, and shall have such authority as is delegated
to him by, the Board. The Employee shall also be elected to the
Board and to the board of directors of Holdings for the
Employment Period.
The Employee hereby accepts such employment and agrees
to undertake the duties and responsibilities inherent in such
position and such other duties and responsibilities as the Board
or its designee shall from time to time reasonably assign to him.
The Employee agrees to devote his entire business time, attention
and energies to the business and interests of the Company (and
its affiliates as required by the Company's investments and the
Employee's positions therein) during the Employment Period. The
Employee agrees to abide by the rules, regulations, instructions,
personnel practices and policies of the Company and any changes
therein which may be adopted from time to time. The Employee
acknowledges receipt of copies of all such rules and policies
committed to writing as of the date of this Agreement.
3. COMPENSATION AND BENEFITS.
a. SALARY. The Company shall pay the employee an
annual base salary of Two Hundred Twenty Five Thousand Dollars
($225,000.00) for the one-year period
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commencing on the Effective Date, with such base salary payable
in accordance with the Company's usual payment practices.
Such base salary shall be subject to adjustment thereafter as
determined by the Board; provided, however, that such base
salary shall not be decreased below Two Hundred Twenty Five
Thousand Dollars ($225,000.00).
b. FRINGE BENEFITS. The Employee shall be entitled
to participate in all benefit programs that the Company
establishes and makes available to its employees, if any, to the
extent that Employee's position, tenure, salary, age, health and
other qualifications make him eligible to participate.
Notwithstanding the foregoing, Employee shall be entitled to
three weeks of vacation in each calendar year of the Employment
Period.
c. REIMBURSEMENT OF EXPENSES. The Company shall
reimburse the Employee for all reasonable travel, entertainment
and other expenses incurred or paid by the Employee in connection
with, or related to, the performance of his duties,
responsibilities or services under this Agreement, upon
presentation by the Employee of documentation, expense
statements, vouchers and/or such other supporting information as
the Company may request, PROVIDED, HOWEVER, that the amount
available for such travel, entertainment and other expenses may
be fixed in advance by the Board. Upon prior approval by the
Board, the Company shall reimburse Employee, or directly pay for,
dues and membership fees for industry organizations relevant to
Employee's duties.
d. ANNUAL INCENTIVE COMPENSATION. The Employee shall
be eligible for an annual bonus, based on the Company's
achievement of annual revenue and EBITDA targets mutually agreed
to by the Employee and the Board. The Employee shall be eligible
for a bonus of one-quarter of his annual base salary on the
complete achievement of each of the revenue and EBITDA targets.
No bonus shall be payable with respect to a target unless at
least 85% of such target is achieved; the bonus for a target
shall be prorated for achieving at least 85% of such target. No
additional bonus shall be payable to the Employee for exceeding a
target, unless both targets are exceeded; in such case, Employee
shall be eligible for an additional bonus equal to the increment
of the average percentage (such increment shall not, however,
exceed 100%) of both targets above 100%. For illustrative
purposes, if the Company achieves 110% of the revenue target, and
130% of the EBITDA target, the Employee shall earn a bonus of 70%
of base salary (25% of base salary for achieving the revenue
target, 25% of base salary for achieving the EBITDA target, and
20% of base salary based on the average of the revenue and EBITDA
targets above 100%). The annual bonus shall be determined as of
the end of each calendar year in the Employment Period, and shall
be due and payable as soon as practicable after the end of such
calendar year.
e. OPTIONS. Employee will receive a grant of options
to purchase up to 1,000,000 shares of Holdings' common stock.
Such options shall have the features set forth in EXHIBIT A
hereto. The grant date shall be as soon as reasonably
practicable after the Effective Date, not to exceed four (4)
months.
f. TAXES. All compensation shall be subject to
customary withholding taxes and other employment and usage taxes
as required with respect thereto.
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4. EMPLOYMENT TERMINATION. The employment of the Employee
by the Company pursuant to this Agreement shall terminate upon
the occurrence of any of the following:
a. Expiration of the Employment Period in accordance
with Section 1;
b. At the election of the Company, for "Cause",
immediately upon written notice by the Company to the Employee.
"Cause" for such termination shall include, but not limited to,
the following:
i. Dishonesty of the Employee with respect to
the Company;
ii. Willful misfeasance or nonfeasance of duty
intended to injure or having the effect of injuring the
reputation, business or business relationships of the Company or
its respective officers, directors or employees;
iii. Upon a charge by a governmental entity
against the Employee of any crime involving moral turpitude which
is demonstrably and materially injurious to the Company or upon
the filing of any civil action involving a charge of
embezzlement, theft, fraud or other similar act which is
demonstrably and materially injurious to the Company;
iv. Willful or prolonged absence from work by the
Employee (other than by reason of disability due to physical or
mental illness) or failure, neglect or refusal by the Employee to
perform his duties and responsibilities without the same being
corrected upon ten (10) days prior written notice; or
v. Breach by the Employee of any of the
covenants contained in this Agreement.
vi. Failure of the Employee to meet mutually
agreed-upon targets and objectives reasonably within Employee's
control.
c. Immediately upon the death or disability of the
Employee. As used in this Agreement, the term "disability"
shall mean the inability of the employee, due to a physical or
mental disability, for a period of 90 days, whether or not
consecutive, during any 360 day period to perform the services
contemplated under this Agreement. A determination of disability
shall be made by a physician satisfactory to the Company.
d. At the election of the Company or the Employee,
with or without cause upon 90 days written notice by one party to
the other.
5. EFFECT OF TERMINATION.
a. TERMINATION FOR CAUSE OR AT ELECTION OF EMPLOYEE.
In the event the Employee's employment is terminated for cause
pursuant to Section 4.b. (excluding Section ▇.▇.▇▇.), or at the
election of the Employee pursuant to Section 4.d., the Company
shall pay to the Employee the compensation and benefits otherwise
payable to him under Section 3 through the
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last day of his actual employment by the Company. In the event
the Employee's employment is terminated for cause pursuant to Section
▇.▇.▇▇., the Company shall pay to the Employee six months' of base
salary, payable over a six month period in accordance with the Company's
usual payment practices, and shall continue to keep in place all
medical plans with respect to Employee for a six month period
after termination with the same level of coverage, upon the same
terms and otherwise to the same extent as such plans shall have
been in effect immediately prior to the date of Employee's
termination.
b. TERMINATION FOR DEATH OR DISABILITY. If the
Employee's employment is terminated by death or because of
disability pursuant to Section 4(c), the Company shall pay to the
estate of the Employee or to the Employee, as the case may be,
the compensation which would otherwise be payable to the Employee
up to the end of the month in which the termination of his
employment because of death or disability occurs.
c. TERMINATION AT ELECTION OF COMPANY. In the event
the Employee's employment is terminated at the election of the
Company pursuant to Section 4(d), the Company shall pay to the
Employee one year's base salary, payable over a one-year period
in accordance with the Company's usual payment practices.
Further, the Company shall continue to keep in place all medical
plans with respect to Employee for a one year period after
termination with the same level of coverage, upon materially the
same terms and otherwise to the same material extent as such
plans shall have been in effect immediately prior to the date of
Employee's termination.
d. EFFECT OF TERMINATION ON ANNUAL INCENTIVE
COMPENSATION. In the event the Employee's employment is
terminated pursuant to Section 4.d. by either the Company or the
Employee, before the end of a calendar year, the Employee shall
be entitled to a prorated portion of the annual incentive
compensation provided by Section 3.d., based upon actual results
achieved and the portion of the year in which Employee was
employed by the Company.
c. SURVIVAL. The provisions of Sections 6 and 7
shall survive the termination of this Agreement.
6. NON-COMPETE.
a. Employee covenants and agrees that Employee shall
not, directly or indirectly, as a principal, employee, partner,
consultant, agent of otherwise, compete or assist in competitive
activity with the Company, within the areas in which the Company
then operates, during the Employment Period and for a period of
twelve (12) consecutive months immediately following the
Employment Period (the period of time during with Employee is
restricted from such competition pursuant to the foregoing
provisions is hereinafter referred to as the "Restricted Period")
without the express prior written consent of the Company;
provided, however, that the running of the Restricted Period
shall be tolled during any period of time in which Employee
violates the provisions herein. Without limiting the generality
of what might constitute competitive activity, Employee
acknowledges and agrees that any fiber-optic competitive access
provider, competitive or incumbent local exchange carrier or
inter-exchange carrier shall constitute competitive activity.
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b. During the Restricted Period, Employee shall not
directly or indirectly, alone or in concert with others, solicit
or accept the business of any customer (or any person or entity
whom the Company or any of its employees or agents has solicited
as a prospective customer) ("Customer") (nor provide any services
or any Customer) which was a Customer of the Company at any time
during the course of Employee's employment by the Company.
c. During the Restricted Period, Employee shall not,
directly or indirectly, alone or in concert with others, solicit
or encourage any employee of the Company, or an employee of any
person or entity with which the Company has an agreement through
which the Company and the person or entity are to act in concert
with respect to the business of the Company (a "Consultant"), to
leave their respective employment or hire any employee of the
Company or any person who was an employee of the Company at any
time within the one (1) year period prior to the date first above
written.
d. During the Restricted Period, Employee shall not,
directly or indirectly, alone or in concert with others,
encourage any consultant which is then under contract with the
company to cease to work for the Company or any Consultant.
e. If any restriction set forth in this Section 6 is
found by any court of competent jurisdiction to be unenforceable
because it extends for too long a period of time or over too
great a range of activities or in too broad a geographic area, it
shall be interpreted to extend only over the maximum period of
time, range of activities or geographic area as to which it may
be enforceable.
f. The restrictions contained in this Section 6 are
necessary for the protection of the business and goodwill of the
Company and are considered by the Employee to be reasonable for
such purpose. The Employee agrees that any breach of this
Section 6 will cause the Company substantial and irrevocable
damage and therefore, in the event of any such breach, in
addition to such other remedies which may be available, the
Company shall have the right to seek specific performance and
injunctive relief. The prevailing party in a legal proceeding to
remedy a breach under this Agreement shall be entitled to receive
its reasonable attorney's fees, expert witness fees, and out-of-
pocket costs incurred in connection with such proceeding, in
addition to any other relief it may be granted.
7. PROPRIETARY INFORMATION AND DEVELOPMENTS
a. PROPRIETARY INFORMATION.
i. Employee covenants and agrees that (A) during
the Employment Period, except pursuant to appropriate safeguards
on confidentiality and only in connection with the business of
the Company, and (B) after the Employment Period, on any basis
for any reason, Employee shall not use or disclose to anyone
except authorized personnel of the Company, whether or not for
his benefit or otherwise, any confidential matters (collectively,
"Confidential Matters"), concerning the Company or its suppliers,
consultants, agents or clients, whether former, current or
potential (collectively, the "Clients"), including without
limitation, all
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confidential technical information of the
Company, secrets, trade secrets, formulas, proprietary software,
copyrights, Client lists, lists of employees, confidential
evaluations, mailing lists, details of consultant contracts,
pricing policies, sales data and reports, margins, operational
methods and processes, marketing plans or strategies, business
acquisition plans, new personnel acquisition plans, financial
information and other confidential business affairs, learned by
Employee concerning the Company, its Clients, or a third party,
including without limitation, any subsidiaries, partners,
affiliates, shareholders, employees, lenders, suppliers,
consultants, agents or joint venture partners of the Company
(collectively, "Affiliates").
ii. Employee further covenants and agrees that
(A) all confidential memoranda, notes, sketches, lists
(including, without limitation, mailing and customer lists),
records, other confidential documents and computer diskettes (and
all copies thereof) made or compiled by Employee or made
available to him concerning the Company, its Clients and any
Affiliates are the sole property of the Company, and (B) if such
documents are in the possess or control of Employee, Employee
shall deliver them, without retaining any copies thereof, to the
Company promptly at the time of Employee's termination of
employment or at any other time upon request by the Company.
b. DEVELOPMENTS.
i. Employee will make full and prompt disclosure
to the Company of all inventions, improvements, discoveries,
methods, developments, software, and works of authorship, whether
patentable or not, which are created, made, conceived or reduced
to practice by the Employee or under his direction or jointly
with others during his employment by the Company, whether or not
during normal working hours or on the premises of the Company
(all of which are collectively referred to in this Agreement as
"Developments").
ii. Employee agrees to assign and does hereby
assign to the Company (or any person or entity designated by the
Company) all his right, title and interest in and to all
Developments and all related patents, patent applications,
copyrights and copyright applications. However, this Section
7.b.ii. shall not apply to Developments which do not relate to
the present or planned business or research and development of
the Company and which are made and conceived by the Employee not
during normal working hours, not on the Company's premises and
not using the Company's tools, devices, equipment or Proprietary
Information.
iii. Employee agrees to cooperate fully with the
Company, both during and after his employment with the Company,
with respect to the procurement, maintenance and enforcement of
copyrights and patents (both in the United States and foreign
countries) relating to Developments. Employee shall sign all
papers, including, without limitation, copyright applications,
patent applications, declarations, oaths, formal assignments,
assignment of proprietary rights, and powers of attorney, which
the Company may deem necessary or desirable in order to protect
its rights and interests in any Development.
c. OTHER AGREEMENTS. Employee hereby represents that
he is not bound by the terms of any agreement with any previous
employer or other party to refrain from using or disclosing any
trade secret or confidential or proprietary information in the
course of his
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employment with the Company or to refrain from
competing, directly or indirectly, with the business of such
previous employer or any other party. Employee further
represents that his performance of all the terms of this
Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by him in confidence or
in trust prior to his employment with the Company. Employee
further certifies that Employee will not disclose or use, during
Employee's employment by the Company, any confidential
information that Employee acquired as a result of any previous
employment or under a contractual obligation of confidentiality
before Employee's employment by the Company.
d. COMPANY'S RIGHT TO NOTIFY SUBSEQUENT EMPLOYERS.
The Company may do all permissible things, and take all
permissible action, necessary or advisable, in the Company's
discretion, to protect its rights under this Section 7, including
without limitation notifying any subsequent employer of the
Employee of the existence of (and furnishing to any such
employer) the provisions of this Agreement. During the
Restricted Period, Employee shall inform each new employer, prior
to accepting employment, of the existence of this Agreement and
provide that employer with a copy of it.
8. RECOVERY OF COSTS AND FEES. The Employee agrees that
if Employee breaches or threatens to breach this Agreement,
Employee shall be liable for any attorneys' fees and costs
incurred by the Company in enforcing its rights under this
Agreement in the event that a court determines that Employee has
breached this Agreement or if the Company obtains injunctive
relief against the Employee.
9. NOTICES. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon
personal delivery or upon deposit in the United States Post
Office, by registered or certified mail, postage prepaid,
addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate
to the other in accordance with this Section 9.
10. PRONOUNS. Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns shall include the plural, and vice versa.
11. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties and supersedes all prior
agreements and understandings, whether written or oral, relating
to the subject matter of this Agreement.
12. AMENDMENT. This Agreement may be amended or modified
only by a written instrument executed by both the Company and the
Employee.
13. GOVERNING LAW. This Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State
of Missouri, without giving effect to that State's conflict of
laws provisions.
14. CHOICE OF VENUE. All actions or proceedings with
respect to this Agreement shall
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be instituted only in any state
or federal court sitting in St. Louis County, Missouri, and by
execution and delivery of this Agreement, the parties irrevocably
and unconditionally subject to the jurisdiction (both subject
matter and personal) of each such court and irrevocably and
unconditionally waive: (a) any objection that the parties might
now or hereafter have to the venue of any of such court; and (b)
any claim that any action or proceeding brought in any such court
has been brought in an inconvenient forum.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of both parties and their
respective successors and assigns, including any corporation with
which or into which the Company may be merged or which may
succeed to its assets or business, provided, however, that the
obligations of the Employee are personal and shall not be
assigned by him.
16. WAIVER. No delay or omission by the Company in
exercising any right under this Agreement shall operate as a
waiver of that or any other right. A waiver or consent given by
the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any
right on any other occasion.
17. CAPTIONS AND HEADINGS. The captions of the sections of
this Agreement are for convenience of reference only and in no
way define, limit or affect the scope or substance of any section
of this Agreement.
18. SEVERABILITY. In case any provision of this Agreement
shall be invalid, illegal or otherwise unenforceable, the
validity, legality and enforceability of the remaining provisions
shall in no way be affected or impaired thereby.
19. COUNTERPARTS. This Agreement may be executed in a
number of counterparts and all of such counterparts executed by
the Company or the Employee, shall constitute one and the same
agreement, and it shall not be necessary for all parties to
execute the same counterpart hereof.
20. FACSIMILE SIGNATURES. The parties hereby agree that,
for purposes of the execution of this Agreement, facsimile
signatures shall constitute original signatures.
20. INCORPORATION BY REFERENCE. The preamble and recitals
to this Agreement are hereby incorporated by reference and made a
part hereof.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year set forth above.
DIGITAL TELEPORT, INC.
______________________________
EMPLOYEE:
/S/ ▇▇▇▇ ▇▇▇▇▇▇▇
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EXHIBIT A
Stock Options
1. The options shall be nonqualified stock options.
2. The options shall have a strike price of $1.50 per share
3. One third of the options shall become exercisable after the
end of each of the first, second and third years of the date
hereof.
4. The exercisability of options shall accelerate upon a change
of control.
5. All unvested options shall terminate immediately upon the
termination of employment.
6. The options will have a term of seven years.
7. Except as specifically set out above, the grant of the
options will be subject to the terms and conditions of the DTI
Holdings, Inc. stock option plan, initially adopted in 2001, as
may be in effect from time to time.
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