Exhibit 10.32
EMPLOYMENT, CONFIDENTIALITY,
SEVERANCE
AND NON-COMPETITION
AGREEMENT
THIS EMPLOYMENT, CONFIDENTIALITY,
SEVERANCE AND NON-COMPETITION AGREEMENT (this
“Agreement”) is effective as of March 13, 2007 by
and between Bill Fathers, an individual residing at
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(the “Executive”), and SAVVIS, INC., a Delaware
corporation, and all its subsidiaries (collectively referred to as
the “Company”). Capitalized terms used but not defined
herein have the respective meanings ascribed to such terms in
Section 7 of this Agreement.
WHEREAS, Executive acknowledges
that:
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the Company and its Affiliates
are and will be engaged in a number of highly competitive lines of
business;
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the Company and its Affiliates
conduct business throughout the United States and in numerous
foreign countries;
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the Company and its Affiliates
possess Confidential Information and customer goodwill that provide
the Company and its Affiliates with a significant competitive
advantage; and
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the Company’s and its
Affiliates’ success depends to a substantial extent upon the
protection of its Confidential Information (which includes trade
secrets and customer lists) and customer goodwill by all of their
employees;
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Executive has and will continue
to have possession of Confidential Information; and
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WHEREAS, if Executive were to leave
the Company, the Company and its Affiliates would in all fairness
need certain protections to prevent competitors from gaining an
unfair competitive advantage over them.
NOW, THEREFORE, in consideration of
the covenants and agreements hereinafter set forth, the parties
agree as follows:
1. Term of Agreement
. This Agreement will
remain in effect from the date hereof until the date the
Executive’s employment with the Company terminates for any
reason. The following provisions shall survive termination or
expiration of this Agreement for any reason, to the extent
applicable and in accordance with their terms: Sections 4, 5, 6 and
8. Executive’s employment is “at-will”, and
nothing contained herein shall be deemed a guarantee of employment
with Company for any period of time.
2. Capacity and
Performance .
(a) During the term hereof, the
Executive shall serve the Company in the position to which he or
she is appointed from time to time. Executive’s position as
of the date of this Agreement is Senior Vice President, Engineering
and Development. During the term hereof, Executive will be employed
by the Company on a full-time basis and shall perform the duties
and responsibilities of his or her position and such other duties
and responsibilities on behalf of the Company and its Affiliates,
reasonably related to that position, as may be designated from time
to time by the Compensation Committee (the “Compensation
Committee”) of the Board of Directors of the Company (the
“Board”) or other designee.
(b) During the term hereof, the
Executive shall devote his full business time and his best efforts,
business judgment, skill and knowledge to the advancement of the
business and interests of the Company and its Affiliates and to the
discharge of his duties and responsibilities hereunder. The
Executive shall not engage in any other business activity or serve
in any industry, trade, professional, governmental or academic
position during the term of this Agreement, except as may otherwise
be expressly approved in advance by the Compensation Committee or
other designee in writing.
3. Compensation and Benefits .
As compensation for all services
performed by the Executive under and during the term hereof, and
subject to performance of the Executive’s duties and the
fulfillment of the obligations of the Executive to the Company and
its Affiliates, pursuant to this Agreement or otherwise:
(a) Base Salary . During the
term hereof, the Company shall pay the Executive a base salary,
which as of the date of execution of this Agreement is set at the
rate of Two Hundred Ninety Seven Thousand Dollars ($297,000) per
annum, payable in accordance with the regular payroll practices of
the Company for its executives subject to adjustment from time to
time by the Compensation Committee, in its sole discretion. Such
base salary, as from time to time adjusted, is hereafter referred
to as the “Base Salary”.
(b) Incentive and Bonus
Compensation .
(i) For service rendered during the
Company’s fiscal year ending December 31, 2007, the
Executive will be eligible, at the Compensation Committee’s
discretion, to receive a bonus payment equal to 50% of Base Salary,
pro rated for the number of months of service rendered by the
Executive during 2007 and payable in accordance with the terms of
the Company’s 2007 Annual Incentive Plan.
(ii) Commencing on January 1,
2008 and for the remainder of the term hereof, the Executive shall
be entitled to participate in the Company’s Annual Incentive
Plan (the “Annual Incentive Plan”) on terms to be
determined annually by the Compensation Committee prior to the
commencement of each fiscal year. Nothing contained herein shall
obligate the Company to continue the Annual Incentive Plan. Any
compensation paid to the Executive under the Annual Incentive Plan
shall be in addition to the Base Salary. Except as otherwise
expressly provided under the terms of the Annual Incentive Plan or
this Agreement, the Executive shall not be entitled to earn bonus
or other compensation for services rendered to the
Company.
(c) Stock Options . Subject
to approval by the compensation committee, the Company shall grant
to the Executive an option to purchase 125,000 shares of the common
stock, $.01 par value, of the Company under the SAVVIS, Inc.
Amended and Restated 2003 Incentive Compensation Plan (the
“Plan”) at an exercise price per share equal to the
public market closing price on the business day immediately prior
to the date of grant (the “Option”). The shares that
are subject to the Option shall vest at the rate of twenty-five
percent (25%) per year on each of the first four
(4) anniversaries of the grant date; provided that the
Executive is still employed by the Company on each such vesting
date. Vesting of the Option is also subject to the terms of
Section 4(c)(ii) of the Agreement. Except as may be modified
by the terms of this Agreement, the Option and all other options
granted to the Executive by the Company shall be subject to the
terms of the Plan and any applicable option certificate and
shareholder and/or option holder agreements and other restrictions
and limitations generally applicable to equity held by Company
executives or otherwise required by law.
4. Termination of
Employment.
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(a)
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Executive’s employment with the Company
may be terminated as follows:
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(i)
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by the Company
with Cause;
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(ii)
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by the Company
without Cause;
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(iii)
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upon
Executive’s death or Disability (defined herein);
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(iv)
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by Executive
with Good Reason; or
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(v)
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by Executive
without Good Reason.
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(b) Upon termination of
Executive’s employment for any reason, all rights and
obligations under this Agreement shall cease, except as referred to
in Section 1 and except that Executive shall be entitled to
(i) payment of his or her salary through the effective date of
termination, plus (ii) payment of any other amounts owed but
not yet paid to Executive as of the effective date of termination
(such as reimbursement for business expenses incurred prior to
termination in accordance with the Company’s expense and
reimbursement policy, plus (iii) any other benefits to which
Executive may be entitled which provide for payment or other
benefits following termination (such as under disability insurance
plan).
(c) Severance Benefits
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(i) If the Executive is subject to
termination pursuant to an Involuntary Termination (as defined in
Section 7), then in addition to any amounts/benefits owed
under Section 4(b), the Company shall pay the Executive:
(x) an amount equal to 100% of his or her then current annual
Base Salary for one year, plus (y) at the discretion of the
Compensation Committee, a pro-rated portion of the bonus that the
Executive would be entitled to receive under the Company’s
Annual Incentive Plan (“Bonus”). The pro-rated Bonus
will be calculated by the Compensation Committee by extrapolating
the Company’s anticipated full year performance based on the
current year performance to date and then multiplying the resulting
full year extrapolation a fraction the numerator of which is the
number of days during the calendar year the Executive worked in the
year of Involuntary Termination up to the termination date and the
denominator of which is 365 (the amounts paid under (i) and
(ii) constitute the “ Severance Payment ”).
If the Executive is subject to an Involuntary Termination prior to
March 31 of any calendar year, and has, therefore, not yet
received payment for the prior year under the Annual Incentive
Plan, then the Executive will also be entitled to such payment
under the Annual Incentive Plan as he would otherwise have been
entitled to receive to receive had he remained employed on
March 31 of the year of Involuntary Termination.
(ii) Further, if and only if the
Involuntary Termination occurs within twelve (12) months of a
Change in Control (a “Change in Control Termination”),
then (x) in addition to the Severance Payment, any stock
awards, stock options, stock appreciation rights or other
equity-based awards (each an “Equity Award”) that were
outstanding immediately prior to the effective date of the Change
in Control Termination shall, provided such Equity Awards are
assumed by the acquirer in such Change in Control, to the extent
not then vested, fully vest and become exercisable as of such date
and the Executive shall have the right to exercise any such Equity
Award until the earlier to occur of (A) twelve
(12) months from the date of the Change in Control Termination
and (B) the expiration date of such Equity Award as set forth
in the agreement evidencing such award; and (y) the Executive
shall be entitled to the Bonus.
(d) Timing of and Conditions to
Payment . Any Severance Payment due under Section 4(c)
shall be paid bi-monthly, in accordance with the Company’s
standard payroll procedures, for the twelve (12) month period
following the effective date of termination. Any other provision of
this Agreement notwithstanding, no severance benefits shall be
payable unless and until each of the following has
occurred:
(i) the Executive has executed and
delivered to the Company a general release (in a form prescribed by
the Company) of all known and unknown claims that he or she may
then have against the Company or persons affiliated with the
Company and has agreed not to prosecute any legal action or other
proceeding based upon any of such claims;
(ii) the Executive has, no later
than the effective date of termination, delivered to the Company a
resignation from all offices, directorships and fiduciary positions
with the Company and it affiliates;
(iii) the effective date of the
Executive’s Involuntary Termination;
(iv) the date of the Company’s
receipt of the Executive’s executed General Release, which
must be no later than 21 days following the effective date of
termination (except in the case of group terminations, such time
period shall be 45 days);
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(v) the expiration of any rescission
or revocation period applicable to the Executive’s executed
General Release; and
(vi) the Executive is and continues
to be in compliance with all of his or her obligations under this
Agreement, including, without limitation, Sections 5 and 6, and
under the agreements and other documents referred to or
incorporated by reference herein.
The Company will commence payment of
the Severance Payment within ten (10) business days of
satisfaction / occurrence of the last of the foregoing items
(1) through (5). For purposes of Section 409A of the
Internal Revenue Code of 1986, as amended (“Code”), an
installment Severance Payment shall be deemed to be made as of the
applicable bimonthly payroll date following the Executive’s
effective date of termination if made by the 15th day of the third
calendar month following such payroll date.
(e) Health Care Benefit . If
the Executive elects to continue his or her health insurance
coverage under the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”) following an Involuntary Termination, then in
addition to the benefits noted above, the Company shall pay the
Executive’s monthly premium under COBRA until the earliest of
(i) the close of the twelve-month period following cessation
of his or her employment or (ii) the expiration of the
Executive’s continuation coverage under COBRA.
(f) Withholding Taxes . All
payments made under this Agreement shall be subject to reduction to
reflect taxes or other charges required to be withheld by
law.
(g) Section 409A Savings
Clause . If any compensation or benefits provided by this
Agreement may result in the application of Section 409A of the
Code, the Company shall, in consultation with the Executive, modify
the Agreement in the least restrictive manner necessary in order to
exclude such compensation from the definition of “deferred
compensation” within the meaning of such Section 409A or
in order to comply with the provisions of Section 409A, other
applicable provision(s) of the Code and/or any rules, regulations
or other regulatory guidance issued under such statutory provisions
and without any diminution in the value of the payments to the
Executive. Notwithstanding any provision of this Agreement to the
contrary, to the extent required in order to comply with
Section 409A of the Code, amounts to be paid under this
Agreement upon the Executive’s termination of employment
shall be paid, with interest on any payment from the termination
date until the first business day after the date that is six months
following the termination date at the applicable federal rate
provided in Section 7872(f)(2)(A) of the Code, to the
Executive on the first business day after the date that is six
months following the termination date.
5. Confidential
Information .
(a) The Executive acknowledges that
the Company and its Affiliates continually develop Confidential
Information, that the Executive may develop Confidential
Information for the Company or its Affiliates and that the
Executive will have possession of and access to Confidential
Information during the course of employment. The Executive will
comply with the policies and procedures of the Company and its
Affiliates for protecting Confidential Information, and shall not
disclose to any Person or use, other than as required by applicable
law or for the proper performance of his duties and
responsibilities to the Company and its Affiliates, any
Confidential Information obtained by the Executive incident to his
employment or other association with the Company or any of its
Affiliates. The Executive understands that this restriction shall
continue to apply after his employment terminates, regardless of
the reason for such termination. The confidentiality obligation
under this Section 5 shall not apply to information which is
generally known or readily available to the public at the time of
disclosure or becomes generally known through no wrongful act on
the part of the Executive or any other Person having an obligation
of confidentiality to the Company or any of its
Affiliates.
(b) All documents, records, tapes
and other media of every kind and description relating to the
business, present or otherwise, of the Company or its Affiliates
and any cop