Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, effective as
of October 27, 2008 (the “Effective Date”), by and
between AboveNet, Inc. (the “Company”), a Delaware
corporation having its principal offices at 360 Hamilton Avenue,
White Plains, New York 10601 and Joseph Ciavarella, residing at 93
Crest Road West, Merrick, NY 11566 (the “ Employee
”).
W
I T
N E S S E T H
:
WHEREAS, the Employee has been
employed by the Company pursuant to an employment
agreement;
WHEREAS, the Company and the
Employee now desire to provide for the continued employment of the
Employee by the Company after the Effective Date on the terms and
conditions hereinafter set forth herein and to replace and
supersede the existing employment agreement.
NOW, THEREFORE, in consideration of
the premises and the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
1.
Employment; Term
.
(a)
The Company hereby agrees to employ
the Employee, and the Employee hereby agrees to serve, as Senior
Vice President, Chief Financial Officer during the Term (defined
below).
(b)
The term (the “ Term
”) of the Employee’s employment hereunder will commence
on the Effective Date and, unless sooner terminated as provided in
Section 6 hereof, will terminate at the end of the day on
November 16, 2011. The Term shall be automatically extended,
unless sooner terminated as provided herein, for successive
additional one-year periods, unless at least 120 days prior to the
end of the Term, the Company or the Employee has notified the other
that the Term will not be extended.
2.
Duties .
(a)
The Employee will have such powers
and duties reasonably consistent with Employee’s position as
Senior Vice President, Chief Financial Officer and will perform
such duties as assigned to him by the Chief Executive Officer, or
alternatively at the discretion of the Chief Executive Officer the
President of the Company, (the “Superior”) and the
Board of Directors. The Employee agrees to perform his duties and
exercise his authority pursuant to the direction and control of his
Superior and will report to his Superior. The Employee will perform
his duties diligently, faithfully and to the best of his ability
and in accordance with sound business practices. The Employee will
be based in White Plains, New York, but will be expected to travel
from time to time.
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(b)
The Employee will devote
substantially all his business time and attention to his duties and
responsibilities hereunder, subject to paid vacations and holidays
as hereinafter set forth in Section 5 of this
Agreement.
(c)
The Employee will comply with all
Company policies including its Code of Conduct.
3.
Compensation
.
(a)
Base Salary
. During the Term, for all the
services rendered by the Employee in all capacities hereunder, the
Employee will receive an annual base salary of $315,000 (the
“ Base Salary ”) subject to required deductions
and withholdings or as otherwise required by law, payable in
accordance with the standard payroll practices of the Company then
in effect which is currently twice a month. Base Salary may be
increased but not decreased during the Term.
(b)
Bonus Plan
. In addition to the Base Salary set
forth in Section 3(a) hereof, for 2008 the Employee will
receive a bonus of $50,000 payable upon signing of this Agreement
and a target bonus of $100,000 payable on or about March 15,
2009 to be earned in the event that the Company’s timely
completes the audit of its 2008 financial statements and files its
2008 Form 10-K and achieves certain other financial
organizational goals to be set by the Superior. For 2009 and
thereafter, the Employee will have an annualized bonus targeted at
35% of Base Salary based on performance against the Company’s
EBITDA plan and other bonus targets set by the Compensation
Committee of the Board of Directors (the “ Bonus Plan
”).
4.
Expenses .
The Company will reimburse the
Employee for all reasonable out-of-pocket business expenses paid or
incurred by him in connection with the performance of his duties
and responsibilities hereunder, but payment will be made only
against a signed, itemized list of such expenses, utilizing general
forms for that purpose established by the Company and accompanied
by proper documentation verifying such expenses. Receipts will not
be required for any expenses that are less than Twenty-Five Dollars
($25) in value. The Company may audit the Employee’s expense
reports at any time.
5.
Additional Benefits; Vacations;
Facilities .
(a)
During the Term, the Employee will
be entitled to participate in all group health and insurance
programs and all other fringe benefit or retirement plans or other
plans provided to employees of the Company in similarly-situated
executive positions generally, subject to the Employee’s
satisfying all of the eligibility requirements thereof. Nothing
herein will be deemed to require the Company to establish or
maintain any employee benefit plan whatsoever, and the Company has
the right, in its sole and absolute discretion, to alter, amend,
modify, discontinue or terminate any and all employee benefit plans
at any time.
(b)
During the Term, the Employee will
be entitled to the generally same paid holidays as are provided to
employees in similarly-situated executive positions generally and
will be entitled to paid time off (including vacation days and
sick
2
days) per calendar year of 25 days
or such greater amount provided by the then existing Company
policy, consistent with his duties and responsibilities hereunder
and the Company’s vacation policy. Paid time off which
remains unused at the end of a calendar year will be subject to the
then existing policy regarding carryover of, or payments for, such
unused time.
(c)
If the Employee qualifies for term
life insurance at non-smoker’s rates, the Company will
provide the Employee during the Term, at no cost (other than
potential income tax) to the Employee, with a life insurance policy
providing for a death benefit of no less than $1,000,000. If the
Employee fails to qualify for term life insurance at
non-smoker’s rates, the Company will make its best efforts to
provide the Employee, at no cost (other than potential income tax)
to the Employee, with the maximum amount of term life insurance it
can obtain for the premiums the Company would have paid on a policy
providing a death benefit of $1,000,000 at non-smoker’s rates
if the Employee were qualified for such insurance.
6.
Termination of
Employment .
This Agreement may be terminated
prior to the end of the Term in accordance with the following
provisions:
(a)
Death . In the event of the Employee’s death
prior to the end of the Term, this Agreement will automatically
terminate. In such event, the Employee’s beneficiary or
beneficiaries will be entitled to: (i) all accrued but unpaid
Base Salary; (ii) all earned but unpaid annual bonuses under
the Bonus Plan for years prior to the year of the termination of
employment; (iii) a pro rated annual bonus under the Bonus
Plan for the year of the termination of employment (at the rate he
would be entitled to receive under the Bonus Plan if 100% of the
annual target were satisfied); and (iv) all accrued paid time
off (collectively, the “ Accrued Benefits
”).
(b)
Disability
. If the Employee suffers a
Disability (as hereinafter defined) prior to the end of the Term,
this Agreement may be terminated at the option of the Company by
notice from the Company to the Employee given at any time after the
Employee has suffered a Disability. The term “
Disability ” shall have the meaning set forth in
Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended. In such event, such termination will be effective as of
the date on which the Company gives notice to the Employee that it
is terminating his employment hereunder pursuant to this
Section 6(b). In such event, the Employee will be entitled to
the Accrued Benefits.
(c)
For Cause or Not For Good
Reason .
(i)
This Agreement may be terminated
prior to the end of the Term at the option of the Company for Cause
(as hereinafter defined) or by the Employee not for Good Reason (as
defined in subsection (d) below), effective as of the date on
which the Company gives notice to the Employee that it is
terminating his employment pursuant to this
Section 6(c) or the date on which the Employee gives
notice to the Company that he is terminating his employment
pursuant to this Section 6(c).
(ii)
The term for “Cause”
means any of the following events:
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(A)
fraud, misappropriation or
embezzlement of funds or property by the Employee involving the
Company or an Affiliated Company (as hereinafter
defined);
(B)
the conviction of the Employee in
any jurisdiction for any crime which constitutes a felony, or which
constitutes a misdemeanor that involves fraud, moral turpitude or
material loss to the Company or an Affiliated Company, or their
respective businesses or reputations;
(C)
the Employee’s material
misconduct in, or material neglect of, the performance of his
material duties and responsibilities hereunder, or the
Employee’s violation of any reasonable specific directions of
the Superior which directions are consistent with the provisions of
this Agreement; or
(D)
the Employee’s material breach
of this Agreement, including but not limited to the provisions set
forth in Sections 7 (Confidential Information), 8 (Restricted
Covenants), 9 (Bribery, Extortion or Kickbacks) and 10
(Intellectual Property) hereof.
(iii)
In the event of the termination of
the Employee’s employment hereunder for “Cause”
or by the Employee not for “Good Reason”, such
termination will be effective as of the date of notice of such
termination and the Company will have no further obligations
whatsoever hereunder to compensate the Employee pursuant to the
terms of this Agreement other than with respect to the accrued but
unpaid Base Salary, accrued paid time off, and any accrued benefits
under the Company’s benefit plans through the date of
termination.
(iv)
The term “ Affiliated
Companies ” means all entities that directly or
indirectly control, or are controlled by, the Company, all entities
that are under direct or indirect common control with the Company,
and all entities in which the Company has a significant joint
venture or other similar interest. (Any entity which is a member of
the Affiliated Companies is referred to herein as an “
Affiliated Company ”.) “ Control ”
and “ controlled ” means possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a corporation, partnership or other
entity, whether through ownership of voting securities, by contract
or otherwise.
(d)
For Good Reason or Without
Cause .
(i)
This Agreement may be terminated
prior to the end of the Term by the Employee for Good Reason (as
hereinafter defined) or at the option of the Company without Cause,
effective as of the date on which the Employee gives notice to the
Company that he is terminating his employment pursuant to this
Section 6(d) or as of the date on which the Company gives
notice to the Employee that it is terminating his employment
pursuant to this Section 6(d).
(ii)
The term “Good Reason”
means either of the following two events:
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(a)
the Company’s material breach
of any provision of the Agreement which breach continues uncured
for thirty-five (35) days after written notice thereof is given to
the Company by the Employee, or
(b)
a material relocation of the
Employee’s principal place of employment on the Effective
Date of this Agreement, provided that the Company chooses not to
rescind such relocation within thirty-five (35) days after written
notice requesting that it be rescinded is given to the Company by
the Employee.
In both cases (a) and (b), the
notice of alleged breach or relocation must be provided to the
Company within ninety (90) days of the initial existence of such
condition and the Employee shall only have the right to terminate
the Agreement for Good Reason within six (6) months of the
initial existence of such condition and only if such condition is
not cured or rescinded, as the case may be, prior to such
termination.
(iii)
Upon termination of the
Employee’s employment with the Company by the Company without
Cause or by the Employee for Good Reason, the Employee will be
entitled to receive from the Company (A) the Accrued Benefits,
(B)
the payment of twelve months Base
Salary, and (C) the continuation of health and welfare
benefits for twelve months (subject to the Company’s provider
continuing to provide such benefits at similar rates and such
continuing health and welfare benefits being terminated in the
event coverage is provided to the Employee by a subsequent
Employer).
(e)
Release . A condition precedent to the Company’s
obligations under Section 6(d) will be the
Employee’s execution and delivery of the release of all
claims (other than claims under Section 6(d) of this
Agreement and for directors’ and officers’
indemnification) he may have against the Company, its affiliates
and their directors, officers, employees, agents and shareholders
which relate to his employment with the Company and termination of
such employment (the “ Release ”). Such release
must be executed by the Employee within 45 days after receipt of
the release from the Company.
(f)
Payment Date
. The Employee will receive
all required payments under Sections 6(a) through 6(c) no
later than 30 days following the Employee’s termination of
employment, provided however, that the Employee will receive the
Accrued Benefits and the twelve months’ Base Salary no later
then ten (10) business days following the execution and
delivery of the Release by the Employee.
(g)
No Mitigation
; No Set-Off . In the event
of the termination of Employee’s employment by the Company
without Cause or by the Employee for Good Reason, the Employee
shall be under no obligation to seek other employment and there
shall be no offset against amounts due to him on account of any
remuneration or benefits provided to him by any subsequent
employment he may obtain. Notwithstanding the preceding, if the
Employee’s employment is terminated by the Company without
Cause or by the Employee for Good Reason, the obligation of
the
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Company to continue to provide the
Employee with heath insurance under
Section 6(d) (iii)&nb
