EMPLOYMENT
AGREEMENT
THIS AGREEMENT is
made and entered into as of the 31st day of October, 2005 by and
between Globix Corporation, a Delaware corporation (hereinafter
referred to as the "Company"), and Ted S. Lodge, a resident of the
Commonwealth of Pennsylvania (hereinafter referred to as the
"Executive"); Executive and Company, together the
“Parties” and each a “Party”.
WHEREAS, the
Company wishes to retain the services of the Executive in the
capacities herein set forth, and the Executive wishes to be
employed by the Company in such capacities;
NOW, THEREFORE,
in consideration of the premises and the mutual covenants herein
contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Company and the Executive hereby agree as follows:
Section
1.
Employment. The Company hereby employs the Executive, and
the Executive hereby accepts employment with the Company, upon the
terms and conditions hereinafter set forth.
Section
2.
Term. Subject to the provisions for earlier termination
hereinafter set forth, the term of employment hereunder (the
"Term") shall commence on the date hereof and shall continue
through the first anniversary of the date of this Agreement, unless
otherwise extended in a writing signed by both Parties. Such period
or any subsequent extension period is referred to herein as the
"Employment Period".
Section
3.
Compensation. The Company agrees to provide the Executive
with salary and other benefits and perquisites for all services
rendered by the Executive under this Agreement in accordance with
Schedule A attached hereto.
Section
4.
Duties. During the Term, the Executive shall serve as the
Chairman of the Board of Directors of the Company
and Executive
Chairman. As Chairman of the Board, the Executive shall preside
over board meetings and exercise other functions of the Chairman of
the Board in accordance with the Company’s Bylaws. As
Executive Chairman, the Executive shall report to the Board of
Directors, oversee the President and Chief Executive Officer,
oversee and implement the transition of operating models and pursue
strategic initiatives.
Section
5.
Extent of Service; Facilities. During the Term, the
Executive shall be required to devote at least two days per work
week to the business and affairs of the Company and its
subsidiaries, and to use his best efforts to perform faithfully and
efficiently his responsibilities hereunder. The Executive will be
expected in the normal course to spend at least one work day each
week in the New York office of the
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Company. The
Company will provide the Executive with a fully furnished office,
as well as all equipment, supplies and office personnel reasonably
required for the performance of his duties hereunder.
Section 6.
Termination of Employment.
Section 6.1.
For Cause. The Company may immediately terminate the
Executive's employment at any time during the Employment Period for
Cause, in which case the Company shall pay to the Executive any
compensation earned but not paid prior to the effective date of
such termination. Under such circumstances, such payment will be in
full and complete discharge of any and all liabilities or
obligations of the Company to the Executive hereunder, and the
Executive will be entitled to no further benefits under this
Agreement. Further, all stock options that have not vested will be
deemed forfeited, and any stock options that have vested but have
not been exercised shall remain exercisable for a period of 90 days
following termination and, if not exercised, shall be deemed
forfeited. For purposes of this Agreement, Cause shall mean: (i)
the Executive's conviction of a felony or misdemeanor that has a
material adverse effect upon the business or reputation of the
Company or any affiliate of the Company; (ii) that the Company has
determined that Executive has in the performance of his duties
hereunder committed an act constituting a material breach of
fiduciary duty, gross negligence or gross misconduct, which has had
an injurious effect on the Company or its business; or (iii)
Executive's willful failure or refusal to perform his assigned
duties as reasonably assigned by the Board of Directors, which
willful refusal has had, or if continued, could reasonably be
expected to have, an injurious effect on the Company or the
subsidiaries of the Company or their respective businesses or
prospects, and which willful refusal has continued after the
Executive has received two written warnings, advising him of such
failure or refusal, and providing Executive with an opportunity to
resume performance in accordance with his assigned duties. Any
termination by the Company for Cause shall be communicated by
Notice of Termination to the Executive given in accordance with
Section 10.5 hereof. For purposes of this Agreement, a "Notice of
Termination" means a written notice which sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment hereunder.
Section 6.2.
Without Cause. If the Company terminates the employment of
the Executive without Cause or following a Change of Control (as
defined in the indenture governing the Company’s 11% senior
secured notes), the Company shall pay to the Executive as severance
(i) his Base Salary (as defined in Schedule A) through any
remaining period up until October 31, 2006 plus (ii) one
year’s Base Salary. Further, all stock options that have not
vested will be deemed vested, and all such options plus any stock
options that have vested but have not been exercised shall remain
exercisable for a period of 360 days following termination and, if
not exercised, shall be deemed forfeited. Under such circumstances,
such payment will be in full and complete discharge of any and all
liabilities or obligations of the Company to the
Executive
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hereunder, and the Executive
will be entitled to no further benefits under this Agreement. The
Parties agree that, because there can be no exact measure of the
damage that would occur to the Executive as a result of a
termination by the Company of the Executive's employment without
Cause, the payments and benefits paid and provided pursuant to this
Agreement will be deemed to constitute, in part, liquidated damages
and not a penalty.
Section 6.3
Voluntary Termination with Good Reason. The Executive may terminate
his employment for Good Reason, as set forth below, upon the giving
of thirty (30) days prior written notice to the Company. In such
event, the Executive shall be entitled to the identical termination
rights specified in Section 6.2 hereof. The Executive may only
terminate his employment for “Good Reason” in the event
of a material diminishment by the Company of the Executive’s
rights hereunder, including a reduction in base salary, a material
reduction in fringe benefits (except as such shall apply generally
to all of the Company’s senior management), a relocation of
the Executive’s principal place of business by more than 60
miles, or another material breach of this Agreement by the
Company.
Section 6.4
Resignation without Good Reason. The Executive may resign upon
the giving of thirty (30) days prior written notice to the Company
(in which case the Company will have the right to relieve the
Executive, in whole or in part, of his duties under this Agreement,
without any reduction in the compensation to be paid to the
Executive through the termination date). It is understood that in
the case of resignation without Good Reason, the Executive will not
be entitled to those termination rights specified in Section 6.2
hereof, and the sole obligation of the Company will be the payment
of compensation through the termination date as referred to
above.
Section 6.5 Death, Illness or
Incapacity. The Executive’s
employment under this Agreement shall terminate upon the
Executive’s death, in which event Executive’s estate or
beneficiary shall be entitled to any unpaid Base Salary earned to
the date of Executive’s termination. Further, upon
termination of this Agreement because of Executive’s death,
all stock options that have not vested will be deemed vested, and
all such options plus any stock options that have vested but have
not been exercised shall remain exercisable by Executive’s
estate or beneficiary for a period of 360 days following
termination and, if not exercised, shall be deemed forfeited.
During any period of disability, illness or incapacity during the
Employment Period which renders the Executive at least temporarily
unable to perform the services required hereunder for a period
which does not exceed forty-five (45) continuous days in any
one-year period, the Executive will receive the compensation
payable under Schedule A of this Agreement plus any pro rated bonus
for such period, less any benefits received by him under any
disability insurance carried by or provided by the Company. Upon
the Executive's permanent disability (as defined below), the
Executive will be subject to termination as set forth below, and if
so terminated the Company will pay to the Executive any and all
Base Salary and bonus earned but not paid to the Executive prior to
the effective date of such termination and will not be responsible
for any additional payments hereunder. Further and notwithstanding
the foregoing, upon termination of this Agreement because of
Executive’s permanent disability, all stock options that have
not vested will be deemed vested, and all such options plus any
stock options that have vested but have not been exercised shall
remain exercisable by Executive’s estate or beneficiary for a
period of 360 days following termination and, if not exercised,
shall be deemed forfeited. Notwithstanding any such termination,
the Executive will continue to receive any disability benefits to
which he may be entitled under any disability income insurance
which may be carried by or provided by the Company from time to
time.
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The term
"permanent disability" as used in this Agreement will mean the
inability of the Executive, as determined by the Board of Directors
of the Company, by reason of physical or mental disability to
perform the duties required of him under this Agreement for a
period of ninety (90) days in any one-year period. Successive
periods of disability, illness or incapacity will be considered
separate periods unless the later period of disability, illness or
incapacity is due to the same or related cause and commences less
than six months from the ending of the previous period of
disability. Upon such determination, the Board of
