Exhibit 10.29
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the
10th day of June, 1998, by and between Digital Teleport, Inc., a Missouri
corporation (the "Company"), and Daniel A. Davis ("Employee").
WITNESSETH:
WHEREAS, the Company desires to obtain the benefit of the
services of Employee, and Employee desires to be employed by the Company and
render such services on the terms and conditions, including compensation,
hereinafter set forth;
WHEREAS, the Company is a wholly-owned subsidiary of DTI
Holdings, Inc. ("Holdings");
NOW, THEREFORE, in consideration of the mutual promises
hereinafter set forth, it is hereby agreed as follows:
1. Employment. Employee is hereby employed by the Company and
Employee hereby accepts such employment upon the terms and conditions
hereinafter set forth.
2. Term of Employment. The term of this Employment Agreement
shall commence on the date first set forth above and shall end on the third
anniversary of such date (the "Employment Period"), unless sooner terminated as
provided in Section 5 hereof.
3. Duties. Employee shall serve in a full-time capacity with
the title Vice President Legal Affairs - Corporate (which area of
responsibilities may be modified from time to time by the Company's President)
with the Company or the business of the Company as presently conducted and as
said business may evolve during the Employment Period on a full-time basis.
During the Employment Period, Employee shall devote such time, attention, skill,
energy and efforts as may be necessary for the faithful performance of duties
assigned to Employee.
4. Compensation.
(a) During the Employment Period, the Company shall pay
Employee as compensation for his or her services during the Employment Period, a
base salary (the "Base Salary") at a rate of One hundred, Twenty-five thousand
Dollars ($125,000) per year, such Base Salary to be payable in accordance with
the Company's usual payment practices. Additionally, Employee shall be entitled
to participate in all of the Company's employee benefit plans generally
available to employees of the Company.
(b) In addition to the compensation set forth in Section 4(a),
the Company shall pay Employee the sum of twenty thousand dollars ($20,000) upon
the execution by Employee of this Agreement.
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(c) Employee will receive a grant of options to purchase
150,000 shares of Holdings' outstanding common stock. Such options shall be have
the features set forth in Exhibit A hereto. The grant date shall be as soon as
reasonably practicable following the date hereof, not to exceed four (4) months.
(d) Employee will be eligible for a bonus up to one-third of
his Base Salary. Such bonus shall in the sole and absolute discretion of the
Company.
(e) All compensation shall be subject to customary withholding
taxes and other employment and usage taxes as required with respect thereto.
5. Termination of Employment. Prior to the expiration of the
Employment Period, this Employment Agreement and Employee's employment may be
terminated by the Company as follows:
(a) Upon thirty (30) days prior written notice to Employee in
the event Employee becomes disabled. In the event of a disagreement concerning
the existence of any such disability, the matter shall be resolved by a
disinterested licensed physician chosen by the Company.
(b) At the election of the Company, for "Cause" immediately
upon notice by the Company to Employee. For the purposes of this Employment
Agreement, "Cause" shall mean:
(1) willful or prolonged absence from work by Employee (other
than by reason of disability due to physical or mental illness) or
failure, neglect or refusal by Employee to perform his duties and
responsibilities hereunder;
(2) material breach by Employee of any of the covenants
contained in this Employment Agreement;
(3) the Employee's commission of fraud or dishonesty against
the Company or willful misfeasance or nonfeasance of duty intended to
injure or having the effect of injuring the reputation, business or
business relationships of the Company, its subsidiaries or affiliates
or their respective officers, directors or employees; or
(4) upon a charge by a governmental entity against Employee of
any crime involving moral turpitude or which could reflect unfavorably
upon the Company or upon the filing of any civil action involving a
charge of embezzlement, theft, fraud or other similar act.
(c) For any other cause or without cause, upon written notice
to Employee.
Upon termination of this Employment Agreement, all rights and
obligations of the parties hereunder shall cease, except: (i) if this Employment
Agreement is terminated without cause pursuant to Subsection (c) above prior to
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the end of the Employment Period, Employee shall receive all of his or her Base
Salary for the remainder of such Employment Period; and (ii) termination of
employment pursuant to this Section 5 or otherwise shall not terminate or
otherwise affect the rights and obligations of the parties pursuant to Sections
7 through 15 hereof.
Subject to the provisions of Section 9 hereof, nothing
contained herein will be construed to prevent Employee from seeking or obtaining
other employment in the event the employment of Employee is terminated by the
Company without cause.
6. Change of Control.
(a) If (i) the Company terminates Employee's employment
without Cause during the period commencing with the date of a Change of Control
(as hereinafter defined) and ending twelve months following the Change of
Control (the "Change of Control Period"), or (ii) Company terminates Employee's
employment without Cause within three months prior to a Change of Control unless
such termination was not in connection with or not in anticipation of a Change
of Control, the Employee shall be entitled to receive as compensation Change of
Control Payments (as hereinafter defined) and such Change of Control Payments
shall be in lieu of any other payments described in Section 5 herein.
Notwithstanding anything to the contrary contained herein, nothing in this
Agreement shall relieve Employer of its obligation of providing Employee with
all retirement and deferred compensation benefits in accordance with the terms
of all retirement and deferred compensation plans in which Employee
participates.
(b) The term "Change of Control") for purposes of this section
shall mean:
(i) any "person" (within the meaning of the Securities
Exchange Act of 1934 (the "Exchange Act"), becomes the beneficial owner of more
than fifty percent (50%) of Holdings then outstanding voting securities (other
than as a result of any sale by KLT Telecom Inc. of voting securities in
Holdings or change of ownership of KLT Telecom Inc.);
(ii) the shareholders of Holdings approve a definitive
agreement of merger or consolidation with any other business entity other than a
merger or consolidation that would result in the voting securities of Holdings
outstanding immediately prior to the consummation of the merger or consolidation
continuing to represent (either by remaining outstanding or being converted into
voting securities of the surviving entity) at least fifty percent (50%) of the
consolidation outstanding immediately after such merger or consolidation
(provided that if such agreement is terminated prior to consummation of such
merger or consolidation, a change of control shall be deemed not to have
happened for purposes of this Agreement if employee has not been previously
terminated); or
(iii) the shareholders of Holdings approve a plan of complete
liquidation or dissolution of Holdings or an agreement for the sale or
disposition by Holdings of all or substantially all of the assets of Holdings
(provided that if such plan is terminated prior to such liquidation or
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dissolution, or if such agreement is terminated prior to the consummation of
such sale or disposition, a change of control shall be deemed not to have
happened for purposes of this Agreement if employee has not been previously
terminated).
Notwithstanding the foregoing, in no event shall an initial public offering of
Holdings, or an increase in the ownership of shares of voting securities by any
shareholder of Holdings who beneficially owns shares of voting securities as of
the date of this Agreement, be considered a Change of Control.
(c) The term "Change of Control Payments" shall mean the
greater of:
(i) Employee's Base Salary for the remainder of the
Employment Period, plus an amount equal to the simple average of
performance bonuses previously paid to Employee, prorated to the end of
the Employment Period; or
(ii) an amount equal to Employee's Base Salary for
one year.
7. Third-Party Confidentiality. Employee shall not disclose to
the Company or induce the Company to use any secret or confidential information
belonging to persons not affiliated with the Company. Employee acknowledges that
the Company has disclosed that the Company is now, and may be in the future,
subject to duties to third parties to maintain information in confidence and
secrecy. By executing this Employment Agreement, Employee consents to be bound
by any such duty owed by the Company to any third party.
8. Inventions, Etc.; Confidentiality.
(a) Any and all ideas, inventions, discoveries, patents,
patent applications, continuation-in-part patent applications, divisional patent
applications, technology, copyrights, derivative works, trademarks, service
marks, improvements, trade secrets and the like, which are developed, conceived,
created, discovered, learned, produced and/or otherwise generated by Employee,
whether individually or otherwise, during the time that Employee is employed by
the Company, whether or not during working hours, that relate to (i) the
business and/or activities of the Company, (ii) the Company's anticipated
research or development, or (iii) any work performed by Employee for the
Company, shall be the sole and exclusive property of the Company, and the
Company shall own any and all right, title and interest to such property. The
Employee assigns and agrees to assign to the Company any and all right, title
and interest in and to any such ideas, inventions, discoveries, patents, patent
applications, continuation-in-part patent applications, divisional patent
applications, technology, copyrights, derivative works, trademarks, service
marks, improvements, trade secrets and the like, whenever requested to do so by
the Company, at the Company's expense, and the Employee agrees to execute any
and all applications, assignments or other instruments which the Company deems
desirable or necessary to protect such interests.
(b) Section 8(a) shall not apply to any invention for which no
equipment, supplies, facilities, or confidential and trade secret information of
the Company was used and which was developed entirely on the Employee's own
time, unless (i) the invention relates (A) to the Company's business or (B) to
the Company's actual or demonstrably anticipated research or development or (ii)
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the invention results from any work performed by the Employee for the Company.
(c) Employee acknowledges that Employee's work for the Company
is expected to bring him or her into close contact with various confidential
business data of the Company and its clients not readily available to the
public. Accordingly, Employee:
(i) 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 or her 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 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, 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"); and
(ii) 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 or her concerning the Company, its
Clients and any Affiliates are the sole property of the Company, and
(B) if such documents are in the possession 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.
9. Noncompetition/Conflicts of Interest.
(a) Employee covenants an agrees that Employee shall not,
directly or indirectly, as a principal, employee, partner, consultant, agent or
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 Term (the period of time during which 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
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access provider, competitive or incumbent local exchange carrier or
inter-exchange carrier shall constitute competitive activity.
(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 to 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) The provisions of this Section 9 shall not be applicable
to the extent Employee (i) is employed by or is a partner in a law firm, (ii) is
employed by the legal department in a corporation or other entity, or (iii)
otherwise engages in the practice of law or provision of legal services
following the termination of his employment with the Company. The provision of
business advice incidental to the practice of law or provision of legal services
shall not be considered other than the practice of law. In that event, Employee
acknowledges that he is subject to professional obligations concerning conflicts
of interest that accrue to the benefit of the Company. In addition, without
limiting or enlarging such professional obligations, Employee agrees that he
will not, for a period of three years following the Employment Term, represent
or aid in the legal representation of, any entity in any transaction or
proceeding in which the Company is an adverse party.
10. Acknowledgment Regarding Restrictions. Employee recognizes
and agrees that the restraints contained in Section 8 and Section 9 are
reasonable and enforceable in view of the Company's legitimate interests in
protecting its trade secrets and customer contacts. Employee further
acknowledges that the limitations contained in Section 8 and Section 9 are
reasonable as to the duration in time, as to geographic scope and as to the
nature of the activities restricted. However, in the event an appropriate court
determines that the provisions of Section 9 are excessively broad as to
duration, geographic scope, prohibited activities or otherwise, the parties
agree that Section 9 may be reduced or curtailed to the extent necessary to
render it enforceable.
11. Vacation and Holidays. Employee shall be entitled to three
(3) weeks paid vacation per year starting at the beginning of the employment
term, provided that the Company may require that such vacation shall be
scheduled as mutually agreed by Employee and the Company. Employee shall be
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entitled to the following six (6) paid holidays per year: New Year's Day,
Independence Day, Thanksgiving and the day after Thanksgiving, and Christmas Day
and an additional "floating holiday."
12. Non-Waiver of Rights. The Company's failure to enforce at
any time any of the provisions of this Employment Agreement or to require at any
time performance by the Employee of any of the provisions hereof shall in no way
be construed to be a waiver of such provisions or to affect either the validity
of this Employment Agreement, or any part of it, or the right of the Company
thereafter to enforce each and every provision in accordance with the terms of
this Employment Agreement.
13. The Company's Right to Injunctive Relief. In the event of
a breach or threatened breach of any of Employee's duties and obligations under
the terms and provisions of Sections 8 or 9, Employee agrees that the Company
shall be entitled to a temporary restraining order and a preliminary and
permanent injunction to prevent such breach or threatened breach because the
harm which might result to the Company's business as a result of any
noncompliance by Employee with any of the provisions of Sections 8 or 9 will be
irreparable. Employee acknowledges that the Company's entitlement to injunctive
relief shall be in addition to the Company's entitlement to damages.
14. The Company's Right to Recover Costs and Fees. Employee
agrees that if Employee breaches or threatens to breach this Employment
Agreement, Employee shall be liable for any attorney's fees and costs incurred
by the Company in enforcing its rights under this Employment Agreement in the
event that a court determines that Employee has breached this Employment
Agreement or if the Company obtains injunctive relief against the Employee.
15. Prior and/or Present Employment. Employee represents and
warrants to the Company that Employee is not a party to any agreement containing
a noncompetition provision or other restriction with respect to (a) the nature
of any services or business that Employee is entitled to perform or conduct for
the Company or (b) the disclosure or use of any information which directly or
indirectly relates to the nature of the business of the Company or the services
to be rendered by Employee to 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.
16. Future Employment. During the Restricted Period, Employee
shall inform each new employer, prior to accepting employment, of the existence
of this Employment Agreement and provide that employer with a copy of it.
Employee hereby authorizes the Company to forward a copy of this Employment
Agreement to any actual or prospective new employer.
17. Assignments. This Employment Agreement shall be freely
assignable by the Company and shall inure to the benefit of, and be binding
upon, the Company, its successors and assigns and/or any other corporate entity
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which shall succeed to the business presently being operated by the Company,
but, being a contract for personal services, neither this Employment Agreement
nor any rights hereunder are assignable by Employee.
18. Governing Law. This Employment Agreement shall be
interpreted in accordance with and governed by the laws of the State of Missouri
without regard to its conflict of law rules. The parties agree that exclusive
venue and jurisdiction for any action brought under this Employment Agreement
shall lie in the County of St. Louis, Missouri.
19. Amendments. No modification, amendment or waiver of any of
the provisions of this Employment Agreement shall be effective unless in writing
and signed by the parties hereto.
20. Notices. Any notices to be given by either party hereunder
shall be in writing and shall be deemed to have been duly given if delivered or
mailed, certified or registered mail, postage prepaid, as follows: to the
Company at Digital Teleport, Inc., 11111 Dorsett Road, St. Louis, Missouri
63043, Attn.: Richard D. Weinstein, President; and to Employee at 2632 South
Eleventh, St. Louis, Missouri 63118; or to such other address as may have been
furnished to the other party in writing.
21. Entire Agreement. This Employment Agreement is the entire
agreement between the parties and supersedes any previous oral or written
agreement or understanding between the Company and Employee with respect to the
subject matter hereof. There are no representations, warranties, promises or
undertakings other than those expressly contained in this Employment Agreement.
22. Confidentiality of Employment Agreement. Employee
acknowledges that the terms and provisions in this Agreement arise from a unique
set of circumstances. Therefore, Employee agrees to keep the terms of this
Employment Agreement strictly confidential and shall not reveal such terms to
any person, including, without limitation, any other employee of the Company.
23. Severability. Subject to severability provisions integral
to any paragraph of this Agreement, the unenforceability, invalidity or
illegality of any provisions of this Agreement shall not effect or impair the
continuing enforceability or validity of any other part of this Agreement, all
of which shall survive and be valid and enforceable.
24. Counterparts. This Employment Agreement may be executed 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.
25. Headings. The headings in this Employment Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Employment agreement.
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IN WITNESS WHEREOF, the parties have executed this Employment
agreement as of the date first above written.
DIGITAL TELEPORT, INC.
By: /s/ Richard D. Weinstein
--------------------------
Richard D. Weinstein
President
EMPLOYEE
/s/ Daniel A. Davis
-----------------------------
Daniel A. Davis
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EXHIBIT A
Stock Options
1. The options shall be nonqualified stock options.
2. One third of the options shall become exercisable after the end of each of
the first, second, and third years of the date hereof.
3. The exercisability of options shall accelerate upon a change of control.
4. Employee shall have 60 days following termination to exercise options if
terminated without cause, or if termination occurs following a change of
control.
5. The exercise price will be equal to $6.66.
6. The options will have a term of ten years.
