EXHIBIT 10.24
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated 24 November 1999, by and between Carrier1
International GmbH, a company duly incorporated under the laws of
Switzerland, having its registered offices at Militarstrasse 36, 8004 Zurich
(the "Company") and Mr. Alex Schmid ("Employee").
WITNESSETH:
WHEREAS, the Company desires to assure itself of the Employee's services,
and the Employee desires to be employed by the Company;
WHEREAS, the Company's parent, Carrier 1, LLC, a Delaware (USA) limited
liability company ("Carrier 1"), the Employee, Stig Johansson ("Johansson")
Eugene A. Rizzo ("Rizzo"), Kees Van Ophem ("Van Ophem"), Neil Craven
("Craven"), Terje Nordahl ("Nordahl"), Providence Equity Partners L.P.
("PEP") and Providence Equity Partners II, L.P. ("PEP II" and collectively
with PEP, "Providence") have entered into that certain Securities Purchase
Agreement (as amended from time to time, the "Purchase Agreement") dated as
of March 4, 1998, as amended to date, whereby they acquired certain
securities of Carrier 1 and Employee, Johansson, Rizzo, Van Ophem, Craven,
Nordahl, Providence and Carrier 1 have entered into the Securityholders`
Agreement (as defined in the Purchase Agreement);
WHEREAS, Providence wishes to protect the value of their investment in
Carrier 1 and the Company from the risk of competition posed by the Employee
and it is a condition to the Providence's performance under the Purchase
Agreement that Employee enter into this Agreement in order to assure the
Company that the Employee will continue to provide his expertise in the
conduct of the Company's business.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 CODE. "Code" means the Swiss Code of Obligations
1.02 CONFIDENTIAL INFORMATION. "Confidential Information" means all
information, in any form or medium, that relates to the business, products,
services, research or development of the Company or any of the Related
Corporations, and its and their suppliers or customers, including: (a)
compilations of data (whether in whole or in part) and all analyses,
processes, methods, techniques, systems, formulae, research, records,
reports, manuals, documentation and models relating thereto; (b) computer
software, documentation and databases (whether existing or in various stages
of research and development); (c) identities of and information about the
Company`s and the Related Corporations` suppliers and customers and their
confidential information, suppliers and customers; (d) inventions, designs,
developments, devices, methods and processes (whether or not reduced to
practice); (e) internal business information, including, without limitation,
information relating to strategic and staffing plans and practices (including
information with respect to potential acquisition targets), marketing,
promotional and sales plans,
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practices or programs, training practices and programs, cost and pricing
structure, and accounting and business methods; (f) all copyrightable works;
and (g) all similar or related information. Notwithstanding the immediately
foregoing sentence, the term "Confidential Information" shall not include
information which (i) becomes generally available to the public other than as
a result of disclosure by Employee, or (ii) becomes available to Employee on
a non-confidential basis from a source other than the Company or the Related
Corporations, or (iii) which is generally known in the telecommunications
industry and pertains to activities or business not specific to the Company
or any of the Related Corporations. Information shall not be deemed to be
excluded from the meaning of "Confidential Information" merely because
individual portions or components of such information are publicly known or
available.
1.03 EFFECTIVE DATE. "Effective Date" shall mean 6 December 1999.
Employee will work at Carrier1 GmbH&Co.KG, Frankfurt/M, until such time that
the Employee has obtained valid work permits and registration documents as
required by the relevant Swiss authorities.
1.04 NON-COMPETE PERIOD. "Non-Compete Period" shall mean the period
commencing on the date hereof and continuing until the end of the eighteenth
month following the date the Employee`s employment is terminated.
1.05 PERSON. "Person" shall mean any individual, corporation,
partnership, joint venture, limited liability company, trust or other entity.
1.06 RELATED CORPORATIONS. "Related Corporations" shall mean (a) Carrier
1; (b) any corporation of which Carrier 1, directly or indirectly, owns more
than fifty percent (50%) of the outstanding equity securities having general
voting power under ordinary circumstances to elect at least a majority of the
directors of such corporation; (c) any partnership, association, joint
venture or other unincorporated organization or entity with respect to which
Carrier 1, directly or indirectly, owns equity securities in an amount
sufficient to control the management of such partnership, association, joint
venture or other unincorporated organization or entity; and (d) any
corporation, partnership, association, joint venture or other unincorporated
organization or entity in which Carrier 1, directly or indirectly, has more
than a fifty percent (50%) equity interest.
ARTICLE II
CAPACITY AND SERVICES
2.01 CAPACITY AND SERVICES. The Company hereby employs Employee as Vice
President of Stragetic Development in the Management Team of the Company and
Employee hereby accepts such employment for the Contract Term (as defined in
Section 2.03) and upon the other terms and conditions set forth in this
Agreement. During the Contract Term, Employee shall devote his professional
attention and energies on a full-time basis to the business and affairs of
the Company and the Related Corporations and use his best efforts to promote
its interests. The Employee may not undertake any public office or any kind
of activity in connection with associations without the prior written
approval of the Company, if this activity could influence the contractual
activities.
2.02 DUTIES. The Employee shall have such duties and responsibilities as
shall be assigned from time to time by the Company and are consistent with
the duties of a Vice President and Management Team Member in an international
long distance telecommunications company.
2.03 CONTRACT TERM. The present Employment Agreement is concluded for an
UNSPECIFIED PERIOD. The employment may be terminated by either party provided
that SIX (6) MONTHS notice of
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termination is given in writing to the end of a month, but not before
06.06.2001 (notice to be given before December 6th, 2000) (the period until
the Employee`s employment with the Company terminates being referred to as
the "Contract Term").
ARTICLE III
COMPENSATION; BENEFITS
3.01 BASE SALARY. The Company shall pay Employee a base salary at the
rate of 300,000 CHF per annum, payable in arrears on a monthly basis, for the
services rendered by Employee to the Company during the Contract Term (the
"Base Salary"). Overtime is not remunerated and time off is not given in
lieu; compensation for any overtime worked is included in the Base Salary.
The Base Salary and all other remuneration paid to the Employee shall be
subject to normal deductions for personal taxation and legally required
contributions. The Company shall review the Base Salary in December of 2000
and thereafter on a yearly basis for purposes of determining any increase
thereof, whether due to cost of living adjustments or merit, but any such
determination shall be made in the sole discretion of the Company without
regard to past practice.
3.02 BONUS PLAN. In addition to the Base Salary, during each year of the
Contract Term the Employee will be eligible to receive a bonus (the "Annual
Bonus") in an amount up to 25% of Base Salary (at 100% achievement) subject
to meeting the criteria established from time to time by the Company. The
Company, in its discretion, shall determine the amount of the Annual Bonus.
The Company will work in good faith promptly after the Effective Date to
develop the criteria for earning the Annual Bonus for the business year of
2000 and will meet at least annually to develop the criteria for future years.
3.03 STOCK PURCHASE AND OPTIONS. The employee will be entitled to invest
into the Common Stock of the Company's parent Carrier1 International S.A., up
to an amount of USD $68,240 at a price of $40.34 per share (1,692 shares). In
addition, the Company has a Share Option Plan under which the employee will
be entitled to 100,000 options as a Company Management Team Member at a
strike price per share option of $40.34 USD.
3.04 AUTOMOBILE. During the Contract Term the Company will ensure that
there will be made available free of charge to the Employee a motor vehicle
of a type suitable to his position for use by him in the performance of his
duties hereunder and for his private purposes.
3.05 MOBILE PHONE. During the Contract Term the Company will provide the
Employee a cellular telephone, a fixed telephone and fax line at home and
will pay all telephone charges and associated costs thereof related to his
duties hereunder.
3.06 PENSION. The Company has established a pension plan for its
Employees in compliance with Swiss law (the "Pension Plan"). The total
contribution to the Pension Plan (Company plus Employee) in each year will be
15% of Employee's Base Salary for such year, of which each of the Company and
Employee will contribute 50% (i.e. 7.5% of Base Salary each).
3.07 WORK LOCATION. Employee will perform his services out of the
Corporate Headquarters in Zurich, Switzerland. The Company will ensure that
payment of salary and other entitlements will be done in accordance with
Swiss law, including the obligations under tax, social security and pension
laws in Switzerland and the employee's home of record country (if applicable).
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3.08 BUSINESS EXPENSES. During the Contract Term, the Company will pay
the Employee CHF 500.00 per month as compensation for out of pocket expenses.
3.09 HOLIDAYS. The Employee shall be entitled to a vacation of 25 working
days per annum.
3.10 RELOCATION EXPENSES. The Company will pay the Employee all
relocation expenses incurred in the move of the Employee to Zurich including
costs of moving furnishings, personal effects, storage costs, costs for the
termination of the rent of his current residence and real estate agent fees
paid to locate a residence in Switzerland. In addition, the Company will pay
the Employee a one time lump sum of CHF 5,000.00 for miscellaneous relocation
expenses.
ARTICLE IV
CONFIDENTIALITY, NONCOMPETITION AND NONSOLICITATION
4.01 CONFIDENTIALITY. Employee acknowledges that in the course of
providing services to the Company and the Related Corporations, Employee will
become familiar with the trade secrets, Confidential Information and other
intellectual property concerning the Company and the Related Corporations.
Employee shall not at any time or in any manner, whether directly or
indirectly, use for his own benefit or the benefit of any other Person, nor
disclose, divulge, render or offer, any Confidential Information, except on
behalf of the Company or the Related Corporations in the course of the proper
performance of his duties hereunder. Employee acknowledges and agrees that
any and all such Confidential Information will be received and held by him in
a confidential capacity.
4.02 NONCOMPETITION AND NONSOLICITATION COVENANTS. Employee acknowledges
that (i) the services of the Employee are of special, unique and
extraordinary value to the Company and the Related Corporations and (ii) the
Company`s and the Related Corporations` ability to accomplish their purposes
and to successfully compete in the marketplace depend substantially on the
skills and expertise of the Employee. Employee acknowledges and agrees that
the Company and the Related Corporations would be irreparably damaged if
Employee were to not devote substantially all of his business time and
efforts to the business and affairs of the Company and the Related
Corporations during the Contract Term or were to provide directly or
indirectly services to any Person competing directly or indirectly with the
Company or any of the Related Corporations or were to engage in a similar a
business other than as specifically permitted by this Section 4.02.
Accordingly in further consideration of the compensation to be paid by the
Company to the Employee, Employee agrees, that from and after the date hereof
and during the applicable Non-Compete Period, Employee will not, singly,
jointly, or as an employee, agent or partner of any partnership or as an
officer, agent, employee, director, stockholder (except of not more than one
percent (1%) of the outstanding stock of any company listed on a national
securities exchange or actively traded in the over the counter market and
except for the interests and positions held as listed in appendix 1) or
investor in any other Person, or as a consultant, advisor, or independent
contractor to any such Person, or in any other capacity, directly, indirectly
or beneficially, anywhere in the world:
(i) own, manage, operate, join, control, or participate in the
ownership, management, operation, or control of, or work for (as an
employee, agent, consultant, advisor or independent contractor), or permit
the use of his name by, or provide financial or other assistance to, or be
connected in any manner with, any Person, which is in the international
long distance telecommunications business or other business which is in
direct or indirect
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competition with any business conducted by the Company or any of the
Related Corporations on the date hereof or at any time during the
applicable Non-Compete Period;
(ii) induce or attempt to induce any individual who, on the date
hereof or at any time during the applicable Non-Compete Period, is an
Employee of the Company or any of the Related Corporations, to terminate
his or her employment with such company or employ any such person in any
manner of capacity; or
(iii) induce or attempt to induce any Person, which is a supplier,
distributor, or customer of the Company or any of the Related Corporations
or which otherwise is a contracting party with the Company or any of the
Related Corporations, as of the date hereof or at any time during the
applicable Non-Compete Period, to terminate or modify any written or oral
agreement or understanding with the Company or any of the Related
Corporations.
Employee acknowledges and agrees that the limitations set forth in this
Section 4.02 are reasonable with respect to scope, duration and area and are
properly required for the protection of the legitimate business interest of
the Company and the Related Corporations. The Company and Employee agree that
the covenants set forth in this Section 4.02 shall be enforced to the fullest
extent permitted by law. Accordingly, if in any arbitration, judicial or
similar proceeding a court, an arbitration or any similar judicial or
administrative body shall determine that such covenant is unenforceable
because it covers too extensive a geographical area or survives too long a
period of time, or for any other reason, then the parties intend that such
covenant shall be deemed to cover only such maximum geographical area and
maximum period of time and shall otherwise be deemed to be limited in such
manner as will permit enforceability by such arbitrator, court or similar
body.
4.03 INFRINGEMENT OF EMPLOYEE'S OBLIGATION. If the Employee violates or
infringes his obligations under Section 4.01 and/or 4.02, the Employee shall
pay the Company a contractual penalty in the amount of the greater of 30% of
Base Salary or 30% of the total remuneration paid to Employee by his new
employer, for each case of infringement or breach. The payment of this
penalty does not in any case release the Employee from his obligations with
regard to this Agreement.
4.04 SPECIFIC PERFORMANCE. Employee agrees that his breach of the
provisions of Sections 4.01 or 4.02 above will cause irreparable damage to
the Company and the Related Corporations and that the recovery by the Company
and the Related Corporations of money damages will not constitute an adequate
remedy for such breach. The Employee agrees that the Company may request the
elimination of a situation contrary to this Agreement.
4.05 REPRESENTATIONS. Employee hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement
does not and will not conflict with breach, violate or cause a default under
any contract, agreement, instrument, order, judgment or decree to which
Employee is a party or by which he is bound, (ii) Employee is not a party to
or bound by any employment agreement, noncompetition agreement or
confidentiality agreement with any other Person which, in the good faith
judgment of Employee, will materially interfere with the performance of the
Employee duties and obligations hereunder or otherwise have a material
adverse affect on the Company and (iii) this Agreement is the valid and
binding obligation of Employee, enforceable in accordance with its terms.
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ARTICLE V
MISCELLANEOUS
5.01 ASSIGNMENT. This Agreement is personal to Employee and shall not be
assigned, transferred, hypothecated, pledged or in any way encumbered by him;
provided, that the rights and obligations of Employee hereunder shall be
binding upon, and inure to the benefit of, Employee`s estate. This Agreement
shall be binding upon, and inure to the benefit of, the Company`s successors
and assigns.
5.02 AMENDMENT. This Agreement may not be amended, modified or
supplemented in any respect except by written agreement entered into by the
parties hereto.
5.03 GOVERNING LAW; COMPETENT COURT. This Agreement shall be governed by
and construed in accordance with the laws of Switzerland. Except with respect
to the enforcement of the Company's injunctive and other equitable remedies
pursuant to Section 5.04 hereof. Any dispute arising under this Agreement
shall be submitted to arbitration, the determination of which shall be final
and binding on the parties hereto and which arbitration shall be held in
accordance with Article 343, paragraph 1 of the Code and the rules and
procedures of the International Chamber of Commerce applicable to commercial
transactions and conducted in English. The cost of such arbitration shall be
borne by the party or parties in accordance with the arbitration judgment.
Employee, to the extent that he may lawfully do so, hereby consents to the
jurisdiction of the courts of Switzerland as well as to the jurisdiction of
all courts from which an appeal may be taken from such courts, for the
purpose of any suit, action or other proceeding arising out of enforcement of
any such arbitration award or any of his obligations under Article V hereof,
and hereby expressly waives any and all objections which he may have as to
venue in any such courts. It is acknowledged and agreed that all of the other
agreements referred to herein, including the Share Option Agreement, are
governed by and shall be construed under the laws of Delaware (USA).
5.04 COUNTERPARTS; HEADINGS. This 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. The headings of
the Articles and Sections of this Agreement are inserted for convenience only
and shall not constitute a part hereof.
5.05 ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties pertaining to the subject matter contained in it and supersedes
and is in lieu of any and all other employment arrangements between Employee
and the Company.
5.06 NOTICES. All notices given hereunder shall be in writing and shall
be delivered personally or sent by prepaid registered or certified mail,
return receipt requested, or by nationally recognized overnight courier
service, and addressed as follows:
If to the Company:
Carrier1 GmbH
Militarstr. 36
8004 Zurich
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If to Employee:
Alex Schmid
All notices shall be deemed to be given on the date received at the address
of the addressee, or, if delivered personally, on the date delivered.
5.07 SEVERABILITY. Any provision of this Agreement which is held by a
court of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement of affecting the validity or
enforceability of such provision in any other jurisdiction.
IN WITNESS WHEREOF, Employee has executed this Agreement and the Company has
caused this Agreement to be executed as of the day and year first above
written.
Carrier1 International GmbH
By: /s/ STIG JOHANSSON
-------------------------------------------------
Name: Stig Johansson
Title: President & CEO
By: /s/ KEES VAN OPHEM
-------------------------------------------------
Name: Kees van Ophem
Title: Vice President, Purchase & General
Counsel
Employee:
/s/ ALEX SCHMID
-------------------------------------------------
Alex Schmid Date
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CARRIER1
MEMORANDUM
To: Mr Alex Schmid
Subject: Contract Supplement for Change of Contractual Conditions
Dear Alex,
We hereby acknowledge that your contractual conditions will be adjusted as
indicated below:
Paragraph 3.08 BUSINESS EXPENSES is amended, effective 1
August 2000, to read:
Paragraph 3.08 REPRESENTATION ALLOWANCE: During the Contract
Term, the Company will pay the Executive CHF 1,500 per month
as compensation for out of pocket representation expenses.
Paragraph 3.11 is inserted, effective 1 January 20001, to
read:
Paragraph 3.11 HEALTH INSURANCE: The Executive is obligated to
have a private health insurance which provides full cover in
Switzerland and while the Executive is on business trips
outside Switzerland. The Company will contribute 50% of the
related private health insurance for the Executive and each of
the family members, not to exceed CHF 200 per month per family
member.
Thank you for your acknowledgement.
Best regards,
/s/ KEES VAN OPHEM /s/ TOM ZAHAY
- ------------------------------- ----------------------------------
Kees van Ophem Tom Zahay
Executive Vice President Vice President
& General Counsel Human Resources
/s/ ALEX SCHMID
- -------------------------------
Agreed: Alex Schmid
CC: Judith Zollinger
HR Coordinator
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