Employment Agreement - SAVVIS Communications Corp. and Jack M. Finlayson
[SAVVIS LOGO]
December 28, 1999
Mr. Jack M. Finlayson
[Address]
Dear Mr. Finlayson:
On behalf of SAVVIS Communications Corporations, I would like to make the
following offer to you to join SAVVIS Communications as the President and Chief
Operating Officer (COO). As the President and Chief Operating Officer you will
report to me as Chief Executive Officer.
Employment Start Date
December 31, 1999
Salary and Bonus
Your base salary will be $400,000 per year. You will also be eligible to receive
an annual incentive bonus of up to $600,000 based on attainment of mutually
agreed to objectives. You are guaranteed to receive no less than $400,000 in
annual incentive bonus for the year 2000. The annual incentive bonus will be
paid within 30 days of year-end.
Stock Options
You will receive incentive stock options to purchase 650,000 shares of the
Company's common stock at a strike price of $.50 per share. Your option grant
will be made in its entirety on December 31, 1999 and vest based on the
following schedule:
o 200,000 will vest and become exercisable at the start of employment with
the Company (i.e., December 31, 1999)
- Of these, 50,000 shares may be sold by you immediately at the start of
employment with the Company or at any time thereafter (subject to SEC
or other restrictions imposed by the underwriters), and the other
150,000 shall become saleable by you on a monthly straight line pro
rata basis over calendar year 2000 (subject to SEC or other
restrictions imposed by the underwriters), with your right to sell
being cumulative.
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o The remaining 450,000 shares will vest and become exercisable on
January 3, 2000.
- All of these shares shall become saleable by you on a monthly straight
line pro rata basis over calendar year 2001, 2002 and 2003 (subject to
SEC or other restrictions imposed by the underwriters), with your right
to sell being cumulative.
All of the shares may be sold by you upon change of control or the sale of
substantially all of the Company's assets, or at any time thereafter.
You may sell all of the shares at any time after a termination of employment by
the Company without "Cause" or by you for Good Reason.
If your employment is terminated for "Cause", the Company will have the right to
buy all shares not yet saleable by you at the price you paid for the shares on
written notice given to you within 15 days after such termination of employment.
Continuation of the right to exercise all vested options will continue for one
year after termination of employment unless termination is for cause.
Benefits
Standard health and insurance programs consistent with other senior executives.
Severance Benefits
In the event the Company terminates your employment without "Cause" or you
terminate your employment for Good Reason, you will be entitled to receive a
lump sum severance payment equal to your then current base annual salary (which
for this purpose shall not be less than your highest annual salary from the
Company). The severance payment will be due within 30 days of your last day of
employment.
Change of Control
For purposes of this agreement "Change of Control" shall include but not be
limited to a merger or consolidation of the Company or a subsidiary with another
company as a result of which more than 50% of the outstanding shares of the
Company after the transaction are owned by shareholders who were not
shareholders of the Company before the transaction.
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In the event of a "Change of Control" of the Company while you are employed by
the Company and upon the request of the new ownership given to you in writing no
later than 15 days after the date of such change of control, you shall remain
with the Company on the terms and conditions set forth in this letter for a
period of time up to twelve months from the date of "Change of Control" provided
that none of the conditions of "Termination by You for Good Reason" are
violated. For purposes of the paragraph you shall not be deemed to be terminate
for good reason solely on account of your being asked to remain with the Company
in a transitional role.
The Company will gross you up for any parachute taxes you incur under Internal
Revenue Code section 4999 as a result of such a change of control.
Termination for Cause
Your employment with SAVVIS Communications may be terminated with "Cause" at any
time without notice, for purposes of this agreement, "Cause is defined as (i)
any conduct by you as an employee of SAVVIS Communications that violate state or
federal laws, or company policies and standards of conduct (ii) dishonesty by
you in performance of your duties as an employee of SAVVIS, or (iii) willful
misconduct by you that you know (or should know) will materially injure the
reputation of SAVVIS. If you are terminated for Cause, you will not be entitled
to severance benefits.
Termination by Your for Good Reason
For purposes of this agreement, a termination of employment by you for Good
Reason will be deemed to include a termination of your employment by you after
(a) your title, authority, duties or responsiblitites are substantially reduced
without your written consent, or (b) the Company fails to fulfil its salary,
bonus or stock option obligations described above.
If the Company fails to fulfill its salary, bonus, stock options, severance or
gross up obligations described above, it will pay you reasonable costs and
expenses you incur to obtain payment.
Please confirm your acceptance of this offer by signing this letter and
returning it to me. This offer will remain open and irrevocable until January 3,
2000.
Very truly yours, Accepted:
/s/ Robert McCormick
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Robert McCormick /s/ Jack M. Finlayson
Chief Executive Officer ----------------------
Jack M. Finlayson
Date: 12/31/99