Exhibit 10.20

 

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made and entered into as of the 15th day of September, 2005 by
and between Globix Corporation, a Delaware corporation (hereinafter referred to
as the “Company”), and Peter Stevenson, a resident of the Commonwealth of
Virginia (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 December 31, 2006, 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. Except as set forth in Section 6.3 hereof, during the Term,
the Executive shall serve as the President and Chief Executive Officer of the
Company, reporting to the Board of Directors of the Company.

Section 5.   Extent of Service; Facilities. During the Term, the Executive shall
be required to devote substantially all of his professional time, energy and
attention 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. Executive will be entitled to five (5) weeks of paid
vacation and to paid personal/sick/bereavement days in accordance with Company
policy. 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.

 

 

-1-

 

--------------------------------------------------------------------------------

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 30 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 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 or its authorized designee, 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 9.5 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 prior to the end of any Employment Period, the Company
shall pay to the Executive any compensation due through the end of said
Employment Period, plus reimbursement of any cost incurred by the Executive
under COBRA in connection with continuing health care coverage for the Executive
and the Executive’s dependents through the end of said Employment Period. 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.
Additionally, all stock options issued to the Executive that are scheduled to
vest over the 180 day period following such termination shall immediately become
vested and exercisable. 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

 

 

-2-

 

--------------------------------------------------------------------------------

Agreement will be deemed to constitute, in part, liquidated damages and not a
penalty. Further, the Company agrees that any and all payments required to be
made to the Executive hereunder are not and shall not be subject to any duty of
mitigation.

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 Company has agreed to maintain
the life insurance policy specified in Schedule A hereof, and it is therefore
understood that if the Executive dies during the Employment Period, the
Executive’s estate shall receive no further compensation pursuant to this
Agreement. 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 compensation (including Base Salary, bonus and options)
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.
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.

 

 

-3-

 

--------------------------------------------------------------------------------

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 Directors may terminate the Executive’s employment
under this Agreement upon ten (10) days’ prior written notice. If any
determination of the Board of Directors with respect to permanent disability is
disputed by the Executive, the Parties hereto agree to abide by the decision of
a panel of three physicians. The Executive and the Company will each appoint one
member, and the third member of the panel will be appointed by the other two
members. The Executive agrees to make himself available for and to submit to
examinations by such physicians as may be directed by the Company. Failure to
submit to any such examination will constitute acceptance by the Executive of
the determination made by the Board of Directors.

Section 7.  

Covenants of Executive.

Section 7.1   Executive Cooperation. The Executive agrees, in the exercise of
his fiduciary duties as officer and director, to assist and cooperate with the
Company in connection with the defense or prosecution of any claim that may be
made against or by the Company, or in connection with any investigation or
dispute or claim of any kind involving the Company, except in each case a
dispute or claim brought by the Executive.

Section 7.2   Rights and Remedies upon Breach. The Executive agrees that any
breach of this Agreement would cause irreparable harm to the Company and that,
in the event of such breach, the Company shall have, in addition to all other
remedies at law, the right to an injunction, specific performance or other
equitable relief to prevent or redress the violation of the Executive’s
obligations hereunder.

Section 8.  

Restrictive Covenants.

Section 8.1   Company Property. The Executive agrees that all client, supplier
and distributor lists, client data, financial or other data, computer software
programs, source codes, plans, contracts, agreements, literature, manuals,
catalogs, brochures, books, records, research, charts, maps, correspondence and
other materials furnished to the Executive by the Company or any of its
affiliates, or secured through the efforts of the Executive and relating to the
business conducted by the Company or any of its affiliates, are and shall remain
the property of the Company, and/or its affiliates, and the Executive agrees to
deliver all such materials, including all copies thereof, to the Company upon
the termination of the Executive’s employment hereunder, or at any other time at
the Company’s request.

 

 

-4-

 

--------------------------------------------------------------------------------

Section 8.2   Disclosure and Confidentiality. The Executive agrees that during
the Employment Period, he will disclose and disclose only to the Company all
material ideas, methods, plans, developments or improvements known by him which
relate directly or indirectly to the business of the Company, whether acquired
by the Executive before or during his employment by the Company. Nothing herein
will be construed as requiring any such communication where, in the Executive’s
reasonable judgment, the idea, plan, method or development is lawfully protected
from disclosure, whether as a trade secret or otherwise. The Executive agrees to
keep in strict secrecy and confidence any and all information the Executive
assimilates or to which he has access during his employment by the Company and
which has not been publicly disclosed and is not a matter of common knowledge in
the fields of work of the Company, and/or to which the Executive would not have
been exposed but for his employment by the Company. The Executive agrees that
both during and after the Employment Period, he will not, without the prior
written consent of the Company, disclose to any third person, partnership, joint
venture, company, corporation or other organization, or use for such third
party’s or his own benefit, any such confidential information. Each Party also
agrees that it will not disparage the other Party following any termination of
the Executive’s employment hereunder.

Section 8.3    Non-Competition; Non-Solicitation. The Executive acknowledges
that, during and solely as a result of his employment by the Company, he has
received and will continue to have access to confidential information and
business and professional contacts related to the business of the Company. In
consideration of the special and unique opportunities afforded to the Executive
by the Company as a result of the Executive’s employment, as outlined in the
previous sentence, the Executive hereby agrees as follows:

In the event the Executive is terminated for Cause or voluntarily resigns his
position with the Company, then for a period ending three (3) months following
such termination of his employment under this Agreement, the Executive will not,
without the prior written consent of Company, (i) directly or indirectly engage
in any business the primary focus of which is the provision of web hosting and
collocation services (a “Competing Business”), or otherwise receive compensation
for any services rendered regarding any aspect of a Competing Business anywhere
within the geographic area of any such business operated by the Company, or (ii)
engage or participate, directly or indirectly, in any such business which is
substantially similar to that of the Company, including, without limitation,
serving as a consultant, administrator, officer, director, employee, manager,
landlord, lender, guarantor, or in any similar or related capacity or otherwise
receive compensation for services rendered regarding any aspect of such a
business anywhere within the geographic area of such business operated by the
Company. The mere ownership of a de minimus amount of securities in any
competitive enterprise and exercise of rights appurtenant thereto, and
participation in management of any such enterprise or business operation other
than in connection with the competitive operation of such enterprise, are not
prohibited. Notwithstanding the foregoing, the Parties agree

 

 

-5-

 

--------------------------------------------------------------------------------

that if the Executive notifies the Company of his intention not to renew this
Agreement as provided above, such non-renewal will not be deemed to be a
termination of employment giving rise to the rights of the Company and
obligations of the Executive contemplated by this Section.

During his employment with the Company and, except as may be otherwise herein
provided, for a period of one (1) year following the termination of his
employment with the Company, regardless of the reason for such termination, the
Executive agrees he will not (directly or indirectly, as an individual, partner,
officer, director, stockholder, employee, advisor, independent contractor, joint
venturer, consultant, agent, representative, salesman or otherwise) solicit any
employees of Company to terminate their employment.

The period of time during which the Executive is prohibited from engaging in
certain business practices pursuant to this Section will be extended by any
length of time during which the Executive is in breach of such covenants.

It is understood by and between the Parties hereto that the restrictive
covenants set forth herein are essential elements of this Agreement, and that,
but for the agreement of the Executive to comply with such covenants, the
Company would not have agreed to enter into this Agreement.

It is agreed by the Company and the Executive that if any portion of the
covenants set forth in this Section are held to be invalid, unreasonable,
arbitrary or against public policy, then such portion of such covenants will be
considered divisible both as to time and geographical area. The Company and the
Executive agree that, if any court of competent jurisdiction determines the
specified time period or the specified geographical area applicable to this
Section to be invalid, unreasonable, arbitrary or against public policy, a
lesser time period or geographical area which is determined to be reasonable,
non-arbitrary and not against public policy may be enforced against the
Executive. The Company and the Executive agree that the foregoing covenants are
appropriate and reasonable when considered in light of the nature and extent of
the business conducted by the Company.

Section 8.4   Provisions Survive Termination of Agreement. Except as expressly
provided in any other written agreement between the Company and the Executive,
the provisions of this Section (and Sections 7 and 9) shall survive the
termination of this Agreement and the Executive’s employment with the Company
hereunder.

 

 

-6-

 

--------------------------------------------------------------------------------

 

Section 9.   

General.

Section 9.1    Supersedes Prior Agreements. This Agreement supersedes all prior
agreements and understandings between the Executive and the Company or any of
its affiliates or their respective directors, officers, shareholders, employees,
attorneys, agents or representatives, and constitutes the entire Agreement
between the parties, respecting the subject matter hereof and there are no
representations, warranties or commitments other than those expressed herein.

Section 9.2   Other Agreements. The Executive represents and warrants to the
Company that the Executive is not a party to or bound by, and the employment of
the Executive by the Company or the Executive’s disclosure of any information to
the Company or its utilization of such information will not violate or breach
any, employment, retainer, consulting, license, non-competition, non-disclosure,
trade secrets or other agreement between the Executive and any other person,
partnership, corporation, joint venture, association or other entity.

Section 9.3   Amendment. No modification or amendment of, or waiver under, this
Agreement shall be valid unless in writing and signed by the Executive and an
officer of the Company pursuant to express authority granted by the Company.

Section 9.4   Waiver. The waiver by the Company or the Executive of a breach of
any provision of this Agreement by the other shall not operate or be construed
as a waiver of any subsequent breach.

Section 9.5   Notices. Each notice, request, demand, approval or other
communication which may be or is required to be given under this Agreement shall
be in writing and shall be deemed to have been properly given when received
personally at the address set forth below for the intended party during normal
business hours at such address, when received by facsimile or other electronic
transmission at the respective facsimile transmission numbers of the parties set
forth below, or when received by recognized overnight courier or by United
States registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

If to the Company:

Globix Corporation

139 Centre Street

New York, New York 10013

Attn: Chief Financial Officer

If to the Executive:

At his address on the records of the Company;

 

 

-7-

 

--------------------------------------------------------------------------------

or such other address as he may from time to time designate to the Company.

Notices may be given to such other address or addresses or by way of such other
facsimile transmission number, as a particular party may from time to time
designate by written notice to the other party hereto. Each notice, request,
demand, approval or other communication which is sent in accordance with this
Section shall not be deemed delivered, given and received for all purposes of
this Agreement until actually received by the other party.

Section 9.6   Successors; Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and the Executive and their respective heirs,
personal representatives, permitted assignees and successors. Neither party may
assign this Agreement; provided, however, that the Company may, without the
prior consent of the Executive, assign this Agreement to an entity to which the
Company has sold all or substantially all of its assets. The Company shall
obtain an agreement from a successor who purchases all or substantially all of
the assets of the Company to assume and agree to perform this Agreement.

Section 9.7   Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to conflict
of laws provisions thereof. The parties agree that the personal jurisdiction and
venue of any action brought under this Agreement shall be in the state or
federal courts located in New York State.

Section 9.8   Headings. The headings in this Agreement are for reference only
and shall not affect the interpretation of this Agreement.

Section 9.9   Unenforceable Terms. In the event any term or provision of this
Agreement shall for any reason be invalid, illegal, or unenforceable in any
respect, this Agreement shall be interpreted and construed as if such term or
provision had never been included herein and the validity and enforceability of
any other provision hereof shall be unaffected thereby.

Section 9.10   Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one and the same
agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as of the day and year first above written.

 

 

-8-

 

--------------------------------------------------------------------------------

SCHEDULE A

TO

EMPLOYMENT AGREEMENT

BETWEEN PETER STEVENSON AND GLOBIX CORPORATION

COMPENSATION

1.  Salary.  During the Term, the Company shall pay to the Executive an
annualized salary (“Base Salary”) of $350,000, payable in accordance with the
Company’s normal business practices or in such other amounts and at such other
times as the Parties may mutually agree.

2.  Salary Increases.  Such Base Salary shall be reviewed no less frequently
than annually during the Term of this Agreement and may be increased but not
decreased by the Company’s Board of Directors in its sole and absolute
discretion, after taking into consideration a variety of factors, including,
without limitation, the performance of the Executive and the Company and the
base salary (and raises) paid by comparable companies to executives having
comparable responsibilities. In the event of any increase, the increased amount
shall become the Base Salary.

3.  Bonuses.  The Executive shall be eligible for an annual bonus (the “Bonus”)
equal to up to 50% of the Base Salary, which bonus shall be payable by the
Company upon the Executive and the Company achieving the performance targets
established for him each year by the Compensation Committee (the “Performance
Targets”). In the event that no targets are established, the achievement of the
Company’s approved budget for the fiscal year shall serve as a guide for
determining the appropriate achievement level, allocated among the various
budgeted objectives as the Compensation Committee shall deem appropriate in its
sole and absolute discretion. The Bonus, to the extent payable, will be payable
not more than 90 days following the end of the Company’s fiscal year. In
establishing performance targets and target bonus percentages for the Executive,
the Company will consider a variety of factors, including, without limitation,
performance targets set for, and bonus payments paid to, executives having
comparable responsibilities at comparable companies.

In addition to the bonuses contemplated by the foregoing paragraph, the
Executive shall be eligible for a bonus from time to time relating to certain
extraordinary items, in the sole and absolute discretion of the Board of
Directors or the Compensation Committee thereof.

4.  Life Insurance.  The Company shall obtain and pay for a term life insurance
policy insuring against the death of the Executive in the amount of at least
$1,000,000, and naming such beneficiaries as the Executive shall designate from
time to time.

5.  Expenses.  The Company shall reimburse the Executive for all reasonable
out-of-pocket expenses incurred in connection with his employment hereunder, in
accordance

 

 

-9-

 

--------------------------------------------------------------------------------

with Company policy (including those expenses incurred by the Executive for
lodging within the New York City metropolitan area during the work week and for
weekly roundtrip transportation between New York and Northern Virginia). The
parties further agree that the reasonable expense of maintaining an office in
Virginia which (subject to the Parties’ mutual understanding that the Executive
shall be present at the Company’s headquarters in New York City as often and for
such periods as the Board of Directors deems advisable) shall be deemed the
Executive’s principal place of employment, will be covered by the Company,
subject to the approval of the Compensation Committee as to scope and cost.

6.   Benefits. The Executive will be entitled to such fringe benefits,
including, but not limited to, medical, 401(k) and insurance benefits, as may be
provided from time to time by Company to other senior officers of Company.

7.   Indemnification. The Company agrees to indemnify the Executive to the
fullest extent permitted under law and its by-laws, certificate of incorporation
or otherwise.

8.   Pursuant to a separate Non-Qualified Stock Option Agreement (the “Option
Agreement”) between the Company and the Executive, the Company will issue to the
Executive options to purchase an additional 320,888 shares of common stock (in
addition to his currently vested 548,667 options) at an exercise price of $2.75
per share. The Option Agreement will be subject to the terms of the Company
Stock Option Plan, and will detail performance targets and will provide for
immediate vesting in case of “change of control” or termination without Cause.
The Option Agreement shall provide that all currently issued and vested options,
as well as options to be granted, to the extent subsequently vested, will have
an exercise period of 6 months following the date of any termination.

 

-10-

 

--------------------------------------------------------------------------------

GLOBIX CORPORATION:

 

 

By: 

     [dimg1.gif]

9/23/05

 

Robert M. Dennerlein
Vice President and Chief Financial Officer

 

 

EXECUTIVE:

[eimg2.jpg]

PETER STEVENSON

 

 

-11-

 

--------------------------------------------------------------------------------