PRODIGY COMMUNICATIONS CORP
EXHIBIT 10.14
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<TYPE>EX-10.14
<SEQUENCE>5
<FILENAME>a2043222zex-10_14.txt
<DESCRIPTION>EXHIBIT 10.14
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                                                                   Exhibit 10.14

                              EMPLOYMENT AGREEMENT

        EMPLOYMENT AGREEMENT (the "Agreement"), effective as of the 1st day of
June, 2000, between Prodigy Communications Corporation, a Delaware corporation
(the "Company"), with its principal place of business at 44 South Broadway,
White Plains, New York 10601, and Andrea S. Hirsch, residing at 345 East 86th
Street, Apt. 8B, New York, NY 10028 (the "Executive").

        WHEREAS, the Company has entered into an agreement dated November 19,
1999 with SBC Communications Inc. (the "Investment Agreement") pursuant to
which SBC will acquire an indirect equity interest in the Company on the
Closing Date (as defined in the Investment Agreement); and

        WHEREAS, the Company desires to continue to employ the Executive as
Executive Vice President of the Company and of Prodigy Communications Limited
Partnership, and the Executive desires to be employed in that capacity
following the Closing Date on the terms and conditions set forth herein;

        NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:

1.      TERM OF EMPLOYMENT.

        The Company hereby agrees to continue to employ the Executive, and the
Executive hereby accepts employment with the Company and with Prodigy
Communications Limited Partnership, upon the terms set forth in this Agreement,
for the period commencing on the Closing Date (the "Commencement Date"), and
ending on September 14, 2001 (the "Employment Period"), unless sooner
terminated in accordance with the provisions of Section 4.

2.      TITLE; CAPACITY.

        The Executive shall serve as Executive Vice President, Business
Development and General Counsel of the Company and of Prodigy Communications
Limited Partnership. The Executive shall be based in White Plains, New York or
such other place as the Board of Directors of the Company (the "Board") shall
determine. The Executive shall report to and be subject to the supervision of,
and shall have such authority as is delegated to Executive by the Company's
Chairman and Chief Executive Officer or such other senior executive that may be
designated by the Chairman.

        The Executive hereby accepts such employment and agrees to undertake
the duties and responsibilities inherent in such position, and such other
duties and responsibilities as the Chairman shall from time to time reasonably
assign to the Executive. The Executive shall devote Executive's entire business
time, attention and energies to the business and interests of the Company
during the Employment Period. The Executive shall abide by the rules,
regulations,


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instructions, personnel practices and policies of the Company and any changes
therein which may be adopted from time to time by the Company.

3.      COMPENSATION AND BENEFITS.

        3.1     SALARY. The Company shall pay the Executive, in accordance with
        its normal payroll practices, an annual base salary of $218,700
        commencing on the Commencement Date. Based on performance, such salary
        shall be subject to increase consistent with existing merit increase
        guidelines.

        3.2     PERFORMANCE BONUSES. The Executive shall be eligible to
        participate in an annual bonus plan and receive up to 50% of her annual
        base salary as a performance bonus during each calendar year of the
        Employment Period. During each such year, 50% of such bonus shall be
        contingent upon the successful completion of personal goals as mutually
        agreed between the Executive and the Chairman, and 50% of such bonus
        shall be contingent upon the successful completion of corporate goals as
        determined by the Company. Such performance bonus shall be determined
        and paid within 45 days after the end of each such calendar year during
        the Employment Period. If the Executive terminates employment with the
        Company at any time prior to the end of the applicable calendar year,
        the Executive shall be entitled to receive the performance bonus only in
        accordance with the provisions of Article 5.

        3.3     RETENTION BONUS. The Executive shall be entitled to receive a
        retention bonus in the amount of $328,050, which shall be earned on the
        60th day following the Closing Date provided that the Executive's
        employment has not terminated prior to such date (except as otherwise
        provided in Section 5.3). The retention bonus (to the extent earned)
        will be paid as soon as practicable following the 60th day following the
        Closing Date.

        3.4     OPTION GRANT.

                (a)     The Company has previously granted the Executive options
        to purchase 93,750 shares of common stock of the Company as set forth in
        the attached option Summary, of which options to purchase 88,750 shares
        of common stock of the Company remain outstanding (the "Outstanding
        Options"). As of the Closing Date, 50% of each non-vested Outstanding
        Option at each strike price shall become immediately exerciseable. On
        the 60th day following the Closing Date, the remaining non-vested
        Outstanding Options shall become immediately exerciseable, provided that
        the Executive's employment has not terminated prior to that date (except
        as otherwise provided in Section 5.3). The exercise period for the
        Outstanding Options (to the extent otherwise exerciseable) shall be
        extended to 12 months after the Executive's termination or resignation
        in accordance with the provisions of Section 4.

                (b)     During the Employment Period, the Company will consider
        in good faith on an annual basis the grant of additional stock options
        to Executive.

        3.5     FRINGE BENEFITS. The Executive shall be entitled to participate
        in all fringe benefit programs that the Company establishes and makes
        available to its Executives from time to time to the extent that
        Executive's position, tenure, salary, age, health and other


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        qualifications make her eligible to participate. The Executive's
        vacation entitlement shall be four weeks per year.

        3.6     REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
        Executive for all reasonable travel, entertainment and other expenses
        incurred or paid by the Executive in connection with the performance of
        her duties hereunder, upon presentation by the Executive of
        documentation, expense statements, vouchers and/or such other supporting
        information as the Company may request; PROVIDED, HOWEVER, that the
        nature and amount of such expenses shall be subject to the Company's
        expense policies as in effect from time to time.

4.      EMPLOYMENT TERMINATION.

        The employment of the Executive pursuant to this Agreement shall
terminate upon the occurrence of any of the following:

        4.1     At the election of the Company, for Cause (as hereinafter
        defined) immediately upon written notice by the Company to the
        Executive. For purposes of this Agreement, "Cause" shall mean (a) a good
        faith finding by the Board, after notice to the Executive and an
        opportunity to be heard, of the failure of the Executive to perform her
        reasonably assigned duties, or the Executive's gross dishonesty, gross
        negligence or gross misconduct, or (b) the conviction of the Executive
        of, or the entry of a plea of guilty or nolo contendere by the Executive
        to, any felony;

        4.2     Thirty days after the death or Disability (as hereinafter
        defined) of the Executive. For purposes of this Agreement, "Disability"
        shall mean the inability of the Executive, due to a physical or mental
        disability, for a period of 90 days, whether or not consecutive, during
        any 360-day period to perform, with or without reasonable accommodation,
        the services contemplated under this Agreement. A determination of
        Disability shall be made by a physician satisfactory to both the
        Executive and the Company; PROVIDED THAT if the Executive and the
        Company do not agree on a physician, the Executive and the Company shall
        each select a physician and these two together shall select a third
        physician, whose determination as to Disability shall be binding on all
        parties;

        4.3     At the election of the Executive, upon not less than two (2)
        weeks' prior written notice of termination, or at the election of the
        Company, upon written notice of termination; or

        4.4     Upon the expiration of the Employment Contract.

5.      EFFECT OF TERMINATION.

        5.1     TERMINATION FOR CAUSE OR AT ELECTION OF THE EXECUTIVE. In the
        event the Executive's employment is terminated for Cause pursuant to
        Section 4.1, or the Executive's employment is terminated at the election
        of the Executive pursuant to Section 4.3, the Company shall, through the
        last day of her actual employment by the Company, continue to pay to the
        Executive her base salary as in effect on the date of notice of
        termination and continue to provide to the Executive the fringe benefits


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        available to her under Section 3.5 hereof, as of the last day of actual
        employment. In addition, in the event the Executive's employment is
        terminated at the election of the Executive pursuant to Section 4.3,
        subject to the Executive's compliance with the provisions of Sections 6
        and 7 below and execution of a general release of claims against the
        Company and its affiliates in the form provided by the Company, the
        Executive shall be entitled to receive a pro rata share of the
        performance bonus referenced in Section 3.2, covering the period from
        the beginning of the year up to the date of termination.

        5.2     TERMINATION FOR DEATH OR DISABILITY. If the Executive's
        employment is terminated due to death or Disability pursuant to Section
        4.2, the Company shall continue to pay to the estate of the Executive or
        to the Executive, as the case may be, for a period of 90 days after
        termination of employment due to death or Disability, the Executive's
        base salary as in effect on the date of termination.

        5.3     TERMINATION AT ELECTION OF COMPANY (WITHOUT CAUSE). If the
        Executive's employment is terminated at the election of the Company
        pursuant to Section 4.3, the Company shall, through the last day of her
        actual employment by the Company, continue to pay the Executive her base
        salary as in effect on the date of notice of termination and continue to
        provide the Executive the fringe benefits available to her under Section
        3.5 hereof, as of the last day of actual employment. In addition,
        subject to the Executive's compliance with the provisions of Sections 6
        and 7 below and execution of a general release of claims against the
        Company and its affiliates in the form provided by the Company, the
        Executive shall be entitled to: (i) receive a pro rata share of the
        performance bonus referenced in Section 3.2, covering the period from
        the beginning of the year up to the date of termination; and (ii)
        receive the unpaid amount of the retention bonus to which she would
        otherwise be entitled under Section 3.3, which amount shall be payable
        on the payment date specified in Section 3.3. Additionally, option
        vesting shall be accelerated so that as of the termination date, all
        remaining unvested options granted at each strike price shall vest. The
        Executive shall have one year after the termination date to exercise the
        vested options. If this paragraph conflicts with any applicable Stock
        Option Agreement, this paragraph shall control.

        5.4     COBRA COSTS. If the Executive's employment with the Company is
        (i) terminated after the 60th day following the Closing Date for any
        reason except termination by the Company for Cause pursuant to Section
        4.1 or (ii) terminated by the Company without Cause at any time after
        the Closing Date pursuant to Section 4.3, the Company shall reimburse
        the Executive for the cost of COBRA insurance premiums to continue the
        Executive's group health coverage for a period of 12 months following
        termination of employment.

        5.5     SURVIVAL. The provisions of Sections 3.3, 5.2, 5.3, and 5.4
        shall survive the expiration or termination of this Agreement under the
        circumstances specified in those Sections for the periods specified in
        such Sections. Sections 6 and 7 shall survive the termination of this
        Agreement.

6.      NON-COMPETE.


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                (a)     During the Executive's active employment and for a
        period of six months following the Executive's termination of
        employment, the Executive will not:

                        (i) be a partner, stockholder (other than as the holder
                of not more than one percent (1%) of the total outstanding stock
                of), officer, employee, consultant, director, joint venture,
                investor or lender of or to America Online, Inc., Microsoft
                Network, AT&T WorldNet, EarthLink Network, Inc., or any
                corporation or other entity acquiring any of the foregoing or
                involved in providing Internet Access services that compete
                directly with Prodigy; or

                        (ii) directly or indirectly recruit, solicit or induce,
                or attempt to induce, any employee or employees of the Company
                to terminate their employment with, or otherwise cease their
                relationship with the Company; or

                        (iii) directly or indirectly solicit, divert or take
                away, or attempt to divert or to take away, the business or
                patronage of any of the clients, customers or accounts, or
                prospective clients, customers or accounts, of the Company,
                including but not limited to those clients, customers or
                accounts which were contacted, solicited or served by the
                Executive while employed by the Company.

                (b)     If any restriction set forth in this Section 6 is found
        by any court of competent jurisdiction to be unenforceable because it
        extends for too long a period of time or over too great a range of
        activities or in too broad a geographic area, it shall be interpreted to
        extend only over the maximum period of time, range of activities or
        geographic area as to which it may be enforceable.

                (c)     The restrictions contained in this Section 6 are
        necessary for the protection of the business and goodwill of the Company
        and are considered by the Executive to be reasonable for such purposes.
        The Executive agrees that any breach of this Section 6 will cause the
        Company substantial and irrevocable damage and therefore, in the event
        of any such breach, in addition to such other remedies which may be
        available, the Company shall have the right to seek specific performance
        and injunctive relief.

                (d)     Unless the context otherwise requires, all references in
        this Section 6 and in Section 7 below to the "Company" shall include all
        current or future subsidiaries or affiliates of the Company.

7.       PROPRIETARY INFORMATION AND DEVELOPMENTS.

         7.1    PROPRIETARY INFORMATION.

                (a)     The Executive agrees that all information and know-how
        related to the activities of the Company, whether or not in writing, of
        a private, secret or confidential nature concerning the Company's,
        business or financial affairs (collectively, "Proprietary Information")
        is and shall be the exclusive property of the Company. By way of
        illustration, but not limitation, Proprietary Information may include
        inventions, products, processes, methods, techniques, formulas,
        compositions, compounds, projects, developments, plans, research data,
        clinical data, financial data, personnel data, computer


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        programs, and customer and supplier lists. The Executive will not
        disclose any Proprietary Information to others outside the Company or
        use the same for any unauthorized purposes without written approval by
        an officer of the Company, either during or after her employment,
        unless and until such Proprietary Information has become public
        knowledge without fault by the Executive.

                (b)     The Executive agrees that all files, letters, memoranda,
        reports, records, data, sketches, drawings, laboratory notebooks,
        program listings, or other written, photographic, or other tangible
        material containing Proprietary Information, whether created by the
        Executive or others, which shall come into her custody or possession,
        shall be and are the exclusive property of the Company to be used by the
        Executive only in the performance of her duties for the Company.

                (c)     The Executive agrees that her obligation not to disclose
        or use information, know-how and records of the types set forth in
        paragraphs (a) and (b) above also extends to such types of information,
        know-how, records and tangible property of customers of the Company or
        suppliers to the Company or other third parties who may have disclosed
        or entrusted the same to the Company or to the Executive in the course
        of the Company's business.

        7.2     DEVELOPMENTS.

                (a)     The Executive will make full and prompt disclosure to
        the Company of all inventions, improvements, discoveries, methods,
        developments, software, and works of authorship related to the
        activities of the Company, whether patentable or not, which are created,
        made, conceived or reduced to practice by the Executive or under her
        direction or jointly with others during her employment by the company,
        whether or not during normal working hours or on the premises of the
        Company (all of which are collectively referred to in this Agreement as
        "Development").

                (b)     The Executive agrees to assign and does hereby assign to
        the Company (or any person or entity designated by the Company) all her
        right, title and interest in and to all Developments and all related
        patents, patent applications, copyrights and copyright applications. The
        Executive also acknowledges that all work fixed in a tangible medium of
        expression shall be deemed a work made for hire under the U.S. Copyright
        Act such that the work is owned by the Company at the moment of
        creation.

                (c)     The Executive agrees to cooperate fully with the
        Company, both during and after her employment with the Company, with
        respect to the procurement, maintenance and enforcement of copyrights
        and patents (both in the United States and foreign countries) relating
        to Developments. The Executive shall sign all papers, including, without
        limitation, copyright applications, patent applications, declarations,
        oaths, formal assignments, assignment of priority rights, and powers of
        attorney, which the Company may deem necessary or desirable in order to
        protect its rights and interest in any Development.


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        7.3     OTHER AGREEMENTS. The Executive hereby represents that her
        performance of all the terms of this Agreement and as an employee of the
        Company does not and will not breach the terms of any agreement with any
        previous employer or other party to refrain from using or disclosing any
        trade secret, confidential or proprietary information, knowledge or data
        acquired by her in confidence or in trust prior to her employment with
        the Company or to refrain from competing, directly or indirectly, with
        the business of such previous employer or any other party.

8.      NOTICES.

        All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon personal delivery or upon sending, by
registered or certified mail, postage prepaid, addressed to the other party at
the address shown above, or at such other address or addresses as either party
shall designate to the other in accordance with this Section 8.

9.      PRONOUNS.

        Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular forms of nouns and pronouns shall include the plural, and vice versa.

10.     ENTIRE AGREEMENT.

        This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether written or oral,
relating to the subject matter of this Agreement including, without limitation,
the Executive's prior Employment Agreement with the Company dated September 14,
1998, except that the Agreement Regarding Confidential Information and the
Prodigy Business Conduct Guidelines shall remain in full force and effect.

11.     AMENDMENT.

        This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Executive.

12.     GOVERNING LAW.

        This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of New York in the United States, without
reference to conflict of law principles.

13.      SUCCESSORS AND ASSIGNS.

        This Agreement shall be binding upon and inure to the benefit of both
parties and their respective successors and assigns, including any corporation
with which or into which the Company may be merged or which may succeed to its
assets or business; PROVIDED, HOWEVER, that the obligations of the Executive are
personal and shall not be assigned by her.

14.     MISCELLANEOUS.


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        14.1    No delay or omission by either the Company or the Executive in
        exercising any right under this Agreement shall operate as a waiver of
        that or any other right. A waiver or consent given by either the Company
        or the Executive on any one occasion shall be effective only in that
        instance and shall not be construed as a bar or waiver of any right on
        any other occasion.

        14.2    The captions of the sections of this Agreement are for
        convenience of reference only and in no way define, limit or affect the
        scope or substances of any section of this Agreement.

        14.3    In case any provision of this Agreement shall be invalid,
        illegal or otherwise unenforceable, the validity, legality and
        enforceability of the remaining provisions shall in no way be affected
        or impaired thereby.

        14.4    Any payments to the Executive pursuant to the terms of this
        Agreement shall be reduced by such amounts as are required to be
        withheld with respect thereto under all present and future federal,
        state and local tax laws and regulations, and other laws and
        regulations.

        IN WITNESS THEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.

                                            PRODIGY COMMUNICATIONS CORPORATION


                                            By:  /s/    Illegible
                                               ---------------------------------

                                            Title:
                                                  ------------------------------


                                            EXECUTIVE


                                                 /s/ Andrea S. Hirsch
                                            ------------------------------------









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--       Retention Award

--       Vacation Payout

--       Pay thru 12-31

--       Cobra for 1 year - Will stop if gets employment

--       Bonus at 100%

--       Keep lap top





















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