EXHIBIT 10.4
AMENDED AND RESTATED RETENTION AGREEMENT
This Amended and Restated Retention Agreement ("Retention Agreement")
is effective as of July 21, 2001 by and between Allied Riser Operations
Corporation, (the "Company"), a Delaware corporation with its principal place of
business at 0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxx 00000, and Xxxxx X. Xxxxxxx, an
individual residing in Tarrant County, Texas ("Executive"). Terms not otherwise
defined herein shall have the meaning ascribed in the Employment Agreement.
RECITALS:
A. Executive and the Company are parties to that certain Employment
Agreement dated as of November 1, 2000;
B. Effective May 24, 2001, as in inducement to Executive's continued
employment with the Company, Executive and the Company entered into an agreement
to amend the Employment Agreement ("May Retention Agreement"), pursuant to which
the Company agreed to make certain payments to Executive on each of July 21,
2001 and September 21, 2001 if Executive remained an employee of the Company on
such dates;
C. Effective July 21, 2001, as a further inducement to Executive's
continued employment with the Company, Executive and the Company entered into a
further amendment of the Employment Agreement and the May Retention Agreement
("Amended Retention Agreement"); and
D. The parties desire to further amend the terms of the Employment
Agreement, the May Retention Agreement, and the Amended Retention Agreement and
enter into this Amended and Restated Retention Agreement to reflect their
understanding and agreement.
NOW THEREFORE, in consideration of the promises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto acknowledge
and agree as follows:
1. Retention Compensation. In lieu of (x) the retention and bonus payments
and severance identified in the May Retention Agreement and the Amended
Retention Agreement, (y) the severance identified in the Employment
Agreement, and (z) the Company's previously announced performance bonus
plan for 2001, the Company will pay Executive the following amounts
("Retention Compensation"):
(a) an amount equal to 75% of Executive's annual base salary as of
July 21, 2001, payable in 12 equal installments on each
regularly scheduled payroll date between July 21, 2001 and
December 31, 2001; and
(b) an amount equal to 75% of Executive's annual base salary as of
July 21, 2001, payable in seven equal installments on each
regularly scheduled payroll date between October 5, 2001 and
December 31, 2001.
2. Performance Incentive Bonus. In addition to any other compensation
provided for herein and in the Employment Agreement, and based upon
achievement of milestone objectives established by the Board of
Directors of the Company, the Company shall pay Executive $187,800, in
seven equal installments (the "Performance Incentive Bonus") on each
regularly scheduled payroll date between October 5, 2001 and December
31, 2001.
3. Terms and Conditions of Payment. The Company shall pay Executive the
Retention Compensation and the Performance Incentive Bonus in
accordance with the following terms and conditions:
a. Each installment of Retention Compensation and Performance
Incentive Bonus will be made on regularly scheduled paydays
and will be subject to applicable withholdings.
b. Each installment of Retention Compensation and Performance
Incentive Bonus will be paid only if Executive is not, on such
payday, subject to a performance improvement plan or
disciplinary action.
c. Executive will forfeit all unpaid installments of Retention
Compensation and Performance Incentive Bonus if Executive
voluntarily terminates her employment prior to a payday, or if
Executive is involuntarily terminated for cause (as defined in
the Employment Agreement).
d. If Executive is terminated for any reason other than cause on
or before December 31, 2001, Executive will receive a final,
adjusted installment of Retention Compensation and Performance
Incentive Bonus no later than on the next payroll date
following Executive's termination, in an amount equal to the
greater of the following (less applicable withholdings):
(i) The sum of the Retention Compensation and the
Performance Incentive Bonus, less any installments of
Retention Compensation and Performance Incentive
Bonus previously paid to Executive; or
(ii) The amount of severance provided in the Employment
Agreement, less any installments of Retention
Compensation and Performance Incentive Bonus
previously paid to Executive.
4. Performance Pool Bonus. In addition to the Retention Compensation and
the Performance Incentive Bonus set forth above, Executive may be
eligible to receive additional amounts based upon achievement of
milestone objectives established by the Board of Directors of the
Company to be allocated from the pool established on July 12, 2001 by
the Board of Directors (any such amounts, a "Performance Pool Bonus").
The amount of the Performance Pool Bonus will be determined by the CEO
of the Company, and Executive must be employed by the Company at the
time of such determination in order to receive a Performance Pool
Bonus.
5. Change of Control. In the event that an agreement is signed prior to
October 31, 2001 that results in a Change of Control, Executive may
receive, at the option of Executive,
either (i) the severance payment set forth in the Employment Agreement
or (ii) a Performance Pool Bonus in an amount determined by the CEO of
the Company, subject to, as of the effective date of the change of
Control, (x) relinquishment by Executive of all outstanding stock
options granted to Executive and (y) execution by Executive of a
release in form reasonably satisfactory to the Company. For purposes of
this Retention Agreement, a Change of Control shall mean any of the
following events: (i) a sale or transfer to an unaffiliated third party
of the power to elect a majority of the members of the Board of
Directors of the Company or its sole stockholder, Allied Riser
Communications Corporation ("ARCC"), (ii) a sale to an unaffiliated
third party of substantially all of the assets of the Company or ARCC,
(iii) a merger or other consolidation transaction with an unaffiliated
third party following which the ability to elect a majority of the
members of the Board of Directors of the Company or ARCC or a majority
of the voting power of the surviving corporation is not held by the
pre-transaction stockholder group.
6. No Repayment or Forfeiture. Upon payment of an installment of Retention
Compensation and Performance Incentive Bonus or payment of a
Performance Pool Bonus, no amount of Retention Compensation,
Performance Incentive Bonus, or Performance Pool Bonus so paid is
subject to repayment or forfeiture by Executive.
7. Survival of Employment Agreement. Unless expressly amended herein, all
provisions of the Employment Agreement remain in full force and effect.
The May Retention Agreement and the Amended Retention Agreement are
hereby terminated and replaced in their entirety by this Retention
Agreement and of no further force and effect. This Retention Agreement
is the sole agreement between the parties regarding its subject matter.
No prior agreement, statement or writing may be used to alter, amend or
add to the terms herein, except to the extent that the Employment
Agreement has been expressly incorporated herein by reference
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IN WITNESS WHEREOF, the parties hereto have executed this Retention
Agreement as of the date first written above.
ALLIED RISER OPERATIONS CORPORATION
By: /s/ XXXXXX X. XXXXXXXX
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Name: Xxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
/s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
