EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of November 6, 2000 (hereinafter
"Agreement"), by and between PSINet Inc. (hereinafter "the Company"), a New York
corporation with its principal place of business located at 00000 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000 and Xxxxxxxx X. Xxxxx (hereinafter "the Executive").
WHEREAS, the Company has determined that it is in the best interests of
the Company to delegate certain management responsibilities of the Company to
the Executive;
WHEREAS, the Executive is willing to provide his services as an employee
of the Company for the inducements and on the terms and conditions set forth
below in this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT POSITION.
(a) POSITION AND DUTIES. The Company hereby employs the Executive to
serve as Executive Vice President and Chief Financial Officer of the
Company, and the Executive hereby accepts such employment in the
capacity and subject to the terms and conditions hereinafter set forth.
This position is a corporate officer position and, as an officer of the
Company, the Executive must stand for election by the Company's Board
of Directors (the "Board") each year of the Term (as defined in Section
2 hereof). The Executive shall have such powers, duties, authority, and
responsibilities as are (i) consistent with such position, (ii)
assigned to such offices in the Company's By-laws, and (iii) reasonably
assigned to the Executive by the Chairman and Chief Executive Officer
of the Company. The Executive accepts such employment and agrees to
remain in the employ of the Company and provide management services to
the Company, as determined by and under the direction of the Chairman
and Chief Executive Officer.
(b) LOCATION OF EMPLOYMENT. The principal place of employment of the
Executive shall be in the greater Washington, D.C. area. The Executive
shall be available to travel to the extent reasonably required to carry
out the duties and responsibilities as Executive Vice President and
Chief Financial Officer or as otherwise may be reasonably required by
the business of the Company.
(c) MANAGEMENT RESPONSIBILITIES. The Executive shall at all times
perform his responsibilities and duties with appropriate care and
consistent with his position as may be assigned by the Chairman and
Chief Executive Officer of the Company and shall at all times
exercise reasonable judgment and discretion in the performance of
such responsibilities and duties.
2. TERM OF EMPLOYMENT. The initial term of the Executive's employment
under this Agreement shall commence as of the date of this Agreement and shall
terminate on the third anniversary hereof (the "Initial Term") subject to
earlier termination as provided in Section 6.
After the Initial Term, this Agreement shall be automatically extended each year
for an additional one (1) year period (each, a "Renewal Term"). The Initial Term
together with any Renewal Term are referred to herein collectively as the
"Term."
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay the Executive a base salary
at a rate of $350,000.00 per year beginning on the date hereof.
Beginning on January 1, 2001 and January 1 of each subsequent year
thereafter, the Executive's base salary shall be increased at a
minimum by an amount equal to five percent (5%) of the Executive's
then current base salary. The Executive's base salary shall be
subject to additional increases at the discretion of the Chairman
and Chief Executive Officer of the Company subject to the approval
of the Compensation Committee of the Board (the "Compensation
Committee"). The Executive's base salary shall be payable in such
installments as the Company regularly pays its other salaried
employees. All payments shall be subject to the deduction of payroll
withholdings taxes and similar assessments as required by law or by
further agreement with the Executive.
(b) PERFORMANCE BONUS. The Company will pay the Executive a bonus
subject to the successful completion of the objectives established
for the Executive's performance for each calendar year during the
Term. The performance criteria will be issued separately by the
Chairman and Chief Executive Officer of the Company with respect to
each calendar year during the Term, and may be changed, with mutual
fairness, from time to time as situations develop. The target bonus
for the one-year period ending December 31, 2000 will be a total of
up to $150,000.00. Separate criteria will be established for the
Executive's entitlement for the year starting January 1, 2001.
Bonuses in subsequent years during the Term will be at least equal
to the amount of the bonus during the previous calendar year.
(c) STOCK OPTIONS. On the first anniversary of the date of this
Agreement and each subsequent anniversary date during the Term, the
Company shall grant the Executive options to purchase 15,000 shares
of the Company's common stock (the "Options") pursuant to the
Company's Executive Stock Incentive Plan (the "Plan") or another
option plan of the Company, such grant being subject to the terms of
this Agreement and the Executive's continued employment at the time
of the grant and evidenced by an option agreement in such form and
under the terms and conditions set forth in the applicable plan.
(d) VESTING OF STOCK OPTIONS. In the event of (i) a Change in
Control (as defined in Section 3(e) hereof); (ii) the termination of
the Executive's employment by the Company for any reason other than
for Cause (as defined in Section 6(c) hereof); or (iii) the
termination of the Executive by the Company because of the
Executive's death or disability, the Company shall immediately vest
all of the unvested stock options the Executive has received prior
to the date of the Change in Control or Date of Termination (as
defined in Section 6(j) hereof), as applicable.
(e) CHANGE IN CONTROL. As used in this Agreement, "Change in
Control" shall mean: (i) the shareholders of the Company approve an
agreement for the
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sale of all or substantially all of the assets of the Company; or
(ii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation (and the
Company implements it), other than (A) a merger or consolidation
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent more
than eighty percent (80%) of the combined voting power of the voting
securities of the Company, or such surviving entity, outstanding
immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no "person" (as defined
below) acquires more than thirty percent (30%) of the combined
voting power of the Company's then-outstanding securities; or (iii)
any "person," as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than (1) the Company or (2) any corporation owned, directly
or indirectly, by the Company or the shareholders of the Company in
substantially the same proportions as their ownership of stock in
the Company), is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing thirty percent (30%) or more
of the combined voting power of the Company's then outstanding
securities.
4. FRINGE BENEFITS; AUTOMOBILE ALLOWANCE.
(a) During the Term, the Executive shall be entitled to the maximum
benefits that are generally provided to all senior executives of the
Company under any life insurance, group insurance, medical,
retirement, pension or other employee benefit or incentive plans or
pursuant to other arrangements or understandings (excluding any
equity, equity option or equity bonus plans), so long as any such
plan, benefit, arrangement or understanding remains generally
available to all other senior executive officers of the Company.
(b) During the Term, the Executive shall also receive an automobile
allowance of $800 per month or whatever greater amount the Company
pays to its Executives as a matter of standard practice from time to
time.
(c) During the Term, the Executive shall be entitled to financial
and tax advice at the Company's expense through the Xxxxx Companies
up to a maximum amount of $7,000.00 per year.
(d) During the Term, the Executive shall be entitled to four (4)
weeks paid vacation each year which can accumulate to a maximum of
six (6) weeks.
5. EXPENSE REIMBURSEMENT. In addition to the compensation and benefits
provided in Sections 3 and 4, the Company shall, upon receipt of appropriate
documentation, reimburse the Executive for his reasonable travel, lodging,
entertainment, and other ordinary and necessary business expenses incurred in
the course of his duties on behalf of the Company during the Term.
6. TERMINATION. The Term is subject to early termination as provided
below:
(a) TERMINATION BY THE COMPANY BECAUSE OF THE EXECUTIVE'S DISABILITY.
If at any time during the Term, the Company determines in good faith
that the Executive has been unable, as a result of physical or
mental illness or incapacity,
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to perform his duties hereunder for a period of either (i) one
hundred eighty (180) consecutive days during any twelve-month period
or (ii) ninety (90) consecutive days during any twelve-month period
if the Executive's physical or mental illness or incapacity would
reasonably be expected to continue for another consecutive ninety
(90) day period after such initial ninety (90) day period, the Term
may be terminated by the Company upon thirty (30) days' written
notice to the Executive. Should the Executive be terminated pursuant
to this Section 6(a), he shall be entitled to Termination Payments
as provided for in Section 6(g).
(b) TERMINATION BY THE COMPANY BECAUSE OF THE EXECUTIVE'S DEATH. In the
event that the Executive's death occurs prior to the expiration of the
Term, the Term shall terminate as of the date of the Executive's death.
Should the Executive be terminated pursuant to this Section 6(b), he
shall be entitled to Termination Payments as provided for in Section
6(g).
(c) TERMINATION BY THE COMPANY FOR CAUSE. The Executive's employment
may be terminated by the Company at any time for "Cause." In the event
of a termination for Cause, all salary and benefits otherwise payable
to the Executive shall cease immediately upon such termination. For
purposes of this Agreement, the Company shall have Cause for
termination of the Executive's employment under this Agreement by
reason of (i) any breach by the Executive of his agreement not to
compete or solicit pursuant to Section 7 hereof; (ii) any violation of
Company policy which materially and adversely affects the business or
reputation of the Company; (iii) any act or omission by the Executive
constituting willful misconduct or gross negligence, (iv) the
Executive's conviction of a felony (or a plea of guilty or NOLO
CONTENDRE thereto); (v) the Executive's conviction of any other
criminal action (or a plea of guilty or NOLO CONTENDRE thereto) that
has or might reasonably be expected to have an adverse effect on the
business or reputation of the Company or its subsidiaries; (vi) the
Executive's commission of an act of fraud; (vii) a material breach by
the Executive of any provision of this Agreement which breach and the
effects thereof remain uncured for a period of thirty (30) days after
written notice, specifically identifying the breach, is given to the
Executive by the Company (however, it being expressly understood that
the Company need not provide any notice and may terminate the Executive
immediately where the Company in good faith believes that the
Executive's material breach is not curable within thirty (30) days); or
(viii) the Executive's voluntary resignation without Good Reason and
without having given the Company at least thirty (30) days prior
written notice.
(d) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate
the employment of the Executive under this Agreement at any time
without cause with thirty (30) days' prior written notice. Should the
Executive be terminated pursuant to this Section 6(d), he shall be
entitled to Termination Payments as provided for in Section 6(g).
(e) TERMINATION BY THE EXECUTIVE WITHOUT GOOD REASON. The Executive may
terminate his employment at any time without Good Reason (as that term
is defined in Section 6(f)), provided that the Executive shall have
given the Company at least thirty (30) days prior written notice of
such termination. In the event of termination by the Executive without
Good Reason, the Executive's
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salary and benefits shall continue during the notice period specified
by the Executive and shall cease thereafter.
(f) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive may
terminate his employment at any time for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean any of the following
occurrences but only if occurring within twelve (12) months after a
Change in Control:
(i) the diminution or change, without the Executive's
written consent, of his position, title, authority,
duties or responsibilities as indicated in Section
1(a) hereof;
(ii) the Company requiring the Executive, without his
written consent, to be based at any office or
location or to relocate to any location other than
the Company's headquarters which shall be located in
the Washington, D.C. area;
(iii) any material breach by the Company of this Agreement
which is not cured within thirty (30) days after
notice is given to the Company in accordance with
this Agreement.
(g) TERMINATION PAYMENTS. A. If the Executive's employment is
terminated by the Company (1) without Cause pursuant to
Section 6(d) or (2) because of the Executive's death or
disability pursuant to Section 6(a) or (b) (each of the
circumstances in Section 6(g)(A)(1) and (2) being known as a
"Termination Event"), the Company shall provide the Executive
(or, in the case of his death, his estate, heirs or legal
representatives) the following (collectively, the "Termination
Payments"), to be paid or given within thirty (30) days of the
Date of Termination (except with respect to item (iii) below
which will be granted and given in accordance with Section
3(d) herein):
(i) a lump sum representing (1) the Executive's monthly base
salary as derived from the Executive's annual salary and
giving effect to all annual increases thereto as provided in
Section 3(a) herein, times the greater of (y) the number of
months remaining in the current Term and (z) twenty-four (24)
months; and (2) all other accrued and unpaid amounts due to
the Executive as of the Date of Termination (including,
without limitation, accrued vacation pay and reimbursement of
business expenses);
(ii) a lump sum representing all annual bonus amounts, as
provided for in Section 3(b) hereof, calculated on the
assumption that all performance criteria objectives would have
been exceeded, such that the Executive would receive the
maximum bonus established by the Chairman and Chief Executive
Officer of the Company to which the Executive would have been
entitled had he remained employed by the Company for the
longer of (y) the remainder of the current Term or (z)
twenty-four (24) months after the Date of Termination; and
(iii) the vested options provided in Section 3(d).
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Moreover, should the Company terminate the Executive without
Cause pursuant to Section 6(d) herein, the Executive shall be entitled
to the immediate vesting of such number of options as are equal to the
number which would have vested, ratably, monthly, had the Executive
remained employed for the longer of the remainder of the current Term
or twenty-four (24) months after the Date of Termination.
B. If the Executive terminates his employment for Good Reason
as defined in Section 6(f) or a Termination Event occurs within twelve
months after a Change in Control, the Executive is entitled to the
Termination Payments as stated in Section 6(g)(A)(i) (ii) and (iii)
above as well as the following:
(iv) continuation of all life insurance and health benefits,
disability insurance and benefits and reimbursement
theretofore being provided to the Executive and/or his family,
or such other more favorable benefits applicable to any senior
executive officer of the Company, to which the Executive would
have been entitled had he remained employed by the Company for
the longer of (y) the remainder of the current Term or (z)
twenty-four (24) months after the Date of Termination, with
the exception of the car allowance as provided in Section 4(b)
herein;
(v) Company contributions, to the extent permitted by
applicable law, to a SEP-XXX, Xxxxx or other retirement
mechanism reasonably selected by the Executive sufficient to
provide the same level of retirement benefits the Executive
would have received if he had remained employed by the Company
for the longer of (y) the remainder of the current Term or (z)
twenty-four (24) months after the Date of Termination
provided, however, that the Company shall make up the
difference in cash payments directly to the Executive to the
extent that applicable law would not permit it to make such
contributions;
C. In consideration of the Termination Payments provided in
this Section 6(g)(A) and (B), the Executive agrees to execute a
termination of employment agreement under which the Executive agrees to
fully release all claims against the Company.
(h) TAX PROVISIONS. In the event that any payments under this Agreement
or any other compensation, benefit or other amount from the Company for
the benefit of the Executive are subject to the tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code")
(including any applicable interest and penalties, the "Excise Tax"), no
such payment ("Parachute Payment") shall be reduced (except for
required tax withholdings) and the Company shall pay to the Executive
by the earlier of the date such Excise Tax is withheld from payments
made to the Executive or the date such Excise Tax becomes due and
payable by the Executive, an additional amount (the "Gross-Up Payment")
such that the net amount retained by the Executive (after deduction of
any Excise Tax on the Parachute Payments, taxes based upon the Tax Rate
(as defined below) upon the payment provided for by this Section 6(h)
and Excise Tax upon the payment provided for by this Section 6(h)),
shall be equal to the amount the Executive would have received if no
Excise Tax had been imposed.
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A Tax counsel chosen by the Company's independent auditors, provided
such person is reasonably acceptable to the Executive ("Tax Counsel"),
shall determine in good faith whether any of the Parachute Payments are
subject to the Excise Tax and the amount of any Excise Tax, and Tax
Counsel shall promptly notify the Executive of its determination. The
Company and the Executive shall file all tax returns and reports
regarding such Parachute Payments in a manner consistent with the
Company's reasonable good faith determination. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be
deemed to pay taxes at the Tax Rate applicable at the time of the
Gross-Up Payment. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at
the time a Parachute Payment is made, the Executive shall repay to the
Company promptly following the date that the amount of such reduction
in Excise Tax is finally determined the portion of the Gross-Up Payment
attributable to such reduction (without interest). In the event that
the Excise Tax is determined to exceed the amount taken into account
hereunder at the time a Parachute Payment is made (including by reason
of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall pay the Executive
an additional amount with respect to the Gross-Up Payment in respect of
such excess (plus any interest or penalties payable in respect of such
excess) at the time that the amount of such excess is finally
determined. The Company shall reimburse the Executive for all
reasonable fees, expenses, and costs related to determining the
reasonableness of any Company position in connection with this
paragraph and preparation of any tax return or other filing that is
affected by any matter addressed in this paragraph, and any audit,
litigation or other proceeding that is affected by any matter addressed
in this Section 6(h) and an amount equal to the tax on such amounts at
the Executive's Tax Rate. For the purposes of the foregoing, "Tax Rate"
means the Executive's effective tax rate based upon the combined
federal and state and local income, earnings, Medicare and any other
tax rates applicable to the Executive, all at the highest marginal rate
of taxation in the country and state of the Executive's residence on
the date of determination, net of the reduction in federal income taxes
which could be obtained by deduction of such state and local taxes.
(i) NOTICE OF TERMINATION. Any termination of the Executive's
employment during the Term by the Company or by the Executive shall be
communicated by Notice of Termination to the other party hereto given
in accordance with Section 16 of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so indicated, and
(iii) if applicable, specifies a termination date. The failure by the
Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company, as applicable, from
asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
(j) DATE OF TERMINATION. For purposes of this Agreement, "Date of
Termination" means (i) if the Executive's employment is terminated by
reason of
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death, the date of death; or (ii) if the Executive's employment is
terminated under any other circumstances, the date of receipt of the
Notice of Termination by the party being so notified or any later date
specified therein. For purposes of this Agreement, the Executive will
be deemed to be employed through the end of the calendar day on the
Date of Termination.
7. COVENANTS OF EXECUTIVE
(a) COVENANT NOT TO COMPETE. In consideration of the Executive's
employment pursuant to this Agreement and for other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the Executive agrees that, so long as the Executive is
employed by the Company under this Agreement and for a period of twelve
(12) months following the termination of such employment (but only if
the Company has elected to enforce the restriction), the Executive
shall not, without the prior written consent of the Company, either for
the Executive or for any other person, firm or corporation, own,
manage, operate, control, be employed by, participate in or be
associated in any manner with the ownership, management, operation or
control of any business providing Internet-related, E-commerce,
web-hosting, network or communication services competitive with the
Company as of the Date of Termination or within six (6) months
thereafter. The foregoing shall in no event restrict the Executive
from: (i) writing or teaching, whether on behalf of for-profit, or
not-for-profit institution(s); (ii) investing (without participating in
management or operation) in the securities of any private or publicly
traded corporation or entity; or (iii) after termination of employment,
becoming employed by a hardware, software or other vendor to the
Company, provided that such vendor does not offer Internet-related,
E-commerce, web-hosting, network or communication services that are
competitive with the services offered by the Company as of the Date of
Termination or within six (6) months thereafter.
(b) NONSOLICITATION. In consideration of the Executive's employment
pursuant to this Agreement and for other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the Executive agrees that, so long as the Executive is
employed by the Company under this Agreement and for a period of
eighteen (18) months following the termination of such employment, the
Executive agrees not to hire, solicit, nor attempt to solicit for
himself or any third party, the services of any employee or
subcontractor of the Company or any of the Company's subsidiaries or
affiliates without the Company's prior written consent; provided,
however, that the Executive is not prevented from employing such person
who contacts the Executive on his or her own initiative and without any
direct or indirect solicitation by the Executive.
(c) BREACH/THREATENED BREACH. The Executive may request permission from
the Company's Board of Director's to engage in activities which would
otherwise be prohibited by Section 7(a) or (b). The Company shall
respond to such request within thirty (30) days after receipt. The
Company shall notify the Executive in writing if it becomes aware of
any breach or threatened breach of any of the provisions in Section
7(a) or (b), and the Executive shall have thirty (30) days after
receipt of such notice in which to cure or prevent the breach, to the
extent that the Executive is able to do so. The Executive and the
Company acknowledge that any breach or threatened breach by the
Executive of any of the
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provisions in Section 7(a) or (b) above cannot be remedied by the
recovery of damages, and agree that in the event of any such breach or
threatened breach which is not cured with such 30-day period, the
Company may pursue injunctive relief for any such breach or threatened
breach. If a court of competent jurisdiction determines that the
Executive breached any of such provisions, the Executive shall not be
entitled to any Termination Payments from and after date of the breach.
In such event, the Executive shall promptly repay any Termination
Payments previously made plus interest thereon from the date of such
payment(s) at 12% per annum. If, however, the Company has suspended
making such Termination Payments and a court of competent jurisdiction
finally determines that the Executive did not breach such provision or
determines such provision to be unenforceable as applied to the
Executive's conduct, the Executive shall be entitled to receive any
suspended Termination Payment, plus interest thereon from the date when
due at 12% per annum. The Company may elect (once) to continue paying
the Termination Payments before a final decision has been made by the
court.
(d) OWNERSHIP OF WORK PRODUCT. All copyrights, patents, trade secrets,
or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship
developed or created by the Executive during the course of performing
the Company's work (collectively the "Work Product") shall belong
exclusively to the Company and shall, to the extent possible, be
considered a work made for hire for the Company within the meaning of
Title 17 of the United States Code. The Executive automatically
assigns, and shall assign at the time of creation of the Work Product,
without any requirement of further consideration, any right, title, or
interest the Executive may have in such Work Product, including any
copyrights or other intellectual property rights pertaining thereto.
Upon request of the Company, the Executive shall take such further
actions, including execution and delivery of instruments of conveyance,
as may be appropriate to give full and proper effect to such
assignment.
(e) EQUITABLE RELIEF. The Executive acknowledges and agrees that the
covenants and obligations of Executive contained in Section 7 hereof
relate to special, unique and extraordinary matters and are reasonable
and necessary to protect the legitimate interests of the Company and
that a breach of any of the terms of such covenants and obligations
will cause the Company irreparable harm and injury for which adequate
remedies at law are not available. The Executive therefore agrees that
the Company need not prove actual damages in order to obtain injunctive
relief, a restraining order, an order of specific performance or any
other equitable relief (together, "Equitable Relief") with respect to
any of Executive's obligations under Section 7. The Executive hereby
waives any claim or defense therein that the Company has an adequate
remedy at law or that money damages would provide an adequate remedy.
It shall, however, be the option of the Company whether or not to seek
Equitable Relief.
8. REPRESENTATION AND WARRANTIES.
(a) THE COMPANY. The Company hereby represents and warrants to the
Executive as follows:
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(i) the Company is duly organized, validly existing and
in good standing under the laws of the State of New
York;
(ii) this Agreement has been duly authorized, executed and
delivered by the Company and will constitute the
legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws
affecting the rights of creditors generally and to
general principles of equity whether considered in a
suit at law or in equity; and
(iii) the execution and delivery of this Agreement by the
Company, the performance by the Company of its
obligations hereunder and the consummation by the
Company of the transactions contemplated hereby will
not violate any agreement to which the Company is a
party.
(b) EXECUTIVE. The Executive hereby represents and warrants to the
Company as follows:
(i) this Agreement has been duly executed and delivered
by the Executive and will constitute the legal, valid
and binding obligation of the Executive, enforceable
against the Executive in accordance with its terms,
subject to applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the rights
of creditors generally and to general principles of
equity whether considered in a suit at law or in
equity;
(ii) the execution and delivery of this Agreement by
Executive, the performance by the Executive of his
obligations hereunder and the consummation by the
Executive of the transactions contemplated hereby
will not violate any agreement to which he is a
party; and
(iii) the Executive has made such investigations of the
business and properties of the Company as he deems
necessary or appropriate before entering into this
Agreement.
9. TRANSFERABILITY.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company, its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, share exchange or
otherwise) to all or
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substantially all of the business and/or assets of the Company to
expressly assume in writing and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required
to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as defined herein and any
successor to its businesses and/or assets as aforesaid that assumes and
agrees to perform this Agreement by operation of law, or otherwise. A
failure of the Company to cause a successor to assume this Agreement in
any such transaction shall be a breach of this Agreement by the
Company.
10. NONEXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
plan, program, policy or practice provided by the Company and for which the
Executive may qualify (except with respect to any benefit to which the Executive
has waived his rights in writing), nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any other contract or
agreement entered into after the date of this Agreement with the Company.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any benefit, plan, policy, practice or program of, or any
contract or agreement entered into with, the Company shall be payable in
accordance with such benefit, plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
11. FULL SETTLEMENT; MITIGATION, COSTS AFTER A CHANGE IN CONTROL. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts (including amounts for damages
for breach) payable to the Executive under any of the provisions of this
Agreement, and such amounts shall not be reduced whether or not the Executive
obtains other employment. In addition, following a Change in Control only, the
Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others. Notwithstanding any other
provisions in this Agreement to the contrary, in the event that, following a
Change in Control, any successor in interest to the Company unsuccessfully
contests and/or challenges any of the Executive's rights under this Agreement,
then the successor in interest to the Company shall pay the Executive's
reasonable attorney's fees and costs incurred in such contest or challenge.
12. NO WAIVER. The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder shall not be deemed to
be a waiver of such provision or right or any other provision or right of this
Agreement.
13. ARBITRATION. With the exception of disputes arising under Section 7
hereof, any dispute arising under this Agreement shall be settled by arbitration
in accordance with the rules of the American Arbitration Association and
judgment upon the award rendered by the arbitrator may be rendered in any court
having jurisdiction thereof. Arbitration hereunder shall be by a single
arbitrator appointed by agreement of the parties. The parties shall agree that
any arbitration award shall be final and binding on the parties. Except as
stated otherwise in Paragraph 11 of this Agreement, each party shall bear its
own costs and attorneys' fees associated with the arbitration.
14. SEVERABILITY. The provisions of this Agreement will be deemed
severable, and if any part of any provision is held to be illegal, void,
voidable, invalid, nonbinding, or
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unenforceable in its entirety or partially or as to any party, for any reason,
such provision may be changed, consistent with the intent of the parties hereto,
to the extent reasonably necessary to make the provision, as so changed, legal,
valid, binding, and enforceable. If any provision of this Agreement is held to
be illegal, void, voidable, invalid, nonbinding, or unenforceable in its
entirety or partially or as to any party, for any reason, and if such provision
cannot be changed consistent with the intent of the parties hereto to make it
fully legal, valid, binding, and enforceable, then such provision will be
stricken from this Agreement, and the remaining provisions of this Agreement
will not in any way be affected or impaired, but will remain in full force and
effect.
15. ENTIRE AGREEMENT/AMENDMENTS. This Agreement contains and its terms
constitute the entire agreement of the parties and supersedes all prior
agreements regarding the subject matter herein. This Agreement supersedes and
replaces any prior or contemporaneous agreements, negotiations, correspondence,
undertakings and communications of the parties, oral or written regarding the
subject matter herein. No amendment or modification of any provision of this
Agreement shall be effective unless in writing and signed by the party against
whom enforcement of such amendment or modification is sought.
16. NOTICES. All notices required to be given or which may be given
under this Agreement shall be in writing, delivered in accordance with one or
more of the following and deemed received upon the earlier of (i) when it is
personally delivered to the party, (ii) three (3) days after having been mailed
by certified mail, postage prepaid, return receipt requested, (iii) two (2) days
after having been sent via overnight delivery by a recognized overnight delivery
service or (iv) one (1) day after having been sent via facsimile transmission,
in each case addressed to the party intended to be notified at the address of
such party as set forth in the records of the Company or such other address as
such party may designate in writing to the other.
17. GOVERNING LAW. This Agreement shall be governed by the laws of the
Commonwealth of Virginia without giving effect to the conflicts of law
principles thereof.
18. SURVIVAL. All provisions which may reasonably be interpreted or
construed to survive the expiration or termination of this Agreement shall
survive the expiration or termination of this Agreement.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
be one and the same instrument.
20. EXECUTION. This Agreement shall be deemed effective upon the
execution by the Company and the Executive.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as the date first written above.
Executive:
/s/ XXXXXXXX X. XXXXX
-------------------------
Xxxxxxxx X. Xxxxx
PSINet Inc. ("Company"):
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------------
Title: Chairman and Chief Executive Officer
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