EXHIBIT 10.54
12 January, 1998
Xx. Xxxx X. Xxxxxx
0000 X. Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Xxxx:
This letter confirms our offer of your employment by PSINet Inc. (the
"Company"), and sets forth the terms and conditions which shall govern such
employment as outlined below. This offer is subject to satisfactory completion
of reference checks and ratification by the Company's Board of Directors, but
otherwise shall remain open until noon on January 15, 1998.
1. EMPLOYMENT:
A) The Company agrees to employ you as a Vice President, reporting initially
to the Senior Vice President and General Counsel of the Company. After
approximately six months, we anticipate that you will be assigned to the PSINet
Telecom group, and will report to this company's Executive Vice President and
Chief Operating Officer (or his designee). This is a corporate officer position
and as an officer of the Company you must stand for election by the Board of
Directors each year. You accept the employment and agree to begin work on or
about February 16, 1998, and remain in the employ of the Company, and, except
during vacation periods and sickness, to provide during standard business hours
a minimum of forty hours per week of management services to the Company, as
determined by and under the direction of the Senior Vice President and General
Counsel or the Executive Vice President and Chief Operating Officer.
B) During your employment you will, except during vacations, periods of
illness, and other absences beyond your reasonable control, devote your best
efforts, skill and attention to the performance of your duties on behalf of the
Company.
2. COMPENSATION:
A) BASE SALARY. The Company shall pay you a base salary at the rate of
$150,000 per annum. Beginning on January 2, 1999, your base salary shall be
increased at a minimum by an amount equal of 5% of your then current base
salary. Your base salary shall be guaranteed through 1998, and is subject to
annual or other increases at the discretion of the Company's Board of Directors.
Your base salary shall be payable in such installments as the Company regularly
pays its other salaried employees, subject to such deductions and withholdings
as may be required by law or by further agreement with you.
B) BONUS COMPENSATION. The Company will pay you a bonus upon the successful
completion of the objectives established for your performance for the applicable
year. The performance criteria will be issued separately by the Chairman of the
Company's Board or the Chief Operating Officer, at the beginning of each year,
with mutual fairness, from time to time as situations develop. The performance
bonus_ for the period ending December 31, 1998 will be a total of up to $50,000,
in two tiers, the first being up to $25,000, decided upon on June 30,1998, and
the second being up to $25,000 being decided upon by December 31, 1998.
Separate criteria will be established for your entitlement for each tier's bonus
money.
C) INCENTIVE STOCK OPTIONS. Effective upon your start date, PSINet Inc.
shall grant you options, subject to Board approval, to purchase forty-eight
thousand (48,000) shares of PSINet Inc.'s common stock (the "Options") pursuant
to its Executive Stock Incentive Plan (the "Plan"). Such Options shall be
evidenced by an option agreement in such form as required by the Plan. Among
other terms and provisions prescribed by the Plan, the option agreement shall
provide that (a) the exercise price of the Options shall be the price per share
of the Company's common stock as reported by the NASDAQ Stock Market at the
close of business on your start date, (b) the Options shall not be exercisable
after the expiration of ten years from the date such Options are granted, and
(c) the stock shall vest ratably, monthly, over forty-eight months, provided
that for each month's vesting purposes you continue to be employed full time by
the Company or one of its subsidiaries during such month.
3. EMPLOYEE BENEFITS. You shall be provided employee benefits, including
(without limitation) 401(k), revenue bonus plan participation, four weeks' paid
vacation, and life, health, accident and disability insurance under the
Company's plans, policies and programs available to employees in accordance with
the provisions of such plans, policies, and programs.
4. TERMINATION:
A) Your employment with the Company may be terminated by the Company at any
time for "Cause" as defined in Section 4(c) hereof. Upon such termination, the
Company will provide written notice whether it has elected to use the non-
competition restrictions set forth in Section 5(a) hereof. Your employment may
also be terminated by the Company at any time without Cause provided the
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Company shall have given you thirty (30) days' prior written notice of such
termination. That written notice must state whether the Company has elected to
use the non-Competition restriction (which decision may not be rescinded). If
you are terminated without cause during 1998, you will be paid severance pay,
plus pro-rate bonus and benefits for the remainder of the year. Thereafter, if
your employment is terminated without cause, you will be entitled to ninety (90)
days' salary, pro-rata bonus, and benefits. In addition, your employment may be
terminated by you at any time for any reason, provided you shall have given the
Company at least thirty (30) days' prior written notice of such termination. By
the 30th day the Company must notify you in writing whether it has elected to
use the non-Competition restriction. Such decision may not be rescinded. Failure
of the Company to so notify you shall result in the non-Competition restriction
not being in place.
B) Subject to your compliance with your obligations under Section 5 hereof, in
the event that your employment terminates or is terminated by you or the Company
for any reason other than for Cause, and the Company has elected to use the non-
Competition restriction, you shall be entitled, for a period of twenty-four (24)
months after termination of employment, to the following (collectively, the
"Termination Payments"): (i) your then current rate of base salary as provided
in Section 2; (ii) all life insurance and health benefits, disability insurance
and benefits and reimbursement theretofore being provided to you; and (iii)
Company contributions, to the extent permitted by applicable law, to a SEP-XXX,
Xxxxx or other retirement mechanism selected by you sufficient to provide the
same level of retirement benefits you would have received if you had remained
employed by the Company during such 24-month period. The Company shall make up
the difference in cash payments directly to you to the extent that applicable
law would not permit it to make such contributions.
C) The Company shall have "Cause" for termination of your employment by reason
of any breach of your agreement not to compete pursuant to Section 5 hereof,
your committing an act materially adversely affecting the Company which
constitutes wanton or willful misconduct, your conviction of a felony, or any
material breach by you of this Agreement.
5. AGREEMENT NOT TO COMPETE.
A) In consideration of your employment pursuant to this Agreement and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, you covenant to and agree with the Company that, so long as
you are employed by the Company under this Agreement and for a period of twenty-
four (24) months following the termination of such employment (but only if the
Company has elected to enforce the restriction), you shall not, without the
prior written consent of the Company, either for yourself
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or for any other person, firm or corporation, manage, operate, control,
participate in the management, operation or control of or be employed by any
other person or entity which is engaged in providing Internet-related network or
communications services competitive with the Internet-related network or
communication services offered to customers by the Company as of the date of
termination or within six (6) months thereafter. The foregoing shall in no event
restrict you 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 network or communication services that are
competitive with the Internet-related network or communications services offered
by the Company as of the date of termination of employment or within six (6)
months thereafter.
B) You may request permission from the Company's Board of Director's to engage
in activities which would otherwise be prohibited by Section 5(a). The Company
shall respond to such request within thirty (30) days after receipt. The
Company will notify you in writing if it becomes aware of any breach or
threatened breach of any of the provisions in Section 5(a), and you shall have
thirty (30) days after receipt of such notice in which to cure or prevent the
breach, to the extent that you are able to do so. You and the Company
acknowledge that any breach or threatened breach by you of any of the provisions
in Section 5(a) 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 you breached any of such provisions, you shall not be entitled to any
Termination Payments from and after date of the breach. In such event, you
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 you did not breach such provision or
determines such provision to be unenforceable as applied to your conduct, you
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.
6. INTELLECTUAL PROPERTY 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 you during the course of performing the Company's work (collectively
the "Work Product") shall belong exclusively to the
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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. You
automatically assign, and shall assign at the time of creation of the Work
Product, without any requirement of further consideration, any right, title, or
interest you may have in such Work Product, including any copyrights or other
intellectual property rights pertaining thereto. Upon request of the Company,
you 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.
7. TRANSFERABILITY.
A) As used in this Agreement, the term "Company" shall include any successor
to all or part of the business or assets of the Company who shall assume and
agree to perform this Agreement.
This Agreement shall inure to the benefit of and be enforceable by you and your
personal or legal representatives, executors, administrators, heirs,
distributees, devisees and legatees.
B) Except as provided under paragraph (a) of this Section 7, neither this
Agreement nor any of the rights or obligations hereunder shall be assigned or
delegated by any party hereto without the prior written consent of the other
party.
8. SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted. If a court of competent jurisdiction
determines that any particular provision of this Agreement is invalid or
unenforceable, the court shall restrict the provision so as to be enforceable.
However, if the provisions of Section 5 shall be restricted, a proportional
reduction shall be made in the payments under Section 4.
9. ENTIRE AGREEMENT; WAIVERS. This letter Agreement contains the entire
agreement of the parties concerning the subject matter hereof and supersedes and
cancels all prior agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written. No waiver or modification of
any provision of this Agreement shall be effective unless in writing and signed
by both parties.
10. NOTICES. Any notices, requests, instruction or other document to be given
hereunder shall be in writing and shall be sent certified mail, return receipt
requested, addressed to the party intended to be notified at the address of such
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party as set for at the head of this agreement or such other address as such
party may designate in writing to the other.
11. GOVERNING LAW. THIS LETTER AGREEMENT SHALL BE SUBJECT TO, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS PRINCIPLES OF CONFLICTS OF LAW.
12. COUNTERPARTS. This letter 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.
Please confirm your agreement with the foregoing by signing and returning
one copy of this letter Agreement to the undersigned, whereupon this letter
agreement shall become a binding agreement between you and the Company.
Sincerely,
PSINet Inc.
By: /s/Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX, SENOR VICE PRESIDENT AND GENERAL COUNSEL
By: /s/Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX, EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER
Accepted and Agreed to as of January 14, 1998:
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By: /s/ Xxxx X. Xxxxxx
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XXXX X. XXXXXX
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