EXHIBIT 10.53
January 18, 1998
Xx. Xxxxxxxx X. Xxxxx
00000 Xxxxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Dear Xxxxx:
This letter confirms your employment by PSINet Inc. (the "Company"), and sets
forth the terms and conditions which shall govern such employment as outlined
below. This agreement amends the terms of your employment agreement dated March
6, 1996.
1. EMPLOYMENT:
A) The Company hereby employs you as Vice President and Assistant General
Counsel reporting to the Senior Vice President and General Counsel. You accept
the employment and agree to 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 professional legal services to the Company,
as determined by and under the direction of the General Counsel.
B) In connection with your employment by the Company, your principal place of
employment shall be the greater Washington, D.C. area and you shall not be
required permanently to relocate to a principal place of business outside such
area during the term of your employment hereunder.
C) 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. TERM OF EMPLOYMENT. The term of the employment shall commence on January
18, 1998, and shall continue for a period of three (3) years.
3. COMPENSATION:
A) BASE SALARY. The Company shall pay you a base salary at the rate of
$190,000 per annum. On January 1st of each succeeding year during the term of
this Agreement, your base salary shall be increased at a minimum by an amount
equal to 5% of your then current base salary. Your base salary shall be subject
to additional increases at the discretion of the Company's Chairman and CEO.
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) PERFORMANCE BONUS. 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 Company's
General Counsel, at the beginning of each year, and may be changed, with
fairness, from time to time as situations develop. The performance bonus for
the period ending December 31, 1998 and for subsequent years will be $40,000 or
greater.
C) INCENTIVE STOCK OPTIONS. In the event of a Change of Control, as defined in
Section 8 below, or upon the occasion of your death during the term of this
Agreement while you are in compliance with the requirements hereof, the Company
shall (i)vest immediately all of the unvested stock options you received
pursuant to the terms of your employment agreement dated Xxxxx 0, 0000, (xx) in
the event that your employment is terminated or continued under conditions not
substantially the same as those called for in this Agreement, the Company shall
provide a loan sufficient to exercise all vested stock options and pay any
required taxes to which you may be subjected as a result, with the terms of the
loan to be no less favorable than installment free for the duration, interest
charged at the IRS minimum rate, with a 5 year balloon payment for interest and
principal.
4. EMPLOYEE BENEFITS. You shall be provided employee benefits, including
(without limitation) 401(k), revenue bonus plan participation, four weeks' paid
vacation (which can accumulate to a maximum of eight weeks), 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.
5. TERMINATION:
A) Your employment with the Company may be terminated by the Company at any
time for "Cause" as defined in Section 5(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 6(a) hereof. Your employment may
also be terminated by the Company at any time without Cause provided the 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 within the term of your employment, you will be paid
severance pay equal to 26 weeks' salary, plus pro-rata bonus, continued vesting
of options and benefits for the remainder of such period. 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 6 hereof, in
the event that your employment terminates or is terminated by you or the Company
for any
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reason, and the Company has elected to use the non-Competition restriction, you
shall be entitled, for a period of twelve (12) months after termination of
employment, to the following (unless, in the case of a termination of your
employment by the Company during the term of your employment without Cause, the
payments and benefits to which you would be entitled under paragraph 5(a) would
be greater than those provided in this paragraph 5(b), in which case, paragraph
5(a) shall govern to the extent that such payments and benefits exceed those
specified in paragraph 5(b)) (collectively, the "Termination Payments"): (i)
your then current rate of base salary as provided in Section 3; (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 12-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. If the Company has not elected
to exercise the non-competition restriction, except as otherwise provided in
paragraph 5(a), eight (8) weeks of severance will be paid on your last day of
employment.
C) The Company shall have "Cause" for your termination of your employment by
reason of any breach of your agreement not to compete pursuant to Section 6
hereof, your committing an act materially adversely affecting the Company which
constitutes wanton or willful misconduct, your conviction of a felony, your
voluntary resignation, or any material breach by you of this Agreement.
6. 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 twelve
(12) 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 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)
the general practice of law, either individually or in a private firm practice,
; (ii) writing or teaching, whether on behalf of for-profit, or not-for-profit
institution(s); (iii) investing (without participating in management or
operation) in the securities of any private or publicly traded corporation or
entity; or (iv) 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 6(a). The Company
shall respond
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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 6(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 6(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.
7. 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 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.
8. 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 8, 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.
C) As used in this Agreement, "Change in Control" shall mean: (i) the
shareholders of the Company approve an agreement for the 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
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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
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 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 (A) the Company, (B) 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 of 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
30% or more of the combined voting power of the Company's then outstanding
securities.
9. 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 6 shall be restricted, a proportional
reduction shall be made in the payments under Section 5(b).
10. 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.
11. 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
party as set for at the head of this agreement or such other address as such
party may designate in writing to the other.
12. 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.
13. 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.
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XXXXX EMPLOYMENT AGREEMENT SIGNATURE PAGE
Please confirm your agreement with the forgoing 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, Senior Vice President and General Counsel
Accepted and Agreed to as of
the day first above written:
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------------------------
Xxxxxxxx X. Xxxxx
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