Exhibit 10.11
AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amendment to the Amended and Restated Employment Agreement (this
"Agreement") is made as of February 22, 1999, by and among CAIS Internet, Inc.,
a Delaware corporation, (the "Company"), and Xxxxxxx X. Xxxxxxxx, XX (the
"Employee").
RECITALS:
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1. The Company is party to a certain amended and restated employment
agreement (the "Employment Agreement"), dated as of September 8, 1997
between CAIS, Inc., a Virginia corporation, and Employee.
2. The Company and the Employee are parties to certain stock option
agreements (the "Stock Option Agreements"), dated as of October 2, 1998.
3. The Company, the Employee and CAIS, Inc. are parties to a certain
assignment and assumption agreement and release (the "Assignment"),
dated as of October 2, 1998, pursuant to which CAIS, Inc. assigned all
of its rights and obligations under the Employment Agreement to the
Company.
4. In February 1999, the Company transferred all of its limited partnership
interests in Cleartel Communications Limited Partnership ("Cleartel LP")
to Cleartel Communications, Inc. ("Cleartel") and Cleartel LP was
dissolved. The Company then completed the spin-off of Cleartel by means
of a distribution of all of its shares in Cleartel to the Company's
stockholders pro rata based on their percentage ownership of the
outstanding shares of the Company (the "Spin-offf").
5. Pursuant to the Spin-off, options granted by the Company to persons
prior to the Spin-off, represent rights to purchase shares in both the
Company and Cleartel (the "Options").
6. Pursuant to the Employment Agreement, the Stock Option Agreements and
the Assignment, the Employee was granted Options.
7. The Company and the Employee desire to modify and clarify certain
terms of the Employment Agreement, the Stock Option Agreements and the
Assignment, including (i) the Employee's title, and (ii) the
accelerated vesting provisions of the Options.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows.
1. Amendment to Duties of Employment in Section 1(A). The Employment
Agreement is hereby amended by deleting Section 1(A) in its entirety and
substituting in lieu thereof the following new section:
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"(A) The Employer does hereby employ the Employee in the capacity of
President, to supervise and control all of the business and
affairs of the Employer and perform all duties incident to the
office of President and such other duties as the Employer may
from time to time designate."
2. Amendment to Section 2 of the Employment Agreement. The Employment
Agreement is hereby amended by deleting Section 2 in its entirety and
substituting in lieu thereof the following new section:
"2. Compensation of Employee.
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As the sole compensation for the all of the Employee's services
rendered hereunder to the Employer, the Employer hereby agrees to
pay the Employee compensation and reimbursements as set forth in
Exhibits "A" and "B," attached hereto and made a part hereof."
3. Amendment to Section 3 of Exhibit A to the Employment Agreement. The
Employment Agreement is hereby amended by deleting Section 3 of Exhibit
A in its entirety.
4. Amendment to Vesting and Forfeiture of Equity Interest in Section 1(
B)(2) of Exhibit B to the Employment Agreement. The Employment Agreement
is hereby amended by deleting Section 1( B)(2) of Exhibit B in its
entirety and substituting in lieu thereof the following new section:
"(2) Accelerated Vesting.
a. In the event and to the extent the Employee, prior to the end
of Employment Year 3, achieves or exceeds Employer's goal of raising
debt and/or equity of $150 million, and provided that the fees and
expenses directly attributable to raising such funds are (i) less than
or equal to 8% of the funds so raised or (ii) less than or equal to
10% of the funds so raised in the case of funds raised through an
initial public offering of Employer's stock, then the first one-half
(1/2) of the Option Shares shall become fully vested upon receipt of
such funds by the Employer, and the remaining one-half ( 1/2) of the
Option Shares shall become fully vested at the end of Employment Year
4 provided that the Employee then remains employed by the Employer.
If, prior to the vesting dates set forth in subparagraph 1(B)(1),
a merger or a sale of substantially all of the Company' s assets
occurs that results in the removal of current management or a change
of ownership control of the Company from current ownership control,
then the vesting of the Option Shares will accelerate and become
effective as of one day prior to the effective day of such merger or
sale; provided, however, that in the event that an Initial Public
Offering of the stock of the Company occurs prior to the end of
Employment Year 2, and provided that
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Employee then remains employed by the Employer, then seventy-five
percent (75%) of the Option Shares shall vest on the date immediately
prior to the earliest to occur of: (i) the effective date of a
Registration Statement; or (ii) the pricing of the Initial Public
Offering; or (iii) the execution and delivery of an underwriting
agreement related to an Initial Public Offering, and the remaining
twenty-five percent (25%) of the Option Shares shall vest at the end of
Employment Year 4 provided that Employee then remains employed by the
Employer, and otherwise such interest shall be forfeited and revert back
to the Employer.
Employer and Employee agree that in the event that the Company's
Operator Services business is spun off into a separate entity,
Employee's pro-rata equity interest in such spun off entity shall be
reduced in conjunction with the formation of such entity on the same
basis and in the same proportions as are the equity interests of all
other shareholders of the Company. Employer and Employee agree that the
formation of such spun off entity, even if undertaken in conjunction
with unrelated entities, shall not trigger the accelerated vesting
provisions of subparagraph 1(B)(2)(a). Any event as described in
subparagraph 1(B)(2)(a) occurring subsequent to the formation of the
spun off entity and affecting only such spun off entity shall trigger
the accelerated vesting provisions of subparagraph 1(B)(2)(a) only with
respect to Employee's interest in the spun off entity, and shall not
trigger the accelerated vesting provisions of subparagraph1(B)(2)(b)
with respect to Employee's interests in the Company."
5. Addition of Section 6 Regarding Expiration of Equity Interest in Exhibit
B to the Employment Agreement. The Employment Agreement is hereby
amended by adding a new section to Exhibit B which shall read as
follows:
"6. Expiration.
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The Option Shares shall terminate ten years from the date of
issuance."
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
[Signatures appear on the following page]
THE COMPANY:
CAIS INTERNET, INC.
By: /s/ Xxxxxxx X. Xxxxx, XX
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Xxxxxxx X. Xxxxx, XX
Chief Executive Officer
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EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxxx, XX
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Xxxxxxx X. Xxxxxxxx, XX
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