(e)(12)
May 7, 2000
Xxxxx X. Xxxxxxxx
00 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
As you know, Verio Inc. ("Verio") is entering into the Agreement and
Plan of Merger among NTT Communications Corporation, Chaser Acquisition, Inc.
("Acquisition Sub") and Verio Inc. dated as of May 7, 2000 (the "Merger
Agreement") pursuant to which it is anticipated that Acquisition Sub will
acquire all the outstanding capital stock of Verio. As you also know, Xxxxx has
offered to continue your current employment after the consummation of the Offer
and the Merger (both as defined in the Merger Agreement). Therefore, in
consideration of such continued employment and the mutual covenants and
agreements contained herein, Xxxxx and you agree as follows:
1. Effective immediately after consummation of the Offer (as defined
in the Merger Agreement), Section 2.5 of the Compensation Protection Agreement
between Verio and you dated September 3, 1998, (the "Protection Agreement") is
amended by adding the following new subsection (f) immediately following
subsection (e) appearing therein:
"(f) Notwithstanding anything contained in this Agreement to the
contrary, no acquisition of the Company's voting securities by, nor
any merger, consolidation or reorganization of the Company with,
any entity (or entities) that directly or indirectly is controlled
by or is under common control with the NTT Communications
Corporation shall constitute a Change in Control."
2. Subsections (i) through (iv) of Section 2.8(a) of the Protection
Agreement are amended in their entirety to read as follows:
"(i) (A) a change in Protected Officer's title, position or
responsibilities (including reporting responsibilities) which
represent a material adverse change from Protected Officer's title,
position or responsibilities as in effect at the execution of the
Agreement and Plan of Merger dated as of May 7, 2000
(the "Merger Agreement") among NTT Communications Corporation
("NTT"), Chaser Acquisition Inc., and the Company; (B) the
assignment to Protected Officer of any material duties or
responsibilities which are significantly inconsistent with
Protected Officer's title, position or responsibilities as in
effect at the execution of the Merger Agreement; or (C) any removal
of Protected Officer from or failure to reappoint or reelect
Protected Officer to any of such offices or positions, except in
connection with the termination of Protected Officer's employment
for Disability, Cause, as a result of Protected Officer's death or
by Protected Officer other than for Good Reason;
(ii) reduction in Protected Officer's base salary to a level below
that in effect at the execution of the Merger Agreement (except to
the extent such reduction is part of a comprehensive reduction in
salary applicable to employees of the Company generally so long as
the reduction applicable to Protected Officer is comparable to the
reduction applied to other senior executives of the Company), or
any failure to pay Protected Officer any compensation or benefits
to which Protected Officer is entitled within five (5) days of the
date due other than an inadvertent failure, administrative error or
on account of events beyond the control of the Company;
(iii) the Company's requiring Protected Officer to be based at any
place outside the farther of a 50-mile radius Protected Officer's
job location and a 50-mile radius of the Protected Officer's
residence prior to the execution of the Merger Agreement, except
for reasonably required travel on the Company's business which is
not materially greater than such travel requirements prior to the
execution of the Merger Agreement, determined without regard to
travel to meet with representatives of Parent (as defined in the
Merger Agreement); or
(iv) the failure by the Company to provide Protected Officer with
compensation and benefits (other than any compensation or benefits
under any stock option, stock purchase or other compensation or
benefit plans, programs or practices payable in or measured by the
value of the Company's common stock) in the aggregate, not
significantly less (in terms of benefit levels and/or reward
opportunities) to those provided under the employee benefit plans,
programs and practices, including,
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but not limited to, the plans listed on Appendix A, in which
Protected Officer was participating at the execution of the Merger
Agreement or which are provided to other similarly situated
executives of the Company, except to the extent such failure is
part of a comprehensive reduction in compensation or benefits
applicable to employees of the Company generally so long as the
reduction applicable to Protected Officer is comparable to the
reduction applied to other senior executives of the Company."
3. Subsection (viii) of Section 2.8(a) of the Protection Agreement is
amended in its entirety to read as follows:
"(viii) the failure of the Company to obtain an agreement,
satisfactory to Protected Officer, from any Successors and Assigns
(as hereinafter defined) to assume and agree to perform this
Agreement, as contemplated by Section 11.1 hereof, provided,
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however, that Good Reason shall not include a failure by NTT or any
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of its affiliates to assume and perform this Agreement in
connection with the Merger."
4. The following new Section 2.8(d) is added immediately after
Section 2.8(c) of the Protection Agreement:
"(d) For purposes of this Agreement, notwithstanding anything
contained herein to the contrary, neither (i) any change in the
Protected Officer's position or responsibilities that results
primarily from the change in the status of the Company from a
company the common stock of which is registered under the
Securities Act of 1934 and traded on a national securities exchange
or the NASDAQ National Market to a subsidiary of NTT, nor (ii) any
change in the Protected Officer's amount or level of participation
in the retention and incentive plan referred to in Section 6.14(a)
of the Merger Agreement, as compared to the amount or level of
participation in incentive plans of Verio prior to consummation of
the transactions contemplated by the Merger Agreement, shall by
itself or in combination with any other event or events constitute
Good Reason."
5. Subsection (iv) of Section 4.1(b) of the Protection Agreement is
amended in its entirety to read as follows:
"(iv) the restrictions on any outstanding incentive awards
(including restricted stock and granted performance shares or
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units) granted prior to the execution of the Merger Agreement to
Protected Officer under the Company's stock option and other stock
incentive plans or under any other incentive plan or arrangement
shall lapse and such incentive award shall become 100% vested, all
stock options and stock appreciation rights granted prior to the
execution of the Merger Agreement to Protected Officer shall become
immediately exercisable and shall become 100% vested and all
performance units granted prior to the execution of the Merger
Agreement shall become 100% vested."
6. If you are employed by Xxxxx:
(i) thirteen months after the date the Offer (as defined in the
Merger Agreement) is consummated and have been continuously
employed by Xxxxx since the date of this letter agreement, Xxxxx
will pay to you an amount equal to one-half of the Employment Bonus
(as defined below); and
(ii) twenty-five months after the date the Offer (as defined in
the Merger Agreement) is consummated and have then been
continuously employed by Xxxxx since the date of this letter
agreement, Xxxxx will pay to you the remainder of the Employment
Bonus.
You acknowledge and agree that any amounts that may become payable to
you (or your successors) pursuant to the grants made as of the Effective Time
(as defined in the Merger Agreement) under the retention and incentive plans
adopted by Verio pursuant to Section 6.14(a) of the Merger Agreement shall be
reduced by the amounts paid to you pursuant to this paragraph 6.
For purposes of this paragraph 6, the "Employment Bonus" shall mean
(a) two times the sum of:
(i) the amount of your annual base salary in effect immediately
prior to the consummation of the Offer (as defined in the Merger
Agreement), including all amounts of your annual base salary that
are then deferred under the qualified and non-qualified employee
benefit plans of Verio or any other agreement or arrangement; and
(ii) the greater of (i) 100% of the last annual incentive payment
paid or payable to you prior to the consummation of the Offer (as
defined in the Merger Agreement) under Xxxxx's
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cash bonus incentive plan; and (ii) your incentive target for the
fiscal year in which such Offer is consummated.
7. You acknowledge and agree that your continued employment by Xxxxx
after consummation of the Offer (as defined in the Merger Agreement) and your
participation in Xxxxx's incentive and retention programs thereafter shall be
subject to your execution prior to consummation of the Offer of (i) an agreement
to remain employed by Xxxxx immediately after the consummation of the Offer,
(ii) a written covenant not to compete with or solicit employees of Xxxxx and
its affiliates in the United States for a period ending at the later of two
years following the consummation of the Offer and one year after termination of
employment and (iii) an agreement to maintain the confidentiality of
confidential information and data of Verio and its affiliates, each in a form
reasonably satisfactory to NTT and Verio.
8. This letter agreement (and the amendments to the Protection
Agreement contained herein) shall cease to be effective upon the termination of
the Merger Agreement pursuant to its terms.
9. Nothing in this letter agreement entitles you to be employed by
Xxxxx for any specific period of time or otherwise interferes with your status
as an employee at will of Verio.
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Please indicate your acceptance of the terms hereof by executing a
copy of this letter agreement and returning it to the undersigned.
Very truly yours,
/s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
Accepted:
/s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx Date: May 7, 2000
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