Exhibit 10.58
October 16, 1998
Xx. Xxxxxx X. Postal
0000 Xxxxxxx Xxxx Xxxxxxx
Xxxxxxx, XX 00000
Dear Ed:
This letter confirms our Agreement concerning your continued 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 October 1, 1996.
1. EMPLOYMENT.
a) The Company hereby employs you as Senior Vice President and Chief
Financial Officer for the Company, although you may serve in other executive
capacities within the Company and/or its subsidiaries as the Board of Directors
of the Company shall determine is appropriate over time. 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 remain
in the employ of the Company, and, except during vacations or periods of
illness, to provide management services to the Company, as determined by and
under the direction of the Chairman of the Company.
With respect to the provisions of said services, the parties agree to
observe and to abide by the terms and conditions set forth herein.
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 the
greater Washington, D.C. 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 under this Agreement shall
commence on October 1, 1998, and shall continue for a period of four (4) years.
3. COMPENSATION.
a) BASE SALARY. The Company shall pay you a base salary at the rate of
$265,000 per annum beginning October 1, 1998. Beginning on January 1, 2000 and
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 five percent
(5%) of your then current base salary. Your base salary shall be subject to
additional increases at the discretion of the Compensation Committee 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) 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
Chairman, at the beginning of each year, and may be changed, with mutual
fairness, from time to time as situations develop. The performance bonus for the
period ending December 31, 1998 will be $115,000. The performance bonus for
subsequent years will be $115,000 or greater, as determined by the Compensation
Committee of the Company's Board of Directors.
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 have
received pursuant to the terms of your employment agreement dated October 1,
1996, as well as any unvested stock options you may receive during the period of
your employment hereunder, (ii) 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 five (5)
year balloon payment for interest and principal.
4. EMPLOYEE BENEFITS. You shall be provided employee benefits, including
(without limitation) 401(k) and related plans, revenue bonus plan participation,
four weeks' paid vacation which can accumulate to a maximum of two (2) years
(eight (8) weeks), and life, health, accident and disability insurance under the
Company's standard plans, policies and programs available to employees in
accordance with the provisions of such plans, policies, and programs.
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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. In the event of a
termination for "Cause", all salary and benefits otherwise payable to you shall
cease immediately upon such termination. 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. Termination by the Company or its
successors in interest for any reason other than Cause shall be deemed a breach
hereof. 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. In the event of termination by you,
your salary and benefits shall continue during the thirty (30) day notice period
and shall cease thereafter, subject to the provisions of Section 5(b) hereof. By
the thirtieth (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 reason, 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 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 twenty-four (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 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 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 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
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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 Directors to
engage in activities which would otherwise be prohibited by Section 6(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 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 thirty (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 twelve percent (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 twelve percent (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. 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.
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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 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 (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 thirty percent (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.
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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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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/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Chairman & CEO
Accepted and Agreed to as of , 1998:
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By: /s/ Xxxxxx X. Postal
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Xxxxxx X. Postal
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