EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of November 13, 2000 (hereinafter
"Agreement"), by and between PSINet Inc. (hereinafter "the Company"), a New York
corporation with its principal place of business located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇ (hereinafter "the Executive").
WHEREAS, the Company has determined that it is in the best interests of
the Company to delegate certain management responsibilities of the Company to
the Executive;
WHEREAS, the Executive is willing to provide her services as an
employee of the Company for the inducements and on the terms and conditions set
forth below in this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT POSITION.
(a) POSITION AND DUTIES. The Company hereby employs the Executive to
serve as Senior Vice President, Corporate Controller of the Company and
the Executive hereby accepts such retention in the capacity and subject
to the terms and conditions hereinafter set forth. This position is a
corporate officer position and, as an officer of the Company, the
Executive must stand for election by the Company's Board of Directors
(the "Board") each year of the Term (as defined in Section 2 hereof).
The Executive shall have such powers, duties, authority, and
responsibilities as are (i) consistent with such position, (ii)
assigned to such offices in the Company's By-laws, and (iii) reasonably
assigned to the Executive by the Chief Financial OFFICER. The Executive
accepts such employment and agrees to remain in the employ of the
Company and provide management services to the Company, as determined
by and under the direction of the Chief Financial Officer.
(b) LOCATION OF EMPLOYMENT. The principal place of employment of the
Executive shall be in the greater Washington, D.C. area. Executive
shall be available to travel to the extent reasonably required to carry
out the duties and responsibilities as Senior Vice President, Corporate
Controller or as otherwise may be reasonably required by the business
of the Company.
(c) MANAGEMENT RESPONSIBILITIES. The Executive shall at all times
perform his or her responsibilities and duties with appropriate care
and consistent with his position as may be assigned by the Chief
Financial Officer and shall at all times exercise reasonable judgment
and discretion in the performance of such responsibilities and duties.
2. TERM OF EMPLOYMENT. The initial term of the Executive's employment
under this Agreement shall commence as of the date of this Agreement and shall
terminate on the second anniversary hereof (the "Initial Term") subject to
earlier termination as provided in Section 6.
Thereafter, this Agreement shall be automatically extended each year for an
additional one (1) year period (each, a "Renewal Term"). The Initial Term
together with any Renewal Term are referred to herein collectively as the
"Term."
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay the Executive a base salary at a
rate of $195,000.00 per year beginning on the date hereof. Beginning on
January 1, 2001 and January 1 of each subsequent year thereafter, the
Executive's base salary shall be increased at a minimum by an amount
equal to five percent (5%) of the Executive's then current base salary.
The Executive's base salary shall be subject to additional increases at
the discretion of the Chief Financial Officer subject to the approval
of the Compensation Committee of the Board (the "Compensation
Committee"). The Executive's base salary shall be payable in such
installments as the Company regularly pays its other salaried
employees. All payments shall be subject to the deduction of payroll
withholdings taxes and similar assessments as required by law or by
further agreement with the Executive.
(b) PERFORMANCE BONUS. The Company will pay the Executive a bonus
subject to the successful completion of the objectives established for
the Executive's performance for each calendar year during the Term. The
performance criteria will be issued separately by the Chief Financial
Officer with respect to each calendar year during the Term, and may be
changed, with mutual fairness, from time to time as situations develop.
The target bonus for the period ending December 31, 2000, will be a
total of up to $65,000.00. Separate criteria will be established for
the Executive's entitlement for the year starting January 1, 2001.
Bonuses in subsequent years during the Term will be at least equal to
the amount of the bonus during the previous calendar year.
(c) STOCK OPTIONS. On the first anniversary of the date of this
Agreement and each subsequent anniversary date during the Term, the
Company shall grant the Executive options to purchase 15,000 shares of
the Company's common stock (the "Options") pursuant to the Company's
Executive Stock Incentive Plan (the "Plan") or another option plan of
the Company, such grant being subject to the terms of this Agreement
and the Executive's continued employment at the time of the grant and
evidenced by an option agreement in such form and under the terms and
conditions set forth in the applicable plan.
(d) VESTING OF STOCK OPTIONS. In the event of a Change in Control (as
defined in Section 3(e) hereof), the Company shall immediately vest all
of the unvested stock options the Executive has received prior to the
date of the Change in Control.
(e) CHANGE IN CONTROL. 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
2
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 (1)
the Company or (2) 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 in 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.
4. FRINGE BENEFITS; AUTOMOBILE ALLOWANCE.
(a) During the Term, the Executive shall be entitled to the maximum
benefits that are generally provided to all senior executives of the
Company under any life insurance, group insurance, medical, retirement,
pension or other employee benefit or incentive plans or pursuant to
other arrangements or understandings (excluding any equity, equity
option or equity bonus plans), so long as any such plan, benefit,
arrangement or understanding remains generally available to all other
senior executive officers of the Company.
(b) During the Term, the Executive shall also receive an automobile
allowance of $800 per month or whatever greater amount the Company pays
to its Executives as a matter of standard practice from time to time.
(c) During the Term, the Executive shall be entitled to financial and
tax advice at the Company's expense through the ▇▇▇▇▇ Companies up to a
maximum amount of $7,000.00 per year.
(d) During the Term, the Executive shall be entitled to four (4) weeks
paid vacation each year which can accumulate to a maximum of six (6)
weeks.
5. EXPENSE REIMBURSEMENT. In addition to the compensation and benefits
provided in Sections 3 and 4, the Company shall, upon receipt of appropriate
documentation, reimburse the Executive for his reasonable travel, lodging,
entertainment, and other ordinary and necessary business expenses incurred in
the course of his duties on behalf of the Company during the Term.
6. TERMINATION. The Term is subject to early termination as provided
below:
(a) TERMINATION BY REASON OF DISABILITY. If at any time during the
Term, the Company determines in good faith that the Executive has been
unable, as a result of physical or mental illness or incapacity, to
perform his duties hereunder for a period of either (i) one hundred
eighty (180) consecutive days during any twelve-month period or (ii)
ninety (90) consecutive days during any twelve-month period if the
Executive's physical or mental illness or incapacity would reasonably
be expected to continue for another consecutive ninety (90) day period
after such initial ninety (90) day period, the Term may be terminated
by
3
the Company upon thirty (30) days' written notice to the Executive.
Should termination occur pursuant to this Section 6(a), the Executive
shall be entitled to receive disability benefits consistent with the
Company's policy.
(b) TERMINATION BY THE COMPANY BECAUSE OF THE EXECUTIVE'S DEATH. In the
event that the Executive's death occurs prior to the expiration of the
Term, the Term shall terminate as of the date of the Executive's death.
In the event of a termination under Section 6(b), all salary and
benefits otherwise payable to the Executive under this Agreement shall
cease immediately.
(c) TERMINATION BY THE COMPANY FOR CAUSE. The Executive's employment
may be terminated by the Company at any time for "Cause." In the event
of a termination for Cause, all salary and benefits otherwise payable
to the Executive shall cease immediately upon such termination. For
purposes of this Agreement, the Company shall have Cause for
termination of the Executive's employment under this Agreement by
reason of (i) any breach by the Executive of his agreement not to
compete or solicit pursuant to Section 7 hereof; (ii) any violation of
Company policy which materially and adversely affects the business or
reputation of the Company; (iii) any act or omission by the Executive
constituting willful misconduct or gross negligence, (iv) the
Executive's conviction of a felony (or a plea of guilty or NOLO
CONTENDRE thereto); (v) the Executive's conviction of any other
criminal action (or a plea of guilty or NOLO CONTENDRE thereto) that
has or might reasonably be expected to have an adverse effect on the
business or reputation of the Company or its subsidiaries; (vi) the
Executive's commission of an act of fraud; (vii) a material breach by
the Executive of any provision of this Agreement which breach and the
effects thereof remain uncured for a period of thirty (30) days after
written notice, specifically identifying the breach, is given to the
Executive by the Company (however, it being expressly understood that
the Company need not provide any notice and may terminate the Executive
immediately where the Company in good faith believes that the
Executive's material breach is not curable within thirty (30) days); or
(viii) the Executive's voluntary resignation without having given the
Company at least thirty (30) days prior written notice.
(d) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate
the employment of the Executive under this Agreement at any time
without cause with thirty (30) days' prior written notice. Should the
Executive be terminated pursuant to this Section 6(d), he shall be
entitled to Termination Payments as provided for in Section 6(f).
(e) EXECUTIVE'S RIGHT TO TERMINATION. The Executive may terminate his
employment at any time, provided that the Executive shall have given
the Company at least thirty (30) days prior written notice of such
termination. In the event of termination by the Executive, the
Executive's salary and benefits shall continue during the notice period
specified by the Executive and shall cease thereafter.
(f) TERMINATION PAYMENTS. A. If the Executive's employment is
terminated by the Company without Cause pursuant to Section 6(d)
(hereinafter the "Termination Event"), the Company shall provide the
Executive the following
4
(collectively, the "Termination Payments"), to be paid or given within
thirty (30) days of the Date of Termination:
(i) a lump sum representing (1) the Executive's monthly
base salary as derived from the Executive's annual
salary and giving effect to all annual increases
thereto as provided in Section 3(a) herein, times the
greater of (y) the number of months remaining in the
current Term or (z) twelve (12) months; and (2) all
other accrued and unpaid amounts due to the Executive
as of the Date of Termination (including, without
limitation, accrued vacation pay and reimbursement of
business expenses);
(ii) a lump sum representing all annual bonus amounts, as
provided for in Section 3(b) hereof, calculated on
the assumption that all performance criteria
objectives would have been exceeded, such that the
Executive would receive the maximum bonus established
by the Chief Financial Officer to which the Executive
would have been entitled had he remained employed by
the Company for the longer of (y) the remainder of
the current Term or (z) twelve (12) months after the
Date of Termination.
B. If the Termination Event occurs within twelve months after
a Change in Control, the Executive is entitled to the Termination
Payments as stated in Section 6(f)(A)(i) and (ii) above as well as the
following:
(iii) continuation of all life insurance and health
benefits, disability insurance and benefits and
reimbursement theretofore being provided to the
Executive and/or his family, or such other more
favorable benefits applicable to any senior executive
officer of the Company, to which the Executive would
have been entitled had he remained employed by the
Company for the longer of (y) the remainder of the
current Term or (z) twelve (12) months after the Date
of Termination, with the exception of the car
allowance as provided in Section 4(b) herein;
(iv) Company contributions, to the extent permitted by
applicable law, to a SEP-▇▇▇, ▇▇▇▇▇ or other
retirement mechanism reasonably selected by the
Executive sufficient to provide the same level of
retirement benefits the Executive would have received
if he had remained employed by the Company for the
longer of (y) the remainder of the current Term or
(z) twelve (12) months after the Date of Termination,
provided, however, that the Company shall make up the
difference in cash payments directly to the Executive
to the extent that applicable law would not permit it
to make such contributions.
C. In consideration of the Termination Payments provided in
this Section 6(f)(A) and (B), the Executive agrees to execute a
termination of employment agreement under which the Executive agrees to
fully release all claims against the Company.
5
(g) NOTICE OF TERMINATION. Any termination of the Executive's
employment during the Term by the Company or by the Executive shall be
communicated by Notice of Termination to the other party hereto given
in accordance with Section 16 of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so indicated, and
(iii) if applicable, specifies a termination date. The failure by the
Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company, as applicable, from
asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
(h) DATE OF TERMINATION. For purposes of this Agreement, "Date of
Termination" means (i) if the Executive's employment is terminated by
reason of death, the date of death; or (ii) if the Executive's
employment is terminated under any other circumstances, the date of
receipt of the Notice of Termination by the party being so notified or
any later date specified therein. For purposes of this Agreement, the
Executive will be deemed to be employed through the end of the calendar
day on the Date of Termination.
(i) TAX PROVISIONS. In the event that any payments under this Agreement
or any other compensation, benefit or other amount from the Company for
the benefit of the Executive are subject to the tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code")
(including any applicable interest and penalties, the "Excise Tax"), no
such payment ("Parachute Payment") shall be reduced (except for
required tax withholdings) and the Company shall pay to the Executive
by the earlier of the date such Excise Tax is withheld from payments
made to the Executive or the date such Excise Tax becomes due and
payable by the Executive, an additional amount (the "Gross-Up Payment")
such that the net amount retained by the Executive (after deduction of
any Excise Tax on the Parachute Payments, taxes based upon the Tax Rate
(as defined below) upon the payment provided for by this Section 6(i)
and Excise Tax upon the payment provided for by this Section 6(i)),
shall be equal to the amount the Executive would have received if no
Excise Tax had been imposed. A Tax counsel chosen by the Company's
independent auditors, provided such person is reasonably acceptable to
the Executive ("Tax Counsel"), shall determine in good faith whether
any of the Parachute Payments are subject to the Excise Tax and the
amount of any Excise Tax, and Tax Counsel shall promptly notify the
Executive of its determination. The Company and the Executive shall
file all tax returns and reports regarding such Parachute Payments in a
manner consistent with the Company's reasonable good faith
determination. For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay taxes at the Tax Rate
applicable at the time of the Gross-Up Payment. In the event that the
Excise Tax is subsequently determined to be less than the amount taken
into account hereunder at the time a Parachute Payment is made, the
Executive shall repay to the Company promptly following the date that
the amount of such reduction in Excise Tax is finally determined the
6
portion of the Gross-Up Payment attributable to such reduction (without
interest). In the event that the Excise Tax is determined to exceed the
amount taken into account hereunder at the time a Parachute Payment is
made (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), the
Company shall pay the Executive an additional amount with respect to
the Gross-Up Payment in respect of such excess (plus any interest or
penalties payable in respect of such excess) at the time that the
amount of such excess is finally determined. The Company shall
reimburse the Executive for all reasonable fees, expenses, and costs
related to determining the reasonableness of any Company position in
connection with this paragraph and preparation of any tax return or
other filing that is affected by any matter addressed in this
paragraph, and any audit, litigation or other proceeding that is
affected by any matter addressed in this Section 6(i) and an amount
equal to the tax on such amounts at the Executive's Tax Rate. For the
purposes of the foregoing, "Tax Rate" means the Executive's effective
tax rate based upon the combined federal and state and local income,
earnings, Medicare and any other tax rates applicable to the Executive,
all at the highest marginal rate of taxation in the country and state
of the Executive's residence on the date of determination, net of the
reduction in federal income taxes which could be obtained by deduction
of such state and local taxes.
7. COVENANTS OF EXECUTIVE
(a) COVENANT NOT TO COMPETE. In consideration of the Executive's
employment pursuant to this Agreement and for other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the Executive agrees that, so long as the Executive is
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), the Executive
shall not, without the prior written consent of the Company, either for
the Executive or for any other person, firm or corporation, own,
manage, operate, control, be employed by, participate in or be
associated in any manner with the ownership, management, operation or
control of any business providing Internet-related, E-commerce,
web-hosting, network or communication services competitive with the
Company as of the Date of Termination or within six (6) months
thereafter. The foregoing shall in no event restrict the Executive
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 Internet-related,
E-commerce, or web-hosting network or communication services that are
competitive with the services offered by the Company as of the Date of
Termination or within six (6) months thereafter.
(b) NONSOLICITATION. In consideration of the Executive's employment
pursuant to this Agreement and for other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the Executive agrees that, so long as the Executive is
employed by the Company under this Agreement and for a period of
eighteen (18) months following the termination of such
7
employment, the Executive agrees not to hire, solicit, nor attempt to
solicit for himself or any third party, the services of any employee or
subcontractor of the Company or any of the Company's subsidiaries or
affiliates without the Company's prior written consent; provided,
however, that the Executive is not prevented from employing such person
who contacts the Executive on his or her own initiative and without any
direct or indirect solicitation by the Executive.
(c) BREACH/THREATENED BREACH. The Executive may request permission from
the Company's Board of Director's to engage in activities which would
otherwise be prohibited by Section 7(a) or (b). The Company shall
respond to such request within thirty (30) days after receipt. The
Company shall notify the Executive in writing if it becomes aware of
any breach or threatened breach of any of the provisions in Section
7(a) or (b), and the Executive shall have thirty (30) days after
receipt of such notice in which to cure or prevent the breach, to the
extent that the Executive is able to do so. The Executive and the
Company acknowledge that any breach or threatened breach by the
Executive of any of the provisions in Section 7(a) or (b) 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 the Executive breached any of such provisions, the
Executive shall not be entitled to any Termination Payments from and
after date of the breach. In such event, the Executive 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 the Executive did not
breach such provision or determines such provision to be unenforceable
as applied to the Executive's conduct, the Executive 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.
(d) 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 the Executive 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. The Executive automatically
assigns, and shall assign at the time of creation of the Work Product,
without any requirement of further consideration, any right, title, or
interest the Executive may have in such Work Product, including any
copyrights or other intellectual property rights pertaining thereto.
Upon request of the Company, the Executive 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.
(e) EQUITABLE RELIEF. The Executive acknowledges and agrees that the
covenants and obligations of Executive contained in Section 7 hereof
relate to special, unique and extraordinary matters and are reasonable
and necessary to
8
protect the legitimate interests of the Company and that a breach of
any of the terms of such covenants and obligations will cause the
Company irreparable harm and injury for which adequate remedies at law
are not available. The Executive therefore agrees that the Company need
not prove actual damages in order to obtain injunctive relief, a
restraining order, an order of specific performance or any other
equitable relief (together, "Equitable Relief") with respect to any of
Executive's obligations under Section 7. The Executive hereby waives
any claim or defense therein that the Company has an adequate remedy at
law or that money damages would provide an adequate remedy. It shall,
however, be the option of the Company whether or not to seek Equitable
Relief.
8. REPRESENTATION AND WARRANTIES.
(a) THE COMPANY. The Company hereby represents and warrants to the
Executive as follows:
(i) the Company is duly organized, validly existing and
in good standing under the laws of the State of New
York;
(ii) this Agreement has been duly authorized, executed and
delivered by the Company and will constitute the
legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws
affecting the rights of creditors generally and to
general principles of equity whether considered in a
suit at law or in equity; and
(iii) the execution and delivery of this Agreement by the
Company, the performance by the Company of its
obligations hereunder and the consummation by the
Company of the transactions contemplated hereby will
not violate any agreement to which the Company is a
party.
(b) EXECUTIVE. The Executive hereby represents and warrants to the
Company as follows:
(i) this Agreement has been duly executed and delivered
by the Executive and will constitute the legal, valid
and binding obligation of the Executive, enforceable
against the Executive in accordance with its terms,
subject to applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the rights
of creditors generally and to general principles of
equity whether considered in a suit at law or in
equity;
(ii) the execution and delivery of this Agreement by
Executive, the performance by the Executive of his
obligations hereunder and the consummation by the
Executive of the transactions contemplated hereby
will not violate any agreement to which he is a
party; and
9
(iii) the Executive has made such investigations of the
business and properties of the Company as he deems
necessary or appropriate before entering into this
Agreement.
9. TRANSFERABILITY.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company, its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, share exchange or
otherwise) to all or substantially all of the business and/or assets of
the Company to expressly assume in writing and agree to perform this
Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as defined
herein and any successor to its businesses and/or assets as aforesaid
that assumes and agrees to perform this Agreement by operation of law,
or otherwise. A failure of the Company to cause a successor to assume
this Agreement in any such transaction shall be a breach of this
Agreement by the Company.
10. NONEXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
plan, program, policy or practice provided by the Company and for which the
Executive may qualify (except with respect to any benefit to which the Executive
has waived his rights in writing), nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any other contract or
agreement entered into after the date of this Agreement with the Company.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any benefit, plan, policy, practice or program of, or any
contract or agreement entered into with, the Company shall be payable in
accordance with such benefit, plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
11. FULL SETTLEMENT; MITIGATION. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts (including amounts for damages for breach) payable to the
Executive under any of the provisions of this Agreement, and such amounts shall
not be reduced whether or not the Executive obtains other employment. In
addition, in the event of a Change in Control only, the Company's obligation to
make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against the Executive or others.
12. NO WAIVER. The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder shall not be deemed to
be a waiver of such provision or right or any other provision or right of this
Agreement.
10
13. ARBITRATION. With the exception of disputes arising under Section 7
hereof, any dispute arising under this Agreement shall be settled by arbitration
in accordance with the rules of the American Arbitration Association and
judgment upon the award rendered by the arbitrator may be rendered in any court
having jurisdiction thereof. Arbitration hereunder shall be by a single
arbitrator appointed by agreement of the parties. The parties shall agree that
any arbitration award shall be final and binding on the parties. Except as
stated otherwise in Paragraph 14 of this Agreement, each party shall bear its
own costs and attorneys' fees associated with the arbitration.
14. COSTS TO THE EXECUTIVE AFTER CHANGE IN CONTROL. Notwithstanding
anything in this Agreement to the contrary, if, following a Change in Control,
any successor in interest to the Company unsuccessfully contests and/or
challenges any of the Executive's rights under this Agreement, then the
successor in interest to the Company shall pay the Executive's reasonable
attorney's fees and costs incurred in such contest or challenge.
15. SEVERABILITY. The provisions of this Agreement will be deemed
severable, and if any part of any provision is held to be illegal, void,
voidable, invalid, nonbinding, or unenforceable in its entirety or partially or
as to any party, for any reason, such provision may be changed, consistent with
the intent of the parties hereto, to the extent reasonably necessary to make the
provision, as so changed, legal, valid, binding, and enforceable. If any
provision of this Agreement is held to be illegal, void, voidable, invalid,
nonbinding, or unenforceable in its entirety or partially or as to any party,
for any reason, and if such provision cannot be changed consistent with the
intent of the parties hereto to make it fully legal, valid, binding, and
enforceable, then such provision will be stricken from this Agreement, and the
remaining provisions of this Agreement will not in any way be affected or
impaired, but will remain in full force and effect.
16. ENTIRE AGREEMENT/AMENDMENTS. This Agreement contains and its terms
constitute the entire agreement of the parties and supersedes all prior
agreements regarding the subject matter herein. This Agreement supersedes and
replaces any prior or contemporaneous agreements, negotiations, correspondence,
undertakings and communications of the parties, oral or written. No amendment or
modification of any provision of this Agreement shall be effective unless in
writing and signed by the party against whom enforcement of such amendment or
modification is sought.
17. NOTICES. All notices required to be given or which may be given
under this Agreement shall be in writing delivered in accordance with one or
more of the following and shall be deemed received upon the earlier of (i) when
it is personally delivered to the party, (ii) three (3) days after having been
mailed by certified mail, postage prepaid, return receipt requested, (iii) two
(2) days after having been sent via overnight delivery by a recognized overnight
delivery service, or (iv) one (1) day after having been sent via facsimile
transmission, in each case addressed to the party intended to be notified at the
address of such party as set forth in the records of the Company or such other
address as such party may designate in writing to the other.
18. GOVERNING LAW. This Agreement shall be governed by the laws of the
Commonwealth of Virginia without giving effect to the conflicts of law
principles thereof.
19. SURVIVAL. All provisions which may reasonably be interpreted or
construed to survive the expiration or termination of this Agreement shall
survive the expiration or termination of this Agreement.
11
20. COUNTERPARTS. This 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.
21. EXECUTION. This Agreement shall be deemed effective upon the
execution by the Company and the Executive.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as the date first written above.
Executive:
/s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------
▇▇▇▇ ▇. ▇▇▇▇
PSINet Inc. ("Company"):
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Chairman and Chief Executive Officer
12
