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Sample Business Contracts

Employment Agreement - CAIS Inc. and Evans K. Anderson

Employment Forms

  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
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  • Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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                   AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                   -----------------------------------------

     THIS AGREEMENT made as of the 3rd day of June, 1997, by and between CAIS,
Inc., (hereinafter referred to as the "Employer" or the "Corporation"), and
Evans K. Anderson (hereinafter referred to as the "Employee").

               WITNESSETH:

     WHEREAS, the Employer is engaged, inter alia, in the business of providing
                                       -----------                             
Internet services and related activities and operations throughout the United
States of America; and

     WHEREAS, the Employee is experienced in the operation and marketing of
communications services; and

     WHEREAS, Employer and Employee heretofore entered into a certain Employment
Agreement dated as of February 6, 1997 as amended by that certain First
Amendment to Employment Agreement dated June 3, 1997 (together the "Employment
Agreement"); and

     WHEREAS, Employee also understands and hereby accepts that the Performance
Targets described in Exhibit A are based on the Employer's current lines of
business and current investments, and consequently, to the extent other lines of
business, such as OverVoice are offered for sale by CAIS, an adjustment to the
Performance Targets will be necessitated, such adjustment to be made on
reasonable terms mutually acceptable to Employer and Employee.

     WHEREAS, pursuant to Section 4(B)(5) of Exhibit "A" to the Employment
Agreement, Employer and Employee agree that they would each respectively
cooperate to structure the conferral, vesting and forfeiture provisions of the
Employment Agreement to minimize the federal income tax consequences to both
such parties; and

     WHEREAS, consistent with that intent both Employer and Employee desire
hereby to amend and restate the Employment Agreement in its entirety as herein
set forth.

     NOW, THEREFORE, in consideration of the premises, which are incorporated
into and made part of this Agreement, and of the mutual covenants and agreements
herein contained, the parties hereby amend and restate the Employment Agreement
in its entirety as follows:

     1.  Duties and Term of Employment.
         ------------------------------

         (A)    The Employer does hereby employ the Employee in the capacity of
Vice-President and General Manager of CAIS to manage the overall business
interests of CAIS, to manage the Employer's sales, to develop new business
opportunities and to perform such other duties as Employer may from time to time
designate.

         (B)    The Employee's employment hereunder shall commence on or before
March 3, 1997 and shall continue for a period of four (4) years thereafter,
unless sooner terminated as hereinafter provided.
<PAGE>
 
     2.  Compensation of Employee.
         -------------------------
         As the sole compensation for 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 Exhibit "A" attached hereto and
made a part hereof.

     3.  Conduct of Employee.
         --------------------
         Employee does hereby accept said employment under the terms and
conditions herein set forth, and further agrees that during the term hereof
Employee will devote full time, attention and energies to the business of the
Employer, and will not, without the prior written consent of Employer, actively
engage in any other business, employment or undertaking whatsoever, during the
said period of time. Employee further agrees to, at all times during the term
hereof, abide by and comply with the directions, instructions and decisions of
the Employer and, during the term hereof, to dutifully and faithfully carry out
and perform the duties and obligations of Employee's position, as herein set
forth.

         Employer acknowledges that Employee has an ownership interest in
another business, which is operated by another member of Employee's family.
Employer agrees that provided that this business does not affect Employee's
performance of his duties, responsibilities and obligations under this
Agreement, and provided also that such business will not represent, sell or
market products or services directly competitive with those currently offered by
Employer or by entities currently affiliated with Employer, then Employee may
continue his ownership interest in such other business. To the extent such
business represents or sells Employer's products or services, or products or
services of Employer's affiliates, Employee will not be directly involved on
behalf of Employer, or on behalf of entities currently affiliated with Employer,
in any business and pricing discussions, negotiations or decisions involving
such other business.

     4.  Limitations Upon Acts of Employee. Employee agrees: (A) That Employee
         ---------------------------------
will not draw, accept or make any bill of exchange or promissory note for or on
behalf of the Employer; nor shall Employee otherwise pledge the credit of the
Employer, nor execute or deliver any contracts or documents for or on behalf of
the Employer, except to the extent of the Employer's written policies consented
to by its General Partner.

         (B) That Employee will make available when requested such information
and fully advise the Employer, of all matters in which Employee shall become
involved, and acts which Employee shall perform, for or on the account of the
Employer; and that Employee shall also promptly inform the Employer of any
matters coming to Employee's attention or knowledge that may materially affect
the interests of the Employer, or its business operations.

         (C) The policies of operation of the business of the Employer shall,
from time to time, be determined by the Employer or by its General Partner; and
the Employee agrees to conform to and execute all reasonable policies of
Employer as so determined.
<PAGE>
 
     5.  Termination of Employment.
         ------------------------- 
         
         The Employer shall have the right to cancel and terminate this
Agreement, and to discharge the Employee for "good cause", or, after Employment
Year 1, without cause upon seven (7) days' prior written notice to Employee. For
purposes of this Article 5, "good cause" shall be construed to mean proven
dishonesty in a material matter, habitual intoxication, continued and repeated
failure to devote proper time and attention to the business of the Employer,
repeated failure (after receipt of written notice from Employer and reasonable
opportunity to cure) by Employee to carry out the reasonable directions and
instructions of the Employer or its General Partner, conviction of a crime
involving moral turpitude or requiring imprisonment of Employee, repeated and
unexcused absenteeism after reasonable notice from Employer, death of the
Employee, or the material breach by Employee of any of Employee's obligations or
agreements contained in Sections 7 or 8 below, or the making of any
representation or warranty pursuant to Article 6 hereinbelow which shall prove
to be inaccurate, incorrect or false in any respect. Upon termination of
Employee's employment by Employer without cause, the Employer agrees to pay
Employee as severance pay and in full and final settlement all claims between
the parties (excluding any claim by Employee for wages or other compensation
previously earned and fully vested and not paid) an amount equal to nine (9)
months of the base salary of Employee thereafter.

     6.  Employee's Representations.
         ---------------------------

         Employee hereby represents and warrants to Employer that there are not
now operative and in force any employment agreements or other instruments of any
nature, to which Employee is a party or under which Employee may be otherwise
bound or subject, which contain any terms or provisions that in any manner
restrict, limit, prevent, prohibit or make unlawful the execution of Employee of
this Agreement, or the performance by Employee of any or all of Employee's
obligations, covenants and duties herein specified, or Employee's employment by
Employer hereunder or otherwise. In the event the representatives and warranties
made by Employee under this Article 6 should prove to be inaccurate, incorrect
or false in any respect, whether through inadvertence or willful
misrepresentation by Employee, Employer may, at its option, upon discovering
such inaccuracy or the falsity of said representations, terminate this Agreement
for good cause and Employee's employment hereunder.

     7.  Trade Secrets.
         --------------

         The Employee agrees that during the term of employment with the
Employer and at all times after expiration thereof, Employee will not
communicate or divulge, for the benefit of any competitor, rival or other
person, firm, association, or corporation, whether associated with the Employee
or not, any trade secrets, client lists, employee information or any other
confidential information or material matters of any nature relating to the
business of affairs of the Employer, which may be utilized by Employer in or
about its business and which trade secrets, information or other matters are
communicated or otherwise become known to the Employee by reason of Employee's
employment hereunder, or otherwise. This provision shall expressly survive any
termination or other expiration of this Agreement.
<PAGE>
 
     8.  Agreement Not to Compete.
         -------------------------

         Employee acknowledges that the services to be rendered hereunder are of
a special and unusual character which have a unique value to the Employer, the
loss of which cannot adequately be compensated by damages in an action at law.
Because of the unique value to the Employer of the services of Employee for
which the Employer has contracted hereunder, and because of the confidential
information to be obtained by Employee, as aforesaid, Employee agrees and
covenants as follows:

         (A)    Employee agrees that after Employee ceases to be employed by the
Employer, Employee will not, directly or indirectly, for a period of twenty-four
(24) months next following such cessation of employment, solicit business from,
divert business from, or attempt to convert to other methods of performing
functions related to the services provided by the Employer, any client, account
or customer of the Employer which for purposes hereof shall be defined as
client, account or customer having done business with the Employer on a sole
supplier basis at any time during the one (1) year period immediately preceding
the date of the cessation of Employee's employment by the Employer.

         (B)    Employee agrees that for a period of twenty-four (24) months 
after Employee ceases to be employed by the Employer, Employee will not,
directly or indirectly, solicit for employment or employ for Employee's own or
for another's benefit any employee of the Employer.

     9.  Injunction.
         -----------

         Should the Employee engage in or perform, either directly or
indirectly, any of the acts prohibited in Articles 7 and 8 hereof, it is agreed
that the Employer shall be entitled to recover any damages incurred by it as a
result of such engagement or violation by Employee in an action at law, and to
full injunctive relief, to be issued by any competent court of equity, enjoining
and restraining the Employee and each and every person, firm, organization,
association, or corporation concerned therein, from the continuance of such
violative acts. The provisions of this Article 9 and or Article 8 above shall
expressly survive any termination or other expiration of this Agreement.

     10. Non-Assignability.
         ----------------- 

         The Employee shall have no right to assign this Agreement, or any of
his or her rights or obligations hereunder, to another party or parties.
Employer shall have the right to assign this Agreement to any successor entity
provided that such entity agrees to assume all of Employer's obligations
hereunder.

     11. Law Applicable.
         ---------------

         This Agreement shall be construed in accordance with the laws of the
District of Columbia.
<PAGE>
 
     12. Non-Waiver of Breach.
         ---------------------

         No waiver by the Employer of any breach of any covenant or obligation
hereof on the part of the Employee to be kept and performed shall be considered
to be a waiver of any such covenant or provision, or of any future breach
thereof.

     13. Arbitration.
         ----------- 

         Except as herein otherwise provided, any claim or controversy arising
out of or relating to this Agreement or any breach hereof shall, upon the
request of either the Employer or Employee, be submitted to and settled by
arbitration in accordance with the rules of the American Arbitration Association
then in effect. Any decision made pursuant to such arbitration shall be binding
and conclusive upon the Employer and the Employee and judgment upon such
decision may be entered in any court having jurisdiction thereof. This Section
13 shall not apply with respect to any breach or threatened breach of Section 7
or 8.

     14. Entire Agreement.
         -----------------

         This instrument contains all of the agreements and understandings
between the parties hereto with respect to the employment of the Employee by the
Employer, and no oral agreements or written correspondence shall be held to
affect the provisions hereof and shall be binding upon Employer's successors and
assigns. All subsequent changes and modifications, to be valid, shall be by
written instrument executed by the Employer and the Employee.

     IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed
on its behalf by its duly authorized officers and the Employee has hereunto set
his hand and seal, all done on the day and in the year first hereinabove
written.

                                   EMPLOYER:
                                   -------- 

 ATTEST:                           CAIS, INC.

 
   /s/ William M. Caldwell, IV     By: /s/ Ulysses G. Auger, II  (SEAL)
 -----------------------------         --------------------------       
                                   Name: Ulysses G. Auger, II
                                   Title: Chief Executive Officer
 
                                   EMPLOYEE:
                                   -------- 

 
                                   /s/ Evans K. Anderson      (SEAL)
                                   ---------------------------       
                                   Evans K. Anderson
<PAGE>
 
                                  EXHIBIT "A"
                                  -----------
                                 COMPENSATION
                                 ------------

     1.  Base Compensation.  During the term of the Agreement, Employee shall
         -----------------                                                   
receive a base salary of $125,000.00 per Employment Year, and beginning November
1, 1997, and thereafter, shall receive a base salary of $150,000.00 per
Employment Year. Base salary shall be paid during an Employment Year in twenty-
six (26) equal installments, less applicable social security and withholding
taxes.  Employee's base salary will be subject to such periodic increases as may
be determined by the Employer.

     2.  Employee Benefits.  Employer shall reimburse Employee for all expenses
         -----------------                                                     
reasonably incurred by him in the performance of his duties hereunder, with such
reimbursement to be made upon submission by Employee of itemized statements and
receipts in form reasonably satisfactory to Employer.  Employee shall be
entitled to such amount of vacation as is normal and usual for an executive of
his position with the Employer and shall be eligible to participate in all
hospitalization, 401k Plan, insurance and other employee benefit plans for non-
union executive employees which may be maintained wholly or partially funded by
Employer.

     3.  Equity Incentive Compensation.
         ------------------------------
 
         (A)    Option to Acquire Equity Interest.
 
                (1)   Subject to the vesting and forfeiture provisions set forth
below, as an inducement to entering into this Agreement, Employee is hereby
granted an option to purchase: (1) a limited partnership interest in CAIS
Limited Partnership equal to 3% of the total limited partnership interest in
CAIS Limited Partnership and a limited partnership interest in Cleartel
Communications Limited Partnership equal to 3% of the total limited partnership
interest in Cleartel Communications Limited Partnership, or, in the event that
Cleartel and CAIS are combined into a single successor entity ("CGX"), (2) a
limited partnership/stock interest (as applicable) in CGX equal to 3% of the
total limited partnership/stock interest in CGX. Such 3% interest, subject to
adjustment as provided in sections 3(A)(2), below, shall hereafter be referred
to as the Target Equity Percentage ("TEP"). The purchase price for the TEP
limited partnership/stock interest shall be three hundred sixty thousand Dollars
($360,000). The option is exercisable by Employee (or his Estate) in whole (but
not in part) by written notice to Employer at any time after the date hereof,
provided that at the time of exercise the Employee is an employee of the
Employer (or the Employee was an employee of the Employer at the time of his
death). Such limited partnership/stock interest(s) shall be issued to Employee
subject to the terms and conditions of limited partnership/shareholders (as
applicable) agreement(s) on terms no less favorable than those enjoyed by other
limited partners/stockholders (as applicable) of CAIS Limited Partnership and
Cleartel Communications Limited Partnership or of CGX under such limited
partnership/shareholders (as applicable) agreement(s).

                (2)   Adjustment of TEP - Acquisition/Merger/Capital Investment.
The parties further agree that in the event and to the extent CAIS/Cleartel or
CGX is acquired by, merges with or is otherwise combined with another entity
that is not controlled by the parties that 
<PAGE>
 
currently control the equity of CAIS and Cleartel, or receives outside capital
investment through a private placement and/or public offering of the stock or
debt instrument of CAIS/Cleartel or CGX, or the stock or debt instrument of any
successor entity, then thereafter Employee's TEP limited partnership/stock
interest (and his option to purchase same, if not previously exercised) will be
reduced on the same basis and in the same proportions as all other
shareholders/limited partners except as otherwise provided elsewhere in this
Agreement.

         (B)    Vesting and Forfeiture of Equity Interest.
                ----------------------------------------- 

                (1)   Normal Vesting.

                      a.   The first 1% limited partnership/stock interest shall
become fully vested at the end of Employment Year 3 provided that Employee then
remains employed by the Employer. Except as provided otherwise herein, should
Employee not remain employed by the Employer at the end of Employment Year 3,
the Employer shall have the right and option to reacquire from Employee and
Employee shall be obligated to sell to the Employer all non-vested TEP limited
partnership/stock interest previously acquired by the Employee upon payment to
Employee of an amount equal to the Purchase Price paid by Employee for such
interest.

                      b.   The remaining 2% limited partnership/stock interest
shall become fully vested at the end of Employment Year 4 provided that Employee
then remains employed by the Employer. Except as provided otherwise herein,
should Employee not remain employed by the Employer at the end of Employment
Year 4, the Employer shall have the right and option to reacquire from Employee
and Employee shall be obligated to sell to the Employer all non-vested TEP
limited partnership/stock interest previously acquired by the Employee upon
payment to Employee of an amount equal to the Purchase Price paid by Employee
for such interest.

                (2)  Accelerated Vesting.

                     If, prior to the vesting dates set forth in subparagraph
3(B)(1), a merger or a sale of substantially all of CAIS/Cleartel's or CGX's
assets occurs that results in the removal of current management or a change of
ownership control of CAIS from current ownership control, then the vesting of
Employee's TEP limited partnership/stock interest 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 CAIS, Cleartel or CGX occurs prior to the end of Employment Year 3, and
provided that Employee then remains employed by the Employer, then the first 1%
limited partnership/stock interest shall vest one day prior to the first date of
such Initial Public Offering, and the remaining 2% limited partnership/stock
interest 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.
<PAGE>
 
                (3)  Employee's rights with respect to any non-vested portion of
any TEP limited partnership/stock interest previously purchased pursuant to the
option granted herein, shall immediately terminate upon termination of
Employee's employment hereunder for any reason other than the following
circumstance:

                     If, during Employment Year 1, prior to full vesting,
Employee is terminated by Employer for a reason other than for good cause, then
in such event any non-vested portion of Employee's TEP limited partnership/stock
interest shall thereupon be and be deemed to be fully vested.

                     If, subsequent to the End of Employment Year 1 but prior
to the end of Employment Year 4, and prior to full vesting of Employee's TEP
limited partnership/stock interest Employee is terminated by Employer for a
reason other than for good cause, or (ii) for performance where Employee's
performance, through the date of Employee's notice of termination to Employer,
has been below 60% of the actual budgeted Performance Target for revenue growth
(pro-rated as appropriate), then in either such event any non-vested portion of
Employee's TEP limited partnership/stock interest shall thereupon be and be
deemed to be fully vested.

                (4)  Upon request by Employer, Employee shall execute
amendment(s) to Employer's limited partnership agreement or shareholders
agreement(s), as applicable, containing such reasonable terms and conditions as
may be required by the Employer, and on terms no less favorable than those
enjoyed by other limited partners/stockholders under such agreement(s).

                (5)  Within the above parameters, the parties agree to cooperate
to structure the conferral, vesting and forfeiture provisions with respect to
Employee's limited partnership/stock interest, so as to minimize the federal
income tax consequences to both the Employer and Employee of such provisions.

         (C)    Purchase of Employee's Vested Partnership/Stock Interest in the
                ---------------------------------------------------------------
Event of Termination of Employment Where Employer has Remained a Privately Held
-------------------------------------------------------------------------------
Limited Partnership or Corporation.
----------------------------------     

                (1)  Upon Employee's termination of employment with Employer for
any reason (including without limitation, termination upon expiration of the
term hereof), other than death of Employee, and provided that the Employer at
the time of such termination remains a privately held limited partnership or
corporation, the Employer shall have the option, but not the obligation, to
purchase, and Employee shall be obligated upon exercise of such option by the
Employer, to sell, all of the Employee's limited partnership/stock interests in
the Employer, if any, theretofore earned by Employee pursuant to the terms of
this Agreement and fully vested in Employee after consideration of subparagraph
3(B)(5) above. The purchase price of such partnership/stock interest shall equal
Employee's Proportionate Share (defined below) of the Incremental Value (defined
below) of the Employer. For purposes hereof, the term "Employee's Proportionate
Share" shall mean and refer to the percentage of limited partnership/stock
interest which has been earned by Employee and fully vested under the terms of
this Agreement as of the 
<PAGE>
 
date of Employee's termination of employment. The term "Incremental Value" shall
mean the positive difference between (a) the Employer's net worth as of the last
day of the Employer's fiscal year immediately preceding Employee's commencement
of employment hereunder, and (b) the Employer's net worth as of the last day of
the Employer's fiscal year immediately preceding Employee's termination of
employment with Employer. For purposes of this provision, the determination of
Employer's outside accountant as to the Employer's net worth shall be binding on
both parties. The purchase price, as so determined, shall be paid in cash at the
time of transfer and assignment of the limited partnership interests. Closing on
such purchase shall occur on a date designated in writing by Employer to the
Employee which date must be within twelve (12) months after the termination of
Employee's employment hereunder.

                (2)  Upon Employee's termination of employment with Employer due
to the death of Employee, and provided that Employer at the time of such
termination remains a privately held limited partnership or corporation,
Employer shall have the option, but not the obligation, to purchase, and the
executor, administrator or personal representative of the deceased Employee
shall be obligated upon exercise of such option by the Employer, to sell, all of
the Employee's limited partnership/stock interests in the Employer, if any,
theretofore earned by Employee pursuant to the terms of this Agreement and fully
vested in Employee. The purchase price of such partnership/stock interests shall
equal Employee's Proportionate Share of the Incremental Value of the Employer
(as such terms are defined above). The purchase price, as so determined, shall
be paid in cash at the time of transfer and assignment of the limited
partnership/stock interests. Closing on such purchase shall occur on a date
designated in writing by Employer to the executor, administrator or personal
representative of the deceased Employee, which date must be within twelve (12)
months after the date of Employee's death.
<PAGE>
    

                                                                     Exhibit B

                            STOCK OPTION AGREEMENT
                            ----------------------

     THIS STOCK OPTION AGREEMENT made as of the 2nd day of October, 1998, by and
between CGX COMMUNICATIONS, INC., (hereinafter referred to as the "Employer" or
the "Corporation"), and EVANS K. ANDERSON (hereinafter referred to as the
"Employee").

               WITNESSETH:

     WHEREAS, the Employer is engaged, inter alia, in the business of providing
                                       -----------                             
Internet services and related activities and operations throughout the United
States of America; and

     WHEREAS, the Employee is an employee of the Employer; and

     WHEREAS, the Employer desires to grant to the Employee the opportunity to
purchase shares of the Employer's common stock in accordance with the terms and
conditions set forth below.

     NOW, THEREFORE, in consideration of the premises, which are incorporated
into and made part of this Agreement, and of the mutual covenants and agreements
herein contained, the parties hereby agree entirety as follows:

     1.  Stock Option.
         -------------

         (A)  Grant of Option.
              --------------- 

              Subject to the vesting and forfeiture provisions set forth below,
the Company hereby grants Employee an option to purchase (the "Option") all or
any part of a total of Three Hundred One Thousand Four Hundred Twenty (301,420)
shares of the Company's Common Stock (the "Option Shares") upon the terms and
conditions set forth herein. The purchase price of the Option Shares which
Employee elects to purchase under this Agreement shall be $1.1942 per share.
Employee shall, upon delivery to him of any Option Shares which he elects to
purchase hereunder, pay the Company the full purchase price for such Option
Shares on the date of exercise. The Option is exercisable in whole or in part by
written notice to Employer at any time after the date hereof, provided that at
the time of exercise the Employee is an employee of the Employer (or the
Employee was an employee of the Employer at the time of his death). Such Common
Stock shall be issued to Employee subject to the terms and conditions of any
shareholder agreement(s) generally applicable to the shareholders of the Company
on terms no less favorable than those enjoyed by other shareholders of the
Company under such shareholder agreement(s).

         (B)  Vesting and Forfeiture of Equity Interest.
              ----------------------------------------- 

              (1)    Normal Vesting.
                     -------------- 

                     a.  One-third (1/3) of the Option Shares shall become fully
vested at the end of Employment Year 3 provided that Employee then remains
employed by the Employer. For purposes hereof, the term "Employment Year" shall
mean and refer to each

<PAGE>
 
successive period of twelve calendar months commencing from and after the date
Employee first commenced employment with the Company (which employment shall
include any periods during which Employee was employed by CAIS, Inc.). Except as
provided otherwise herein, should Employee not remain employed by the Employer
at the end of Employment Year 3, the Employer shall have the right and option to
reacquire from Employee and Employee shall be obligated to sell to the Employer
all non-vested Option Shares previously acquired by the Employee upon payment to
Employee of an amount equal to the Purchase Price paid by Employee for such
Option Shares.

                    b.  The remaining two-thirds (2/3) of the Option Shares
shall become fully vested at the end of Employment Year 4 provided that Employee
then remains employed by the Employer. Except as provided otherwise herein,
should Employee not remain employed by the Employer at the end of Employment
Year 4, the Employer shall have the right and option to reacquire from Employee
and Employee shall be obligated to sell to the Employer all non-vested Option
Shares previously acquired by the Employee upon payment to Employee of an amount
equal to the Purchase Price paid by Employee for such Option Shares.

               (2)  Accelerated Vesting.

                    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
Employee's 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 3, and provided that Employee then remains
employed by the Employer, then one-third (1/3) of the Option Shares shall vest
one day prior to the first date of such Initial Public Offering, and the
remaining two-thirds (2/3) 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 Option Shares shall be forfeited and revert back to the
Employer.

               (3)  Employee's rights with respect to any non-vested portion of
any Option Shares previously purchased pursuant to the option granted herein,
shall immediately terminate upon termination of Employee's employment hereunder
for any reason other than the following circumstance:

                    If, during Employment Year 1, prior to full vesting,
Employee is terminated by Employer for a reason other than for good cause, then
in such event any non-vested portion of the Option Shares shall thereupon be and
be deemed to be fully vested.

                    If, subsequent to the End of Employment Year 1 but prior to
the end of Employment Year 4, and prior to full vesting of Employee's Option
Shares, Employee is terminated by Employer (i) for a reason other than for good
cause, or (ii) for performance where Employee's performance, through the date of
Employee's notice of termination to Employer, has not been below 60% of the
actual budgeted Performance Target for revenue growth (pro-rated as
appropriate), then in either such event any non-vested portion of the Option
Shares shall thereupon be and be deemed to be fully vested.

                                       2
<PAGE>
 
               (4)  Upon request by Employer, Employee shall execute
amendment(s) to Employer's shareholders agreement(s) containing such reasonable
terms and conditions as may be required by the Employer, and on terms no less
favorable than those enjoyed by other stockholders under such agreement(s).

               (5)  Within the above parameters, the parties agree to cooperate
to structure the conferral, vesting and forfeiture provisions with respect to
Employee's Option Shares, so as to minimize the federal income tax consequences
to both the Employer and Employee of such provisions.

          (C)  Purchase of Employee's Vested Option Shares in the Event of
               -----------------------------------------------------------
Termination of Employment Where Employer has Remained a Privately Held
----------------------------------------------------------------------
Corporation.
----------- 

               (1)  Upon Employee's termination of employment with Employer for
any reason (including without limitation, termination upon expiration of the
term hereof), other than death of Employee, and provided that the Employer at
the time of such termination remains a privately held corporation, the Employer
shall have the option, but not the obligation, to purchase, and Employee shall
be obligated upon exercise of such option by the Employer, to sell, all of the
Employee's Option Shares in the Employer, if any, theretofore acquired by
Employee pursuant to the terms of this Agreement and fully vested in Employee
after consideration of subparagraph 1(B)(5) above. The purchase price of such
Option Shares shall equal Employee's Proportionate Share (defined below) of the
Incremental Value (defined below) of the Employer. For purposes hereof, the term
"Employee's Proportionate Share" shall mean and refer to the percentage that (a)
the number Option Shares which has been acquired by Employee and fully vested
under the terms of this Agreement as of the date of Employee's termination of
employment, bears to (b) the total number of shares of Common Stock of the
Company issued and outstanding as of such date. The term "Incremental Value"
shall mean the positive difference between (a) the Employer's net worth as of
the last day of the Employer's fiscal year immediately preceding Employment Year
1, and (b) the Employer's net worth as of the last day of the Employer's fiscal
year immediately preceding Employee's termination of employment with Employer.
For purposes of this provision, the determination of Employer's outside
accountant as to the Employer's net worth shall be binding on both parties. The
purchase price, as so determined, shall be paid in cash at the time of transfer
and assignment to the Company of the Option Shares. Closing on such purchase
shall occur on a date designated in writing by Employer to the Employee which
date must be within twelve (12) months after the termination of Employee's
employment hereunder.

               (2)  Upon Employee's termination of employment with Employer due
to the death of Employee, and provided that Employer at the time of such
termination remains a privately held corporation, Employer shall have the
option, but not the obligation, to purchase, and the executor, administrator or
personal representative of the deceased Employee shall be obligated upon
exercise of such option by the Employer, to sell, all of the Employee's Option
Shares previously exercised by the Employee, and fully vested in Employee. The
purchase price of such Option Shares shall equal Employee's Proportionate Share
of the Incremental Value of the Employer (as such terms are defined above). The
purchase price, as so determined, shall be paid in cash at the time of transfer
and assignment to the Company of the Option Shares. Closing on 

                                       3
<PAGE>
 
such purchase shall occur on a date designated in writing by Employer to the
executor, administrator or personal representative of the deceased Employee,
which date must be within twelve (12) months after the date of Employee's death.

     2.  Non-Assignability.
         ----------------- 

         The Employee shall have no right to assign this Agreement, or any of
his or her rights or obligations hereunder, to another party or parties.  The
Option granted hereunder is not assignable by operation of law or subject to
execution, attachment or similar process.  Employer shall have the right to
assign this Agreement to any successor entity provided that such entity agrees
to assume all of Employer's obligations hereunder.

     3.  Law Applicable.
         ---------------

         This Agreement shall be construed in accordance with the laws of the
District of Columbia.


     4.  Compliance with Securities Laws.
         ------------------------------- 

         Unless a registration statement under the Securities Act of 1933 is
then in effect with respect to the Option Shares the Employee may receive upon
the exercise of his Option, the Employee agrees to acquire such Option Shares
for investment and not for resale or distribution, and further consents to such
other agreements as the Company, in its discretion, may deem necessary to comply
with the requirements of the Securities Act of 1933 or any applicable state
securities laws. The Employee acknowledges that the Company has no obligation to
file a registration statement with respect to any of the Option Shares.

     5.  Entire Agreement.
         -----------------

         This instrument contains all of the agreements and understandings
between the parties hereto with respect to the employment of the Employee by the
Employer, and no oral agreements or written correspondence shall be held to
affect the provisions hereof and shall be binding upon Employer's successors and
assigns. All subsequent changes and modifications, to be valid, shall be by
written instrument executed by the Employer and the Employee.

                                       4
<PAGE>
 
     IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed
on its behalf by its duly authorized officers and the Employee has hereunto set
his hand and seal, all done on the day and in the year first hereinabove
written.

                              EMPLOYER:
                              -------- 

ATTEST:                       CGX COMMUNICATIONS, INC.

/s/ William M. Caldwell, IV   By: /s/ Ulysses G. Auger, II
-------------------------        -----------------------------(SEAL)
                              Name:
                              Title:



                              EMPLOYEE:
                              -------- 
       
                              /s/ Evans K. Anderson
                              --------------------------------(SEAL)
                              Evans K. Anderson
     
                                       5


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 Evans K. Anderson (the "Employee"). RECITALS: -------- 1. The Company is party to a certain amended and restated employment agreement (the "Employment Agreement"), dated as of June 3, 1997 between CAIS, Inc., a Virginia corporation, and Employee. 2. The Company and the Employee are parties to a certain stock option agreement (the "Stock Option Agreement"), 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 Agreement 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 Agreement 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: "(A) The Employer does hereby employ the Employee in the capacity of Chief <PAGE> Operating Officer and Executive Vice President of Sales and Marketing, to manage the overall business interests of CAIS Internet, Inc., to manage the Employer's sales, to develop new business opportunities and to perform 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. ------------------------- 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. 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 Employee' s 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 3, and provided that Employee then remains employed by the Employer, then one-third (1/3) 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 two-thirds (2/3) 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 Option Shares shall be forfeited and revert back to the Employer." 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: <PAGE> "6. Expiration. ----------- 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] <PAGE> THE COMPANY: CAIS INTERNET, INC. By: /s/ Ulysses G. Auger, II ------------------------------- Ulysses G. Auger, II Chief Executive Officer EMPLOYEE: /s/ Evans K. Anderson _________________________________ Evans K. Anderson