Employment Agreement - CAIS Internet Inc. and Peter Benedict
March 27, 2001
Mr. Peter Benedict
20 Monmouth Parkway
Monmouth Beach, NJ 07750
Dear Peter:
Cais Internet, Inc. ("CAIS", or the "company") is pleased to extend to you an
offer of employment as Senior Vice President of Marketing ("SVP, Marketing"),
subject to a satisfactory background check and approval by the board of
directors of CAIS (the "Board"), on the following terms and conditions:
1. You will report to the Chief Executive Officer (the "CEO"). Your principal
duties will consist of managing the public relations, communications, and
brand marketing functions of the company, as well as such other tasks
assigned to you by the CEO to create a financially successful enterprise.
Your full-time employment with CAIS will commence on April 2, 2001.
2. In consideration of your performance of the above duties you will receive
compensation as follows, so long as you are in the employ of CAIS as its
SVP, Marketing:
A. Base Salary. Your base salary will be $225,000 per year, payable in
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accordance with CAIS' normal payroll practices. You will be eligible
for annual salary reviews and adjustments, based on performance and
at the discretion of the Board.
B. Annual Bonus. You will be eligible for an annual bonus of up to 50%
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of your base salary, (the "Target Bonus"), based upon CAIS'
performance and the achievement of individual and company goals and
objectives, as mutually and reasonably agreed upon by you and the
Board. Any bonus amounts will be paid subsequent to each fiscal year
end, in accordance with CAIS' normal practice of paying annual
bonuses. Any bonus amounts payable in respect of your first year of
employment will be prorated based on that portion of fiscal year
2001 for which you are employed. Also, with respect to any annual
bonuses, you must be in the employ of CAIS at the time such bonuses
are paid to receive any applicable bonus otherwise payable in
respect of the preceding fiscal year.
C. Signing Bonus. Upon your acceptance of the terms of this offer,
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evidenced by your signature below, and upon approval by the Board of
such terms, you will be eligible to receive a one time signing bonus
of $30,000, with such bonus to be paid to you within five business
days after your commencement of your duties as SVP, Marketing.
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D. Benefits. Generally, you will be provided employee benefits
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commensurate with benefits provided to other CAIS employees in
executive positions, including, to the extent that CAIS offers a
401(k) plan, participation in this plan in accordance with the
company's participation policies.
E. Vacation. You will receive three weeks paid vacation during each
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year following your commencement of employment with CAIS. You shall
be eligible to take any accrued vacation following your first six
months of employment with CAIS.
F. Incentive Equity. You understand that CAIS is attempting to
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recapitalize its operations, and in conjunction with such attempts
to recapitalize (the completion and certainty of which cannot be
guaranteed), CAIS intends to provide you with stock options in the
recapitalized company. If and when a successful recapitalization of
the company occurs, and to the extent you are employed by the
company at that time, you will receive options to purchase six
tenths of one percent (0.6%) of the shares of common stock of the
company (the "Common Stock"), on a fully diluted basis at such time.
These options will vest in equal quarterly installments over a four-
year period. Upon the occurrence of a change of control of 50% or
more of the fully diluted ownership of the company (a "Change of
Control"), or upon termination of your employment by the company
without cause, vesting of these options will accelerate and the
options will immediately become 100% vested and exercisable,
provided that, in the event of a Change of Control, you must
continue to be employed with the company through such triggering
event.
G. Performance Based Incentive Equity. In addition to the incentive
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equity described in Paragraph F above, and also subject to the
successful recapitalization of the company, additional options equal
to up to four tenths of one percent (0.4%) of the Common Stock, on a
fully diluted basis at such time, subject to you and the company
meeting certain performance objectives to be determined by the
Board. If granted, these performance based options would be vested
and fully exercisable upon the earlier to occur of a) a Change of
Control, b) termination of your employment by the company without
cause and c) the fourth anniversary of the date the options are
granted.
The terms and conditions of your stock options described in Sections
F and G above will be similar to those of options held by other CAIS
managers in executive positions, and will be governed by the
definitive option agreement to be entered into by and between you
and CAIS. Please note that CAIS' financial structure and future
capitalization is uncertain at this time, and therefore this offer
is a good faith attempt to outline our present incentive
compensation intentions and cannot be relied upon as a guarantee of
the grant of any stock-based awards in the event no recapitalization
occurs.
3. You have agreed to relocate to the Washington, D.C. area no later than
December 31, 2001. Upon relocation to the Washington, D.C. area, CAIS will
pay, or will reimburse you for, your actual, reasonable, out-of-pocket
moving expenses from your home in New Jersey,, including such reasonable
costs associated with moving, storage, and up to 90 days of temporary
housing. During such period when you may utilize temporary housing, you will
be responsible for all incidental charges associated with your stay in
temporary housing (e.g., telephone charges, meals, dry cleaning, etc).
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Until such time as you relocate, CAIS will also reimburse you for the
reasonable travel costs associated with assuming your new responsibilities,
including such reasonable costs associated with airfare, housing, meals, and
car rental. All moving and relocation expenses must be pre-approved in
advance by CAIS. Detailed receipts and proof of payment must also be
submitted for reimbursement.
4. This offer does not constitute an agreement of guaranteed employment for any
specific term. Your employment with CAIS is "at will," and may be terminated
by you or by us at any time, provided, however, that you may only terminate
your employment following thirty (30) days advanced written notice to the
company of such termination (which notice requirement may be waived by
CAIS). If your employment is terminated without cause by CAIS, you will be
entitled to payment, in equal installments over 12 months, of an amount
equal to one times your then base salary, on a pro rata basis, based upon 12
months less the number of months that you were actually employed by CAIS
during the fiscal year in which your employment is terminated, payable at
such time as annual bonuses are normally paid.
5. You also agree to be bound by a covenant not to disclose confidential
information of the company and its affiliates (other than as required by a
court of competent jurisdiction or with the consent of the Board) at all
times during and after your employment with CAIS. For one year after
termination of your employment with CAIS, you also agree to be bound by a
covenant not to compete with the company and by a covenant not to raid its
customers, clients, or employees.
To document your acceptance of the above terms, please sign and date the
enclosed copy of this letter where indicated below and return the signed copy to
me. Peter, we are excited that you have accepted our offer of employment and we
look forward to having you on the CAIS team.
CAIS Internet, Inc.
By: /s/ Michael J. Lee
Member, Board of Directors
Accepted and Agreed this 29 day of March, 2001:
/s/ Peter Benedict
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Peter Benedict
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