Offer of Employment Letter - CAIS Internet Inc. and Amit Rikhy
March 15, 2001
Mr. Amit Rikhy
4413 Torrey Pines Drive
Chino Hills, California 91709
Dear Amit:
Cais Internet, Inc. ("CAIS", or the "company") is pleased to extend to you an
offer of employment as Senior Vice President of Strategic Planning ("SVP,
Strategic Planning"), 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 business development
functions of CAIS, including significant participation in developing
financial strategies, assisting in the contemplated recapitalization
of the company, and generally working closely with the CEO to create a
financially successful enterprise. Your full-time employment with CAIS
will commence on March 19, 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, Strategic Planning:
A. Base Salary. Your base salary will be $225,000 per year, payable
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in 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 ranging
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from 0% to 50% of your base salary, with the maximum targeted
bonus equal to 50% 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. Within your first year of employment,
$50,000 of this bonus will be guaranteed and payable in equal
quarterly installments (upon the close of each of the company's
fiscal quarters, beginning with the close of the second quarter of
fiscal year 2001) (the "Guaranteed Bonus"). Also, to the extent
that your performance, and that of the company's, exceeds mutually
agreed upon goals and objectives, the Board will consider, in its
sole discretion, the payment to you of additional "out-
performance" bonus amounts. With the exception of the Guaranteed
Bonus, any additional bonus amounts will be paid subsequent to
each fiscal year end, in accordance
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with CAIS' normal practice of paying annual bonuses. With the
exception of the Guaranteed Bonus, any additional 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 $40,000, with such bonus to be paid to you within five
business days after your commencement of your duties as SVP,
Strategic Planning.
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. Additionally, premiums for
medical, dental, and vision coverages, and any premiums for life
insurance coverages, will be paid by CAIS, subject to required
employee deductibles, exclusions, co-payments, and waiting
periods.
E. Vacation. You will receive four 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 eighth anniversary of the
date the options are granted.
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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. At the sole discretion of the Board, this relocation
date may be extended. 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 the Los Angeles, California
area, 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).
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. If for any
reason you terminate your employment with CAIS within the first 24
months of employment, except in the case that your duties, title, or
compensation have been materially reduced during this twenty four month
period, you agree to reimburse CAIS for all such expenses on a pro rata
basis, based upon 24 months less the number of months that you were
actually employed by CAIS.
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, under either current ownership or a successor
owner of 50% or more, you will be entitled to payment, in equal
installments over 12 months, of an amount equal to one times your then
base salary, plus a lump sum payment equal to your Target Bonus, 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, with this covenant
being specific to the regions and specific product offerings being
provided by CAIS, and by a covenant not to raid its customers, clients,
or employees.
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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. Amit, we are excited that you have accepted our offer of employment and we
look forward to having you on the CAIS team.
Sincerely,
William M. Caldwell, IV
President and Chief Executive Officer
Accepted and Agreed this ___ day of ______________, 2001:
______________________
Amit Rikhy
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