Exhibit 10.29

 

Severance Agreement

 

1.               This agreement is entered into by Cogent Communications, Inc.
(“Cogent”) and the executive employee signing this Agreement, below
(“Executive”).

 

2.               As an inducement for Executive to focus his or her full efforts
on Cogent’s business without undue concern for future employment the
Compensation Committee of the Cogent Board of Directors has approved the
following minimum severance provisions for Executive.  This severance is not
intended to reduce any severance arrangement provided for in Executive’s offer
letter or other agreement.  In any case in which such offer letter or other
agreement provides a greater severance compensation with respect to cash payment
or continuation of benefits Executive shall receive the greater cash payment or
benefit.

 

3.               If Executive is terminated other than for Cause (as defined
below) or Executive terminates his or her employment for Good Reason (as defined
below), Executive shall continue to receive his or her salary (reduced by all
mandatory withholdings for taxes or other governmentally required payments such
as garnishments) for 3 months following the date of termination, i.e. Executive
shall be paid through the 91st day following the date of termination.  If such
termination follows the 5th anniversary of Executives employment by Cogent then
such payment shall be increased to 6 months salary, i.e. executive will be paid
through the 182nd day following the date of termination.  However, if the
termination follows a Change of Control (as defined below) such payment shall be
made as a lump sum within 5 days of termination. Salary means Executive’s salary
before voluntary withholdings and reductions (such as those for parking,
401(k) plan, medical, dental, and life insurance) and before mandatory
withholdings for taxes and other governmentally required payments such as
garnishments.  At the election of Executive, the employee share of the cost of
benefits (provided in paragraph 4) may be paid through a salary reduction
agreement (in order to make such payments with pre-tax income).  If the amount
payable under this paragraph is less than the amount payable under Executive’s
offer letter or other agreement no payment shall be made under this paragraph
and Executive shall instead receive the payment provided for in the offer letter
or other agreement.

 

4.               If Executive is terminated other than for Cause or Executive
terminates his or her employment for Good Reason, Executive shall continue to
receive through the last day of the sixth month following the month in which
termination occurs health insurance, dental insurance, life insurance (to the
extent paid by the company), and long term disability insurance.  Cogent shall
pay the company share of such benefits and Executive shall pay the employee
share, e.g. the employee portion of the premium for health and dental
insurance.  The employee share and company share shall be the same as currently
applicable to the benefits at the time of termination.  If the value of the
benefit under this paragraph is less than the benefit under Executive’s offer
letter or other agreement no benefit shall be provided under this paragraph and
Executive shall instead receive the benefit provided for in the offer letter or
other agreement.

 

5.               If Executive is terminated other than for Cause in conjunction
with or within 90 days following a Change of Control, Executive shall on the
date of notification of such termination become fully vested in any restricted
stock, options, or other similar incentive plan involving vesting.

 

6.               For purposes of this agreement, Cogent shall have “Cause” to
terminate the Executive’s employment hereunder (i) upon the Executive’s
conviction for the commission of an act or acts constituting a felony under the
laws of the United States or any state thereof, or (ii) upon the Executive’s
willful and continued failure to substantially perform his or her duties
hereunder (other than any such failure resulting from the Executive’s incapacity
due to physical or mental illness), after written notice has been delivered to
the Executive by Cogent, which notice specifically identifies the manner in
which the Executive has not substantially performed his duties, and the
Executive’s failure to substantially perform his duties is not cured within ten
(10) business days after notice of such failure has been given to the Executive.
No act or failure to act on the Executive’s part shall be deemed “willful”
unless done or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive’s act, or failure to act, was in
the best interest of Cogent.

 

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7.               “Good Reason” shall mean the occurrence (without the
Executive’s express written consent) of any one of the following:

 

a.               the assignment to Executive of duties inconsistent with the
Executive’s status as a senior executive officer of the Company or a substantial
adverse alteration in the nature or status of the Executive’s responsibilities;
or

 

b.              if Executive is an attorney, resignation required by any
applicable law, regulation, rule, or code of professional responsibility; or

 

c.               a reduction in Executive’s salary; or

 

d.              relocation of Executive’s principal place of employment outside
of the Washington, DC area.

 

8.               “Change of Control” shall mean any of the following: (i) a
consolidation, merger or reorganization of Cogent Communications Group, Inc.
with or into any other corporation or corporations in which the stockholders of
Cogent Communications Group, Inc. immediately before such event shall own fifty
percent (50%) or less (calculated on an as converted basis, fully diluted) of
the voting securities of the surviving corporation; (ii) a transaction or series
of related transactions, other than an underwritten public offering, in which at
least fifty percent (50%) of Cogent Communications Group, Inc.’s voting power is
transferred; (iii) the sale, transfer or lease of all or substantially all of
the assets of Cogent Communications Group, Inc.; (iv) the acquisition of shares
of capital stock of Cogent Communications Group, Inc. (whether through a direct
issuance by Cogent Communications Group, Inc., negotiated stock purchase, a
tender for such shares, merger, consolidation or otherwise) by any party or
group that did not beneficially own a majority of the voting power of the
outstanding shares of capital stock of Cogent Communications Group, Inc.
immediately prior to such purchase, the effect of which is that such party or
group beneficially owns at least a majority of such voting power immediately
after such event; or (v) the consummation by Cogent Communications Group, Inc.
of a plan of complete liquidation of Cogent Communications Group, Inc..

 

9.               Executive’s continued employment shall not constitute consent
to, or a waiver of rights with respect to any act or failure to act constituting
Good Reason hereunder. Notwithstanding the foregoing, a termination shall not be
treated as a Termination for Good Reason if the Executive shall have consented
in writing to the occurrence of the event giving rise to the claim of
Termination for Good Reason.

 

10.         Executive shall be entitled to the indemnification set forth in the
certificate of organization of any entity for which he or she performs services
to the maximum extent permitted by law.  Executive shall also be entitled to the
protection of any insurance policies Cogent may elect to maintain generally for
the benefit of its directors and officers.

 

11.         Executive agrees that he or she remains an employee at will whose
employment may be terminated at any time with or without cause.

 

12.         Cogent agrees that Executive is giving consideration for this
agreement by relying upon its provisions in determining whether or not to seek
other employment.

 

Accepted and agreed to:

 

Cogent Communications, Inc.

 

Executive

 

 

 

 

 

 

 

 

 

 

By:

/s/David Schaeffer

 

 

/s/Timothy G. O’Neill

Name:

David Schaeffer

 

Name:

Timothy G. O’Neill

Title:

CEO

 

Date:

9/16/03

Date:

9/25/03

 

 

 

 

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