1
EXHIBIT 10(l)(xxiii)
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of January 3, 1997, between LCI
International Management Services, Inc., a Delaware corporation (the
"Company"), and Xxxx X. Xxxxxxxx ("Executive").
WHEREAS, Executive and the Company desire to embody in this Agreement the terms
and conditions under which Executive shall be employed by the Company.
NOW, THEREFORE, the parties hereby agree:
ARTICLE I: Employment, Duties and Responsibilities
1.01 Employment. The Company hereby employs Executive as Senior Vice
President of the Company and President of Local Services Division,
effective as of the date of this Agreement. Executive hereby accepts
such employment commencing on January 3, 1997.
1.02 Duties and Responsibilities. Executive shall have such duties and
responsibilities as are customarily associated with his position and
shall report to the Chief Executive Officer of the Company.
1.03 Base of Operation. Executive's principal base of operation for the
performance of her duties and responsibilities under this Agreement
shall be the offices of the Company currently located in McLean,
Virginia; provided, however, that Executive will perform such duties
and responsibilities at such places as shall from time to time be
reasonably necessary to fulfill her obligations hereunder.
ARTICLE II: Term
2.01 Term.
(a) The term of this Agreement (the "Term") shall commence
effective as of the date of this Agreement, shall continue for
an initial period of two years (the "Initial Term") and shall
continue for an additional two-year period (the "Second Term")
unless the Company provides written notice of termination to
the Executive at least 6 months before the end of the Initial
Term. This Agreement may also be terminated as provided in
Article V.
(b) Executive represents and warrants to the Company that, to the
best of her knowledge, neither the execution and delivery of
this Agreement nor the performance of her duties hereunder
violates or will violate the provisions of any other agreement
or obligation to which she is a party or by which she is
bound.
2
ARTICLE III: Compensation and Expenses
3.01 Salary, Bonuses and Benefits. As compensation and consideration for
the performance by Executive of her obligations under this Agreement,
Executive shall be entitled to the following (subject, in each case,
to the provisions of Article V hereof):
(a) The Company shall pay Executive a base salary during the Term,
payable in accordance with the normal payment procedures of the
Company and subject to such withholdings and other normal
employee deductions as may be required by law, at the rate of
Two Hundred Fifteen Thousand Dollars ($215,000) per year. The
Company agrees to review such compensation not less frequently
than annually during the Term.
(b) Executive shall be eligible to participate during the Term in
such life insurance, health, disability and medical insurance
benefits, and in such other employee benefit plans and programs,
other than severance, for the benefit of the employees of the
Company, as may be maintained from time to time during the Term,
in each case to the extent and in the manner available to other
senior executives of the Company and subject to the terms and
provisions of such plan or program.
(c) Executive shall be entitled to a four-week paid vacation period
(but not necessarily consecutive vacation weeks) during each
year of the Term.
(d) Executive shall participate during the Term in such stock
option, bonus and other executive compensation plans of the
Company as may be established from time to time for similarly
situated executives.
(e) Executive will participate in an executive compensation plan
(the "Plan") pursuant to which the Company will pay Executive a
quarterly cash bonus in an amount approved by the Compensation
Committee of the Company's Board of Directors and determined by
the Company's Chief Executive Officer. Executive will have an
individual minimum incentive target bonus under the Plan of
sixty-five percent (65%) of Executive's base salary, subject to
the terms and conditions of the Plan.
(f) The Company will issue Executive options to purchase One Hundred
and Twenty-Five Thousand (125,000) shares of its Common Stock
pursuant to its 1995/1996 Stock Option Plan (the "Initial
Options"). The exercise price of these options shall be the
average of the high and low trading price of the Company's
common stock on January 2, 1997. These options are contingent
upon the approval of the grant by the Company's Compensation
Committee and are subject to the following vesting: (i) 20%
will vest and become exercisable on the first anniversary of the
date of grant of the options, and (ii) the balance will vest and
become exercisable at the rate of 1.66% per month on the last
day of each month thereafter. Notwithstanding the foregoing
vesting schedule, all unvested Initial Options originally
granted will vest
2
3
and become immediately exercisable upon the occurrence of a
Change of Control (as hereinafter defined).
For the purpose of this Agreement, a "Change in Control" will be
considered to have occurred on (i) the date of the acquisition
by any person, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934),
other than X.X. Xxxxxxx, Xxxxxx & Co., Inc. (or any entity
controlling, controlled by or under common control with,
directly or indirectly, X.X. Xxxxxxx, Xxxxxx & Co., Inc.) of
more than 50% of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors
or (ii) the date the shareholders of the Company approve a
merger or sale of all or substantially all of the assets of the
Company.
(g) Executive shall be entitled to an annual executive perquisite
allowance equal to 5% of Executive's base salary during the
Term.
(h) Executive shall be entitled to an automobile allowance equal to
Three Hundred Thirty Dollars ($330) each bi-weekly pay period
during the Term.
3.02 Expenses. The Company will reimburse Executive for reasonable
business-related expenses incurred by her in connection with the
performance of her duties hereunder during the Term, subject, however,
to the Company's policies relating to business-related expenses as in
effect from time to time during the Term.
ARTICLE IV: Exclusivity, Etc.
4.01 Exclusivity. Executive agrees to perform her duties, responsibilities
and obligations hereunder efficiently and to the best of her ability.
Executive agrees that she will devote her entire working time, care
and attention and best efforts to such duties, responsibilities and
obligations throughout the Term. Executive also agrees that she will
not engage in any other business activities, pursued for gain, profit
or other pecuniary advantage, that are competitive with the activities
of the Company, except as provided in Section 4.02 hereof. Executive
agrees that all of her activities as an employee of the Company shall
be in conformity with all present and future policies, rules and
regulations and directions of the Company not inconsistent with this
Agreement.
4.02 Other Business Ventures. Executive agrees that, so long as she is
employed by the Company, she will not own, directly or indirectly, any
controlling or substantial stock or other beneficial interest in any
business enterprise which is engaged in, or competitive with, any
business engaged in by the Company. Notwithstanding the foregoing,
Executive may own, directly or indirectly, up to 5% of the outstanding
capital stock of any business having a class of capital stock which is
traded on any national stock exchange or in the over-the-counter
market.
3
4
4.03 Business Secrets; Confidentiality; Non-Interference.
(a) All right, title and interest of every kind and nature
whatsoever, in and to inventions, patents, trademarks,
copyrights and properties furnished to the Company with which
Executive is in any way connected in the performance of her
duties and obligations hereunder, whether the same were
invented, created, written, developed, furnished, produced or
disclosed by Executive or by any other party during the Term,
shall, as between the parties hereto, be, become and remain the
sole exclusive property of the Company for any and all purposes
and uses whatsoever, and Executive shall have no right, title or
interest of any kind or nature therein.
(b) Executive agrees that she will not, at any time during or after
the Term, make use of or divulge to any other person, firm or
corporation any trade or business secret, process, method or
means, or any other confidential information concerning the
business or policies of the Company which she may have learned
in connection with her employment hereunder. For purposes of
this Agreement, a "trade or business secret, process, method or
means, or any other confidential information" shall mean and
include written information treated as confidential or as a
trade secret by the Company. Executive's obligation under this
Section 4.03(b) shall not apply to any information which (i) is
known publicly; (ii) is in the public domain or hereafter enters
the public domain without the fault of Executive; (iii) is known
to Executive prior to her receipt of such information from the
Company, as evidenced by written records of Executive; (iv) is
hereafter disclosed to Executive by a third party not under an
obligation of confidence to the Company; or (v) Executive is
required to disclose upon legal compulsion. Executive agrees
not to remove from the premises of the Company, except as an
employee of the Company in pursuit of the business of the
Company or except as specifically permitted in writing by the
Company, any document or other object containing or reflecting
any such confidential information. Executive recognizes that
all such documents and objects, whether developed by her or by
someone else, will be the sole exclusive property of the
Company. Upon termination of her employment hereunder,
Executive shall promptly deliver to the Company all such
confidential information including, without limitation, all
lists of customers, employees, and vendors, correspondence,
accounts, records and any other documents or property made or
held by her or under her control in relation to the business or
affairs of the Company or its subsidiaries or affiliates, and no
copy of any such confidential information shall be retained by
her.
(c) Executive shall not, without prior written permission of the
Company, for a period of one year after the termination of her
employment hereunder, either alone or on behalf of any person or
entity, (i) solicit or induce, or in any manner attempt to
solicit or induce, any person employed by, or as agent of, the
Company to terminate such person's employment or agency, as the
case may be, with the Company or with any such subsidiary or
(ii) divert, or attempt to divert, any person, concern, or
entity from doing business with the Company, nor will she
attempt to induce any
4
5
such person, concern or entity to cease or curtail being a
customer or supplier of the Company.
(d) Executive agrees that, at any time and from time to time during
and after the Term, she will execute any and all documents which
the Company may deem reasonably necessary or appropriate to
effectuate the provisions of this Section 4.03. It is also
agreed that the provisions of this Section 4.03 shall survive
the termination for any reasons of this Agreement or Executive's
employment.
ARTICLE V: Termination
5.01 Termination by the Company. The Company shall have the right to
terminate the Executive's employment at any time for "Cause". For
purposes of this Agreement, "Cause" shall mean (i) substantial and
continued failure by the Executive to perform her duties hereunder
after being provided written notice and thirty (30) days to cure such
failure; (ii) conduct grossly insubordinate or disloyal to the
Company; or (iii) the conviction for the commission of a felony.
5.02 Death. In the event Executive dies during the Term, this Agreement
shall automatically terminate, such termination to be effective on the
date of Executive's death.
5.03 Disability. In the event that Executive shall suffer a disability
which shall have prevented her from performing satisfactorily her
obligations hereunder for a period of at least six consecutive months,
or nine months in any 12-month period, the Company shall have the
right to terminate this Agreement, such termination to be effective
upon the giving of notice thereof to Executive in accordance with
Section 6.03 hereof.
5.04 Effect of Termination.
(a) In the event of termination of this Agreement by either party
for any reason, or by reason of the Executive's death or
disability, the Company shall pay to Executive (or her
beneficiary in the event of her death) any base salary or other
compensation earned but not paid to Executive prior to the
effective date of such termination.
(b) Subject to Section 5.04(c), in the event of termination of this
Agreement by the Company during the Initial Term or Second Term
other than for Cause or Executive's death or the Company's
decision to terminate this Agreement at the end of the Initial
Term by providing written notice in accordance with Section
2.01(a) above, the Company shall (i) pay Executive a severance
payment in an amount equal to the annual base salary of
Executive, payable within thirty (30) days after termination;
(ii) continue to pay Executive her base salary for a period of
twelve (12) months following such termination; and (iii) during
such twelve (12) month period following termination, reimburse
Executive for COBRA (Consolidated Omnibus Budget Reconciliation
Act of 1985) payments actually made by Executive
5
6
in order to sustain Executive's then existing scope of medical
coverage in effect on the date of termination.
(c) In the event any payment or benefit received or to be received
by Executive pursuant to this Agreement in connection with a
Change in Control ("Change in Control Payments") would not be
deductible in whole or in part for federal income tax purposes
by reason of Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"), such Change in Control Payments shall
be reduced by the minimum amount necessary to preserve
deductibility of such Change in Control Payments. For purposes
of this limitation, no portion of the Change in Control Payments
shall be taken into account if: (i) in the opinion of tax
counsel selected by the Company and reasonably acceptable to the
Executive, the Change of Control payment does not constitute an
excess parachute payment within the meaning of Section
280G(b)(2) of the Code; and (ii) the value of any non-cash
benefit or any deferred payment or benefit included in the
Change in Control Payments shall be determined by the Company's
independent auditors in accordance with the principles of
Section 280G(b)(3) and (4) of the Code and the regulations
thereunder.
ARTICLE VI: Miscellaneous
6.01 Life Insurance. Executive agrees that the Company or any of its
subsidiaries or affiliates may apply for and secure and own insurance
on Executive's life (in amounts determined by the Company). Executive
agrees to cooperate fully in the application for and securing of such
insurance, including the submission by Executive to such physical and
other examinations, and the answering of such questions and furnishing
of such information by Executive, as may be required by the carrier(s)
of such insurance. Notwithstanding anything to the contrary contained
herein, neither the Company nor any of its subsidiaries or affiliates
shall be required to obtain any insurance for or on behalf of
Executive, except as provided in Section 3.01(b) hereof.
6.02 Benefit of Agreement; Assignment; Beneficiary.
(a) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns, including, without
limitation, any corporation or person which may acquire all or
substantially all of the Company's assets or business, or with
or into which the Company may be consolidated or merged. This
Agreement shall also inure to the benefit of, and be enforceable
by, the Executive and her personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any
amount would still be payable to the Executive hereunder if she
had continued to live, all such amounts shall be paid in
accordance with the terms of this Agreement to the Executive's
beneficiary, devisee, legatee or other designee or, if there is
no such designee, to the Executive's estate.
6
7
(b) The Company shall require any successor (whether direct or
indirect, by operation of law, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume 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.
6.03 Notices. Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given if personally delivered or if
sent by registered or certified mail, postage prepaid, with return
receipt requested, or by overnight courier addressed: (a) in the case
of the Company, to LCI International, Inc., 0000 Xxxxxxxxxx Xxxxx,
Xxxxx 000, XxXxxx, Xxxxxxxx 00000, Attention: Chief Executive
Officer, or to such other address and/or to the attention of such
other person as the Company shall designate by written notice to
Executive; and (b) in the case of Executive, to Xxxx X. Xxxxxxxx, 0000
Xxxxxxxx Xxxx, X.X., Xxxxxxxxxx, X.X. 00000 or such other address as
Executive shall designate by written notice to the Company. Any
notice given hereunder shall be deemed to have been given at the time
of receipt thereof by the person to whom such notice is given.
6.04 Entire Agreement; Amendment. Subject to Section 6.10, this Agreement
contains the entire agreement of the parties hereto with respect to
the terms and conditions of Executive's employment during the Term and
supersedes any and all prior agreements and understandings, whether
written or verbal, between the parties hereto with respect to this
matter. This Agreement may not be changed or modified except by an
instrument in writing signed by both of the parties hereto. In the
event of any inconsistency between this Agreement and any Offer Letter
executed by Executive, the terms and conditions of this Agreement
shall govern.
6.05 Waiver. The waiver by either party of a breach of any provision of
this Agreement shall not operate or be construed as a continuing
waiver or as a consent to or waiver of any subsequent breach hereof.
6.06 Headings. The Article and Section headings herein are for convenience
of reference only, do not constitute a part of this Agreement and
shall not be deemed to limit or affect any of the provisions hereof.
6.07 Enforcement. If any action at law or in equity is brought by either
party hereto to enforce or interpret any of the terms of this
Agreement, the prevailing party shall be entitled to reimbursement by
the other party of the reasonable costs and expenses incurred in
connection with such action (including reasonable attorney's fees), in
additional to any other relief 000to which such party may be entitled.
Executive shall have no right to enforce any of her rights hereunder
by seeking or obtaining injunctive or other equitable relief and
acknowledges that damages are an adequate remedy for any breach by the
Company of this Agreement.
7
8
6.08 Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the internal laws of the State of
Delaware without reference to the principles of conflict of laws.
6.09 Agreement to Take Actions. Each party hereto shall execute and
deliver such documents, certificates, agreements and other
instruments, and shall take such other actions, as may be reasonably
necessary or desirable in order to perform her or its obligations
under this Agreement or to effectuate the purposes hereof.
6.10 Arbitration. Except for disputes with respect to Article IV hereof,
any dispute between the parties hereto respecting the meaning and
intent of this Agreement or any of its terms and provisions shall be
submitted to arbitration in Washington, D.C., in accordance with the
Commercial Rules of the American Arbitration Association then in
effect, and the arbitration determination resulting from any such
submission shall be final and binding upon the parties hereto.
Judgment upon any arbitration award may be entered in any court of
competent jurisdiction.
6.11 Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the
extent necessary to the intended preservation of such rights and
obligations.
6.12 Validity. The invalidity or unforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision or provisions of this Agreement,
which shall remain in full force and effect.
6.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
with the intent that it take effect as of the date first above written.
LCI INTERNATIONAL MANAGEMENT
SERVICES, INC.
By: By:
------------------------- --------- ------------------- ------
H. Xxxxx Xxxxxxxx Date Xxxx X. Xxxxxxxx Date
Chairman & Chief Executive Officer
8
