AGREEMENT REGARDING VESTING AND
ADJUSTMENT OF STOCK OPTIONS
This Agreement is entered into on June 25, 1996, between Xxxxxx X.
Xxxxxx, Xx. ("Employee"), U.S. Long Distance Corp., a Delaware corporation
(the "Company"), and Billing Information Concepts Corp., a Delaware
corporation ("Billing"), but effective as of the date of distribution of the
common stock of Billing to holders of the Company's common stock (the
"Distribution Date"). Since the effectiveness of this Agreement is expressly
contingent on the spinoff of Billing through its distribution to the
Company's stockholders, if such condition precedent does not occur as
anticipated by the parties hereto, this Agreement will be void AB INITIO, and
the prior agreement regarding vesting of stock options entered into between
the parties will remain in full force and effect.
WHEREAS, Employee has been granted and may hereafter be granted options
under the Company's 1990 Employee Stock Option Plan (as amended from time to
time, the "Option Plan") to acquire shares of common stock, $.01 par value,
of the Company; and
WHEREAS, Billing and Employee have entered into an Amended and Restated
Employment Agreement on June 25, 1996 to be effective as of the Distribution
Date (the "Employment Agreement"); and
WHEREAS, as contemplated in the Employment Agreement, the parties desire
that (i) options granted to Employee under the Option Plan ("Options") become
fully exercisable by Employee upon the Distribution Date, (ii) Options
granted prior to the Distribution Date be adjusted in exercise price and/or
number, as may be appropriately determined by the Company in good faith, to
prevent diminution in value of the Options granted to Employee prior to the
Distribution Date as a result of the spinoff of Billing, taking into
consideration options granted to Employee by a stock option plan to be
established by Billing (the "Billing Option Plan"), and (iii) that all
previously granted Options be exercisable until two years following the
Distribution Date, notwithstanding any employment requirement otherwise
required under the Option Plan; and
WHEREAS, in consideration of Employee's efforts in increasing the value
of Billing prior to the Distribution Date, and in order to prevent diminution
in value of Options previously granted to Employee, Billing desires to
establish the Billing Option Plan and to grant Employee options to purchase
shares of Billing's common stock ("Billing Options") under terms and
conditions substantially identical to Options previously granted to Employee
by the Company (without an employment requirement limiting the exercise
period, unless and until Employee becomes an employee of Billing), ratably
adjusted in good faith by Billing to ensure that following the Distribution
Date Employee will have Options and Billing Options which, taken in
aggregate, provide that same economic benefit to Employee as Options
previously granted to Employee prior to the Distribution Date;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, notwithstanding any provisions to the
contrary contained in resolutions granting or agreements governing Options
heretofore granted to Employee under the Option Plan, conditioned expressly
upon the distribution of the common stock of Billing to holders of the
Company's common stock as of the Distribution Date, then, in any such event,
immediately upon the Distribution Date, (i) all Options which have not lapsed
shall become fully vested and exercisable (if not already vested and
exercisable) by Employee for the remainder of the exercise period established
under the Option Plan, or two years following the Distribution Date,
whichever occurs later, (ii) the Company shall, in good faith, cause the
Options to be adjusted in exercise price or number so as to prevent any
diminution in the value of the Options as a result of the spinoff of Billing,
taking into consideration options granted to Employee by a stock option plan
to be established by Billing; and (iii) Billing shall cause to be granted to
Employee Billing Options determined by Billing, in good faith, in such amount
and at such exercise prices when, taken in aggregate with Options previously
granted to Employee and as subsequently adjusted as provided herein, prevent
any diminution in value of the Options previously granted to Employee prior
to the Distribution Date as a result of the spinoff of Billing, such Billing
Options to be exercisable at such time as originally provided for under the
Option Plan, without regard to any employment requirement of the Employee at
Billing (unless Employee transfers employment to Billing, in which case the
employment requirement for exercise shall be applicable from that date
forward).
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date indicated above.
COMPANY: U.S. LONG DISTANCE CORP.
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
BILLING: BILLING INFORMATION CONCEPTS CORP.
By: /s/ XXXX X. XXXXXXXX
--------------------------------
Name: Xxxx X. Xxxxxxxx
EMPLOYEE: /s/ XXXXXX X. XXXXXX, XX.
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XXXXXX X. XXXXXX, XX.
