Exhibit 10.12
March 15, 2006
Xx. Xxxxx X. Xxxxxxx
0000 Xxxxx Xxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Dear Xxx:
I am pleased to inform you that effective December 31, 2005, the Compensation
Committee of the Board of Directors of Xxx Communications, Inc. (CCI) has
approved a special award to you of 325,000 Recognition Units ("Units") to
recognize the continuing legacy of your past contributions to the growth and
success of CCI. This letter agreement ("Agreement") will describe the terms and
conditions of your award.
Each Unit will have a beginning Unit price of $10.00 per Unit. The payment, if
any, to you under this Agreement will be based on the increase in the value of
the Units over a three-year measurement period beginning January 1, 2006 and
ending December 31, 2008 (the "Measurement Period"). To determine the increase
in the value of the Units over the Measurement Period, the beginning Unit price
will be multiplied by a compound annual growth rate (the "Growth Rate") in order
to calculate the Unit price at the end of the Measurement Period. The Growth
Rate will be expressed as a percentage and will be equal to CCI's cumulative
operating free cash flow ("OFCF") over the Measurement Period, divided by a 2005
base year OFCF, multiplied to the 2.5 power as a growth multiplier.
Once the Unit price at the end of the Measurement Period is calculated as set
forth above, the beginning Unit price will be subtracted from the ending Unit
price to determine the appreciation in the value of each Unit (the "Unit
Appreciation Amount"). The Unit Appreciation Amount will be multiplied by the
325,000 Units awarded to determine the final benefit amount payable to you. Any
benefit will be payable to you or, in the event of your death prior to the date
of such payment, to your estate in a lump sum cash payment as soon as
practicable following the end of the Measurement Period.
Notwithstanding any other provisions of this Agreement to the contrary, if a
Growth Rate of fifteen percent (15%) is not achieved over the Measurement
Period, then no benefit will be payable under this Agreement.
The Compensation Committee of CCI will have the sole discretion to amend or
modify your award or any feature of your award, including without limitation the
components used in calculating OFCF, the beginning or ending Unit price, the
Measurement Period, or the amount of any payout, to reflect acquisitions,
spin-offs, other significant corporate or accounting events, or any other factor
deemed appropriate in the Committee's sole discretion; provided that no such
amendment or modification may result in a change in the timing or form of any
payment due to you under this Agreement.
By signing below, you agree that you have read this Agreement and understand its
terms, that you have not relied on any representation or statement not set forth
in this Agreement, that this Agreement shall be governed by the laws of the
State of Delaware, and that this Agreement shall be binding upon you and your
heirs, executors, administrators, representatives, successors and assigns.
Very truly yours,
/s/ Marybeath Xxxxxx
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Xxxxxxxx Xxxxxx
Agreed and accepted:
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
