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EXHIBIT 10.25
EMPLOYMENT AGREEMENT
This employment agreement ("Agreement") is made as of April
26, 1999 by and between IXC Communications, Inc., a Delaware corporation (the
"Company"), and Xxxxx X. Xxxxxxx ("Employee").
BACKGROUND
Employee is now, and has been for several years, employed by
the Company. As an inducement for Employee to remain with the Company through
and beyond December 31, 1999, the Company and Employee now desire to enter into
a formal employment contract all as set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, the parties hereto, intending
to be legally bound, hereby agree as follows:
SECTION 1. CAPACITY AND DUTIES
1.1 Employment; Acceptance of Employment. Effective April 26,
1999, the Company employs Employee as Executive Vice President, Chief Financial
Officer, and Employee hereby accepts such employment with the Company, for the
period and upon the terms and conditions hereinafter set forth.
1.2 Capacity and Duties.
(a) Employee shall be employed by the Company as
Executive Vice President, Chief Financial Officer, and shall be responsible for
all financial operations and M&A activities of the Company and its subsidiaries,
and shall perform such duties and shall have such authority, consistent with his
position, as may from time to time reasonably be specified by the Board of
Directors of the Company (the "Board"). While not a member of the Board,
Employee will be included in all applicable Board of Directors meetings,
teleconferences, etc.
(b) Employee shall devote Employee's full-time
attention, energies, skills, learning and best efforts to the business of the
Company and, during the term of this Agreement, shall not be engaged, directly
or indirectly, in any other business activity or render services of a business,
professional or commercial nature to any other person, firm or corporation, in
competition with the Company, except as otherwise agreed to in writing by the
Company.
SECTION 2. TERM OF EMPLOYMENT
2.1 Term. The term of Employee's employment hereunder shall
commence on April 26, 1999, and shall continue until October 7, 2002, unless
earlier terminated as hereinafter provided. Upon the expiration of such term,
Employees employment with the Company shall continue on an at will employment
basis until terminated by either party.
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2.2 Notwithstanding section 2.1 above, Employee may terminate
this Agreement at any time upon giving no less than 90 days notice to the
Company.
SECTION 3. COMPENSATION
3.1 Basic Compensation. As compensation for Employee's
services hereunder, the Company shall pay to Employee a salary at the annual
rate of $278K payable in periodic installments in accordance with the Company's
regular payroll practices in effect from time to time, or at such higher annual
rate as the Board shall from time to time determine in its sole discretion. The
Board shall review Employee's salary no less frequently than annually.
3.2 Incentive Compensation. In addition to the base salary
provided in Section 3.1 hereof, Employee shall be eligible to receive an annual
bonus in accordance with the Company's policy, at the same level as other senior
executives of the Company, upon meeting the defined corporate objectives set by
the Board and the personal objectives set by the CEO.
3.3 Health and Dental Benefits. In addition to the
compensation provided for in Section 3.1 and Section 3.2 hereof, Employee shall
be entitled to all rights and benefits for which Employee is eligible under any
health and dental insurance policies that IXC provides to its employees or
officers in comparable positions during the term of this Agreement.
3.4 Vacation. Employee shall be entitled to paid vacation
during the term of his employment hereunder in accordance with the Company's
vacation policy.
3.5 Reimbursement of Business Expenses. The Company will, upon
submission of appropriate documentation, promptly reimburse employee for
reasonable and authorized business expenses (including travel, entertainment,
business meetings, telephone and similar items) incurred by Employee during the
term of this Agreement in accordance with the Company's policy.
3.6 Special payments.
(a) Provided Employee remains an active employee of
the Company beyond December 31, 1999, or should he be terminated by the Company
for reasons other than cause, as defined in section 4.3, including change of
title or a decrease in his responsibilities (excepting the title and
responsibilities as CFO which both parties agree may be changed or deleted after
the date hereof) prior to December 31, 1999, employee shall be entitled to: a
special one-time payment of $556K on January 20, 2000; a payout of his 1999
bonus target at a minimum of 50% of base pay, on the normal bonus payment date
regardless of whether he is an employee on such date; and, upon termination, a
cash payment equivalent to the value of the acceleration of his then unvested
options scheduled on Exhibit A calculated at the market price as of such
termination date, less his exercise price, multiplied by the number of unvested
shares at the time of such termination. In addition, Employee and the Company
agree that: (i) should Employee be terminated by the Company for reasons other
than cause as defined in section 4.3, or (ii) should Employee terminate this
Agreement in accordance with section 2.2 above prior to
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October 7, 2002, Employee and the Company, at no additional cost to the Company
other than the value of actual services performed, agree to allow Employee to
enter into an independent contractor relationship with the Company for
consulting services, such that Employee shall have a minimum of one year from
his termination date, but not beyond October 7, 2002, to exercise any then
vested stock options granted prior to April 26, 1999, in accordance with the
terms of the applicable Stock Plan.
(b) Any options granted after the effective date of this
agreement shall not be subject to the provisions of paragraph 3.6 (a) above.
3.7 Other benefits. In addition to the benefits set forth in
this Section 3, Employee shall be entitled to all other rights and benefits that
IXC provides to its employees or officers in comparable positions during the
term of this Agreement.
SECTION 4. TERMINATION OF EMPLOYMENT
4.1 Death of Employee. Employee's employment hereunder shall
immediately terminate upon his death.
4.2 Disability of Employee. If Employee, in the reasonable
opinion of a physician selected by the Board, is materially unable, due to a
physical, mental or emotional illness or condition, to perform his duties
hereunder for a period of three consecutive months, the Board shall have the
right to terminate Employee's employment upon 30 days' prior written notice to
Employee at any time during the continuation of such inability.
4.3 Termination for Cause. The Board may terminate Employee's
employment hereunder for "cause" immediately upon written notice to Employee. As
used herein, "cause" shall mean the following:
(a) fraud committed in connection with Employee's
employment, or theft, misappropriation or embezzlement of the Company's funds or
property;
(b) conviction of any felony, crime involving fraud
or misrepresentation, or any other crime the effect of which is likely to
materially adversely affect the Company;
(c) failure to follow a reasonable lawful directive
of the Board or an authorized Company officer or director following two business
days' notice that such failure shall constitute grounds for termination for
cause; or
(d) abuse of alcohol or other drugs which materially
interferes with the performance by Employee of his duties hereunder, provided
that Employee has been given 30 days' prior written notice by the Board of its
intent to terminate Employee pursuant to this provision during which time
Employee has not demonstrated the cessation of such abuse to the reasonable
satisfaction of the Board.
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4.4 Termination Without Cause. If the Employee's employment is
terminated by the Company for any reason other than as set forth above,
Employee's termination shall be considered "without cause."
4.5 Payments upon Termination.
(a) If Employee's employment is terminated as a
result of his death, the Company shall not thereafter be obligated to make any
further payments under this Agreement other than amounts payable hereunder
accrued as of the date of Employee's death in accordance with generally accepted
accounting principles.
(b) If Employee's employment is terminated by the
Company pursuant to Section 4.2 (disability), the Company shall not thereafter
be obligated to make any further payments under this Agreement other than
amounts payable hereunder accrued as of the date of Employee's termination in
accordance with generally accepted accounting principles.
(c) If Employee's employment is terminated by the
Company pursuant to Section 4.3 (cause), the Company shall not thereafter be
obligated to make any further payments under this Agreement other than amounts
payable hereunder accrued as of the date of Employee's termination in accordance
with generally accepted accounting principles.
(d) If Employee's employment is terminated by the
Company pursuant to Section 4.4 (without cause) the Company shall not thereafter
be obligated to make any further payments under this Agreement other than (i)
amounts payable hereunder accrued as of the date of Employee's termination in
accordance with generally accepted accounting principles, and (ii) severance
payments in an amount equal to the sum of the payments and obligations set forth
in Sections 3.1, 3.3, and, with respect to any payments not yet made, 3.6, from
the date of such termination through the end of the term, but in no event to
exceed a period of one year.
4.6 No Mitigation. There shall be no requirement on the part
of Employee to seek other employment or otherwise mitigate damages in order to
be entitled to the full amount of any payments or benefits to be made pursuant
to this Agreement and payments due in respect of periods following the
termination of employment shall not be diminished by any amounts earned by
Employee from any other employment.
SECTION 5. MISCELLANEOUS
5.1 Noncompetition. During the term of Employee's employment
hereunder, and continuing until one year after termination of Employees
employment hereunder or (iii) a Change of Control as defined in paragraph 3.7.2,
Employee shall not, directly or indirectly, engage in, render services of any
nature to, provide financial support for, plan for, be connected in any manner
with or organize any business which is competitive with or similar to the
business of the Company if such other business has operations or planned
operations anywhere in the
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world where the Company or its subsidiaries has or plans to have operations, by
becoming an owner, officer, director, shareholder (except for less than 2% of a
publicly traded stock for investment purposes only), partner, creditor,
associate, employee, agent, representative or consultant or serve in any other
capacity in connection with such other business without the Company's prior
written consent. Each of the parties hereto acknowledges that the restrictions,
prohibitions and other provisions hereof are reasonable, fair and equitable in
scope, terms and duration, are necessary to protect the legitimate business
interests of the Company given the current scope of the Companies business and
Employees expertise, and are a material inducement to the Company to enter into
this Agreement. The provisions of this section shall survive the termination of
this Agreement.
5.2 Nonsolicitation. During the term of Employee's employment
and continuing for one year thereafter, Employee shall not, directly or
indirectly; (i) hire or solicit any employee, consultant, sales representative,
sales agent or advisor of the Company or any of its affiliates or encourage any
such employee, consultant, sales representative, sales agent or advisor to leave
such employment for any business whether or not a competitor of the Company; or
(ii) solicit or divert or attempt to divert to any competitor any business of
the Company or solicit or divert or attempt to divert any customers or suppliers
of the Company.
5.3 Confidentiality/Trade Secrets. Since the work for which
Employee is employed and upon which Employee will be engaged will include
knowledge and information of a confidential nature to, and the secret property
of, the Company, or persons, firms, entities or corporations with whom the
Company is affiliated, or customers of the Company or its affiliates (including
but not limited to inventions, improvements, designs systems, ideas, financial
and technical data, trade secrets, business plans, financing systems and
techniques, sales techniques and approaches, and customer and supplier
information), Employee shall receive all knowledge and information in
confidence, and shall not at any time (during or after employment with the
Company) except as required in the conduct of the Company business, or
authorized in writing by the Company, publish, disclose or use or authorize
anyone else to publish, disclose or make use of any such information or
knowledge unless and until such information or knowledge shall have ceased to be
secret or confidential as evidenced by general public knowledge. In the event
that Employee's employment with the Company shall cease, Employee authorizes the
Company to send a copy of this section in its sole discretion, to any and all
future employers which Employee may have and to any and all persons, firms,
entities and corporations with whom Employee may become affiliated in a business
or commercial enterprise, and inform any and all such employers, persons, firms,
entities or corporations that the Company intends to exercise its legal rights
should Employee breach the terms of this Agreement or should another party
induce a breach by Employee. The provisions of this section shall survive the
termination of this Agreement.
5.4 Property. All results and proceeds of Employee's services
hereunder, and all inventions, improvements, systems, designs, ideas, business
plans, sales techniques and approaches which Employee made or conceived or which
Employee may make or conceive, at any time after the commencement of Employee's
employment with the Company and until the termination thereof, either
individually or jointly with others, or which Employee utilizes in
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carrying out Employee's duties hereunder (hereinafter "Property"), shall be the
exclusive property of the Company as a "work for hire", and Employee hereby
assigns and agrees to assign to the Company all of Employee's rights in and to
all such Property, and to all copyrights (statutory and common law), covering
any or all of the Property. The provisions of this section shall survive the
termination of this Agreement.
5.5 Injunction; Confidential Materials. Employee hereby
consents and agrees that for any violation of any of the provisions of Section
5.3 (Confidentiality/Trade Secrets), or Section 5.4 (Property) of this
Agreement, a restraining order and/or an injunction may issue against Employee
in addition to any other rights the Company may have at law or in equity.
Employee agrees that records containing secret or confidential knowledge and
information prepared by Employee or which come into Employee's possession during
Employee's employment by the Company, are and remain the property of the
Company, and if and when Employee's employment with the Company terminates, all
such records and all copies thereof shall be left with the Company.
5.6 Remedies. Employee acknowledges and agrees that the
services to be rendered by Employee hereunder and the rights and privileges
herein granted to the Company are by reason of Employee's skill and experience,
of a special, unique, unusual, extraordinary and intellectual character which
gives them a peculiar value, the loss of which cannot reasonably or adequately
be compensated in damages in an action at law, and that a breach by Employee of
any of the provisions contained herein, including, without limitation, the
provisions of Section 5.1 (Noncompetition), will cause the Company irreparable
injury and damage. Employee expressly agrees that the Company shall be entitled
as a matter of right to injunctive or other equitable relief to prevent a breach
of this Agreement by Employee. Resort to such equitable relief, however, shall
not be construed as a waiver of any other rights or remedies which the Company
may have for damages or otherwise hereunder. Employee specifically agrees that
the Company may recover by appropriate action the amount of the actual damage
caused the Company by any failure, refusal or neglect of Employee to keep and
perform all of the agreements and warranties herein contained.
5.7 Prior Employment. Employee represents and warrants that he
is not a party to any other employment, non-competition or other agreement or
restriction which could interfere with his employment with the Company or his or
the Company's rights and obligations hereunder; and that his acceptance of
employment with the Company and the performance of his duties hereunder will not
breach the provisions of any contract, agreement, or understanding to which he
is party or any duty owed by him to any other person.
5.8 Severability. The invalidity or unenforceability of any
particular provision or part of any provision of this Agreement shall not affect
the other provisions or parts hereof.
5.9 Assignment. This Agreement shall not be assignable by
Employee, and shall be assignable by the Company only to any person or entity
which may become a successor in interest (by purchase of assets or stock, or by
merger, or otherwise) to the Company. Subject to the foregoing, this Agreement
and the rights and obligations set forth herein shall inure to the
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benefit of, and be binding upon, the parties hereto and each of their respective
permitted successors, assigns, heirs, executors and administrators.
5.10 Notices. All notices hereunder shall be in writing and
shall be sufficiently given if hand-delivered, sent by documented overnight
delivery service or registered or certified mail, postage prepaid, return
receipt requested or by facsimile (confirmed by U.S. mail), confirmation
received, addressed as set forth below or to such other person and/or at such
other address as may be furnished in writing by any party hereto to the other.
Any such notice shall be deemed to have been given as of the date received, in
the case of personal delivery, or on the date shown on the receipt of
confirmation therefor, in all other cases. Any and all service of process and
any other notice in any action, suite or proceeding shall be effective against
any party if given as provided in this Agreement; provided that nothing herein
shall be deemed to affect the right of any party to serve process in any other
manner permitted by law.
(a) If to the Company:
IXC Communications, Inc.
0000 Xxxxx Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Tel: 000-000-0000
Fax: 000-000-0000
(b) If to Employee:
Xx. Xxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
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5.11 Entire Agreement and Modification. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
matters contemplated herein and supersedes all prior agreements and
understandings with respect thereto. Any amendment, modification or waiver of
this Agreement shall not be effective unless in writing. Neither the failure nor
any delay on the part of any party to exercise any right, remedy, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or any other right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of any right, remedy, power
or privilege with respect to any other occurrence.
5.12 Binding Arbitration. The parties hereby consent to the
resolution by binding arbitration of all claims or controversies in any way
arising out of, relating to or associated with this Agreement. Any arbitration
required by this Agreement shall be conducted before a single arbitrator in
Austin, Texas in accordance with the commercial arbitration rules of the
American Arbitration Association then existing, and any award, order or judgment
pursuant to such arbitration may be enforced in any court of competent
jurisdiction. The arbitrator shall apply rules of Texas law and the parties
expressly waive any claim or right to an award of punitive damages. All such
arbitration proceedings shall be conducted on a confidential basis.
Notwithstanding the foregoing, either party may seek injunctive or other
equitable relief in a court of law without proceeding through arbitration.
5.13 Amendment. This Agreement may only be amended by an
agreement in writing signed by the Company and Employee.
5.14 Governing Law. This Agreement is made pursuant to, and
shall be construed and enforce in accordance with, the internal laws of the
State of Texas, without giving effect to otherwise applicable principles of law.
5.15 Headings; Counterparts. The headings of paragraphs in
this Agreement are for convenience only and shall not affect its interpretation.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original an all of which, when taken together, shall be
deemed to constitute but one and the same Agreement.
5.16 Further Assurances. Each of the parties hereto shall
execute such further instruments and take such other actions as any other party
shall reasonably request in order to effectuate the purposes of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
IXC Communications, Inc.
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
Employee:
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Date: 5/18/99
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Exhibit A
Xxxxx X. Xxxxxxx
Employment Agreement
Number Remaining
Grant Date of Options Xxxxx Xxxxx Vesting Dates
o 10/29/1996 100,000 $22.50 10/29/1999
10/29/2000
o 9/9/1997 50,000 $27.50 9/9/1999
9/9/2000
9/9/2001
o 10/7/1998 37,000 $22.00 10/7/1999
10/7/2000
10/7/2001
10/7/2002
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