Amended Executive Services Agreement
Xxxxx CFO Partners, LLP
Amended Executive Services Agreement
October 4, 2005
Xx. Xxxxx X. Xxxxxx
LCC International, Inc.
0000 Xxxxx Xxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Dear Xx. Xxxxxx:
Xxxxx CFO Partners, LLP (“Xxxxx”) understands that LCC International, Inc. (“the Company”) desires to engage a partner of Xxxxx to serve as chief financial officer. This Executive Services Agreement sets forth the conditions under which such services will be provided.
Services; Fees
Xxxxx will make available to the Company C.R. “Xxx” Xxxxxxx (the “Xxxxx Partner”), who will serve as chief financial officer of the Company. The Xxxxx Partner will become an employee and a duly elected or appointed officer of the Company and subject to the supervision and direction of the CEO of the Company, the board of directors of the Company, or both. Xxxxx will have no control or supervision over the Xxxxx Partner.
The Company will pay the Xxxxx Partner directly a salary of $22,916.67 a month (“Salary”). Salary may be increased from time to time, by the Company. Starting October 26, 2005, the Company will pay directly to Xxxxx, as partial compensation for the resources provided, an amount equal to (i) 20% of Salary of the Xxxxx Partner during the first and second 12 months of the term of this agreement, (ii) 12% of Salary during the third 12 months, and (iii) $1,000 per month during the remainder of the term of this agreement.
The Xxxxx Partner will be eligible to receive Cash Bonuses under the Company’s executive incentive compensation plan. The Xxxxx Partner will be eligible to receive Equity Bonuses under the Company’s equity incentive plan. The Company will pay directly to Xxxxx 15% of any Cash Bonus paid to the Xxxxx Partner during the term of this agreement. No payments will be due or payable by the Company with respect to Equity Bonuses. For purposes hereof, (i) “Cash Bonus” means any cash bonus that is paid to the Xxxxx Partner under the Company’s regular annual bonus program for Company executives, (ii) “Equity Bonus” means any stock, option, warrant, or similar right that is granted to or exercised by the Xxxxx Partner, in each case in connection with services rendered by the Xxxxx Partner, and (iii) “Salary” means the regular monthly payments described above plus any severance paid to the Xxxxx Partner during the term hereof, but excluding any Cash Bonus, Equity Bonus, benefits (including medical benefits subsidy paid to Employee), and other compensation. All compensation payable or deliverable to Xxxxx is referred to herein as the “Resource Fee.”
In lieu of the Xxxxx Partner participating in the Company-sponsored employee medical/dental insurance benefit, the Xxxxx Partner will remain on his or her current medical/dental plan. The Company will reimburse the Xxxxx Partner for amounts paid by the Xxxxx Partner for such medical/dental insurance for himself and (where applicable) his family of up to $ 324.00 per month upon presentation of reasonable documentation of premiums paid by the Xxxxx Partner. In accordance with the U.S. federal tax law, such amount will not be considered reportable W-2 income, but instead non-taxable benefits expense.
As an employee, the Xxxxx Partner will be eligible for any Company employee retirement and/or 401(k) plan and for vacation and holidays consistent with the Company’s policy as it applies to senior management, and the Xxxxx Partner will be exempt from any delay periods otherwise required for eligibility.
Payments;
Payments to Xxxxx should be made by direct deposit through the Company’s payroll, or by an automated clearing house (“ACH”) payment at the same time as payments are made to the Employee. If such payment method is not available and payments are made by check, Xxxxx will issue invoices to the Company, and the Company agrees to pay such invoices no later than ten (10) days after receipt of invoices.
The Company will reimburse the Xxxxx Partner directly for out-of-pocket expenses incurred by the Xxxxx Partner in providing services hereunder to the same extent that the Company is responsible for such expenses of senior managers of the Company.
Converting to Permanent
The Company will have the opportunity to make the Xxxxx Partner a permanent member of Company management at any time during the term of this agreement by entering into another form of Xxxxx agreement, the terms of which will be negotiated at such time.
Hiring Xxxxx Partner Outside of Agreement
During the twelve (12)-month period following termination or expiration of this agreement, other than in connection with conversion to a Permanent Employee under the previous paragraph, the Company will not employ the Xxxxx Partner, or engage the Xxxxx Partner as an independent contractor, to render services of substantially the same nature as those to be performed by the Xxxxx Partner as contemplated by this agreement. The parties recognize and agree that a breach by the Company of this provision would result in the loss to Xxxxx of the Xxxxx Partner’s valuable expertise and revenue potential and that such injury will be impossible or very difficult to ascertain. Therefore, in the event this provision is breached, Xxxxx will be entitled to receive as liquidated damages an amount equal to twenty-five percent (25%) of the Xxxxx Partner’s Annualized Compensation (as defined below), which amount the parties agree is reasonably proportionate to the probable loss to Xxxxx and is not intended as a penalty. The amount will be due and payable to Xxxxx upon written demand to the Company. For this purpose, ''Annualized Compensation’’ will mean monthly Salary equivalent to what the Xxxxx Partner would receive on a full-time basis multiplied by twelve (12), plus the maximum amount of any Cash Bonus for which the Xxxxx Partner was eligible with respect to the then current bonus year, and which the Xxxxx Partner had a reasonable opportunity to receive given any relevant performance or other criteria and/or the Company’s then-current bonus practices, provided that such payment shall be pro rated on the basis of the number of days the Xxxxx Partner actually performed services hereunder within the applicable annual bonus period.
Termination
The Company may terminate this agreement, and the Xxxxx Partner’s employment, for any reason or for no reason at anytime upon at least 30 days’ prior written notice to the Xxxxx Partner, such termination to be effective on the date specified in the notice, provided that such date is no earlier than 30 days from the date of delivery of the notice. Upon any such termination, the company shall have no further obligation or liability hereunder except (a) the payment of any Salary earned but unpaid as of the effective date of termination, and (b) the payment of any Severance Payment due and payable under the following paragraph of this agreement. Likewise, Xxxxx may terminate his employment for any reason upon at least 30 days’ prior written notice to the Company, such termination to be effective on the date 30 days following the date of the notice. The Xxxxx Partner will continue to render services (unless placed on leave for such period by the Company) and to be paid during such 30-day period, regardless of who gives such notice. Xxxxx may terminate this agreement immediately if the Company has not remained current in its obligations under this letter or if the Company engages in or asks the Employee to engage in or to ignore any illegal or unethical conduct.
This agreement will terminate immediately upon the death or disability of the Employee. For purposes of this agreement, disability will be as defined by the applicable policy of disability insurance or, in the absence of such insurance, by the Company’s Board of Directors acting in good faith.
Xxxxx retains the right to terminate this agreement immediately if (1) the Company is engaged in or asks the Xxxxx Partner to engage in or to ignore any illegal or unethical activity, (2) the Xxxxx Partner dies or becomes disabled, (3) the Xxxxx Partner ceases to be a partner of Xxxxx for any other reason, or (4) upon ten days advance written notice by Xxxxx of non-payment by the Company of amounts due under this agreement, unless such amounts are paid. For purposes of this agreement, disability will be as defined by the applicable policy of disability insurance or, in the absence of such insurance, by Xxxxx’x management acting in good faith.
The Xxxxx Partner’s Salary will be prorated for the final pay period based on the number of days in the final pay period up to the effective date of termination or expiration.
Severance Payment
In the event of termination of employment by the Company due to no fault of Xxxxx or the Xxxxx Partner, the Employee will be entitled to receive severance benefits in accordance with the Company’s then-current separation guidelines and practice for executives at the same level taking into consideration tenure and other factors deemed relevant by the CEO and/or the Company’s Board of Directors. The payment of such severance shall be contingent upon the Xxxxx Partner’s having executed and delivered to the Company (i) a full waiver and release of any and all potential claims, and (ii) assurances with respect to continuing obligations of non-competition and confidentiality in a form acceptable to the Company, in each case in the form generally obtained by the Company in consideration for severance benefits.
The Company will pay directly to Xxxxx an amount equal to the same percent that applies for Salary above for any Severance Payments that the Company may make to the Xxxxx Partner. For purposes hereof, “Severance Payment” means any payments made to the Xxxxx Partner by Company as a severance benefit in connection with the termination of the Xxxxx Partner’s employment. With such payment, the Company shall have no further obligation to Xxxxx or liability hereunder.
In the event that either party commits a breach of this agreement, other than for reasons described in the above paragraph, and fails to cure the same within seven (7) days following delivery by the non-breaching party of written notice specifying the nature of the breach, the non-breaching party will have the right to terminate this agreement immediately effective upon written notice of such termination.
Insurance
The Company will provide Xxxxx or the Xxxxx Partner with written evidence that the Company maintains directors’ and officers’ insurance at no additional cost to the Xxxxx Partner, and the Company will maintain such insurance at all times while this agreement remains in effect.
Disclaimers, Limitations of Liability & Indemnity
Xxxxx assumes no responsibility or liability under this agreement other than to render the services called for hereunder and will not be responsible for any action taken by the Company in following or declining to follow any of Xxxxx’x advice or recommendations. Xxxxx represents to the Company that Xxxxx has conducted reasonable screening and background checks and investigation procedures consistent with those procedures used by US public companies for similar positions with respect to the Xxxxx Partner becoming a partner in Xxxxx, and the results of the same uncovered no possible concerns. Xxxxx disclaims all other warranties, either express or implied. Without limiting the foregoing, Xxxxx makes no representation or warranty as to the accuracy or reliability of reports, projections, forecasts, or any other information derived from use of Xxxxx’x resources, and Xxxxx will not be liable for any claims of reliance on such reports, projections, forecasts, or information. Xxxxx will not be liable for any non-compliance of reports, projections, forecasts, or information or services with federal, state, or local laws or regulations. Such reports, projections, forecasts, or information or services are for the sole benefit of the Company and not any unnamed third parties.
In the event that any partner of Xxxxx (including without limitation the Xxxxx Partner to the extent not otherwise entitled in his or her capacity as an officer of the Company) is subpoenaed or otherwise required to appear as a witness or Xxxxx or such partner is required to provide evidence, in either case in connection with any action, suit, or other proceeding initiated by a third party or by the Company against a third party, then the Company shall reimburse Xxxxx for the costs and expenses (including reasonable attorneys’ fees) actually incurred by Xxxxx or such partner and provide Xxxxx with compensation at Xxxxx’x customary rate for the time incurred.
The Company agrees that, with respect to any claims the Company may assert against Xxxxx in connection with this agreement or the relationship arising hereunder, Xxxxx’x total liability will not exceed two (2) months of Fees.
As a condition for recovery of any liability, the Company must assert any claim against Xxxxx within three (3) months after discovery or sixty (60) days after the termination or expiration of this agreement, whichever is earlier.
Neither party hereto will be liable in any event for incidental, consequential, punitive, or special damages, including without limitation, any interruption of business or loss of business, profit, or goodwill.
Arbitration
If the parties are unable to resolve any dispute arising out of or in connection with this agreement, either party may refer the dispute to arbitration by a single arbitrator selected by the parties according to the rules of the American Arbitration Association (“AAA”), and the decision of the arbitrator will be final and binding on both parties. Such arbitration will be conducted by the Northern Virginia office of the AAA. In the event that the parties fail to agree on the selection of the arbitrator within thirty (30) days after either party’s request for arbitration under this paragraph, the arbitrator will be chosen by AAA. The arbitrator may in his discretion order documentary discovery but shall not allow depositions without a showing of compelling need. The arbitrator will render his decision within ninety (90) days after the call for arbitration. The arbitrator will have no authority to award punitive damages. Judgment on the award of the arbitrator may be entered in and enforced by any court of competent jurisdiction. The arbitrator will have no authority to award damages in excess or in contravention of this agreement and may not amend or disregard any provision of this agreement, including this paragraph. Notwithstanding the foregoing, either party may seek appropriate injunctive relief from a court of competent jurisdiction, and either party may seek injunctive relief in any court of competent jurisdiction.
Miscellaneous
Xxxxx will be entitled to receive all reasonable costs and expenses incidental to the collection of overdue amounts under this agreement, including but not limited to attorneys’ fees actually incurred.
Neither the Company nor Xxxxx will be deemed to have waived any rights or remedies accruing under this agreement unless such waiver is in writing and signed by the party electing to waive the right or remedy. This agreement binds and benefits the respective successors of Xxxxx and the Company.
Neither party will be liable for any delay or failure to perform under this agreement (other than with respect to payment obligations) to the extent such delay or failure is a result of an act of God, war, earthquake, civil disobedience, court order, labor dispute, or other cause beyond such party’s reasonable control.
The provisions concerning payment of compensation and reimbursement of costs and expenses, limitation of liability, directors’ and officers’ insurance, and arbitration will survive the expiration or any termination of this agreement.
This agreement will be governed by and construed in all respects in accordance with the laws of the Commonwealth of Virginia, without giving effect to conflicts-of-laws principles.
The terms of this agreement are severable and may not be amended except in writing signed by the party to be bound. This agreement amends and supercedes the Executive Services Agreement executed by the parties as of April 19, 2005. If any portion of this agreement is found to be unenforceable, the rest of the agreement will be enforceable except to the extent that the severed provision deprives either party of a substantial benefit of its bargain.
Nothing in this agreement shall confer any rights upon any person or entity other than the parties hereto and their respective successors and permitted assigns and the Xxxxx Partner.
Each person signing below is authorized to sign on behalf of the party indicated, and in each case such signature is the only one necessary.
Bank Lockbox Mailing Address for Deposit and Fees:
Xxxxx CFO Partners, LLP
X.X. Xxx 000000
Xxxxxxx, XX 00000-0000 |
| Electronic Payment Instructions for Deposit and Fees: |
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Bank Name: Bank of America Branch: Atlanta Routing Number: |
For ACH Payments: XXXXXXXXXX For Wires: XXXXXXXXXX |
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Account Name: Xxxxx CFO Partners, LLP
Account Number: XXXXXXXXX
Please reference LCC International, Inc. in the body of the wire.
Please sign below and return a signed copy of this letter to indicate the Company’s agreement with its terms and conditions.
We look forward to serving you.
Sincerely yours,
| XXXXX CFO PARTNERS, LLP | ||
/s/ Xxxxxx X. Xxxxxxxxx
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Signature Xxxxxx X. Xxxxxxxxx Area Managing Partner for XXXXX CFO PARTNERS, LLP October 4, 2005 |
Acknowledged and agreed by: |
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| LCC International, Inc. | ||
| /s/ Xxxxx X. Xxxxxx | ||
| Signature Xxxxx X. Xxxxxx Interim Chief Executive Officer October 4, 2005 |
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| (Date) | ||
