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EXHIBIT 10(i)(xx)
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of March 18, 1996, between LCI
International Management Services, Inc., a Delaware corporation (the
"Company"), and Roy Gamse ("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 Marketing of the Company, effective as of
the date of this Agreement. Executive hereby accepts such
employment commencing on March 18, 1996.
1.02 Duties and Responsibilities. Executive shall have such duties
and responsibilities as are customarily associated with his
position.
1.03 Base of Operation. Executive's principal bases of operation
for the performance of his duties and responsibilities under
this Agreement shall be the offices of the Company in Dublin,
Ohio and 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
his 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 12 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 his knowledge, neither the
execution and delivery of this Agreement nor the
performance of his duties hereunder violates or will
violate the provisions of any other agreement to
which he is a party or by which he is bound.
ARTICLE III: Compensation and Expenses
3.01 Salary, Bonuses and Benefits. As compensation and consideration for
the performance by Executive of his obligations under this Agreement,
Executive shall be entitled to the following (subject, in each case,
to the provisions of Article V hereof):
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(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 One Hundred
Sixty Thousand Dollars ($160,000) per year; provided,
however, that Executive will work four (4) days per
week for the Company and one (1) day per week for
Earth Force, Inc. during a transition period that
will last no longer than April 30, 1996. During the
transition period, Executive will receive
compensation at the rate of One Hundred Twenty
Thousand Dollars ($120,000) per year. All other
benefits described in this Employment Agreement will
begin on March 18, 1996 and not be prorated during
the transition period. 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
major 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 the Term; provided, however,
that such four-week paid vacation period shall be
prorated for the duration of calendar year 1996.
(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 the Company's 1996
Corporate Incentive Compensation Plan ("1996
Incentive Plan"), a copy of which plan has been
previously provided to Executive. Executive will
have an individual incentive target bonus under the
1996 Incentive Plan of sixty-five percent (65%) of
Executive's base salary, subject to the terms and
conditions of the 1996 Incentive Plan and prorated
for the duration of calendar year 1996.
(f) The Company will issue Executive options to purchase
Fifty Thousand (50,000) 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 the
day prior to the later of: (i) the effective date of
Executive's employment or (ii) the date the Stock
Option Committee of the Company's Board of Directors
approves the grant of such options to Executive.
These options are contingent upon the approval of the
grant by the Stock Option 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
and become immediately exercisable upon the
occurrence of a Change of Control (as hereinafter
defined).
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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 E.M. Warburg, Pincus & Co., Inc. (or any
entity controlling, controlled by or under common
control with, directly or indirectly, E.M. Warburg,
Pincus & 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, such amount to be prorated
for the duration of calendar year 1996.
(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 him in connection with the
performance of his 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 his duties,
responsibilities and obligations hereunder efficiently and to
the best of his ability. Executive agrees that he will devote
his entire working time, care and attention and best efforts to
such duties, responsibilities and obligations throughout the
Term. Executive also agrees that he 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 his 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 he
is employed by the Company, he 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.
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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 his 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 he 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 he may have
learned in connection with his 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 his 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 him or by someone else, will be the sole
exclusive property of the Company. Upon termination
of his 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 him or under his 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 him.
(c) Executive shall not, without prior written permission
of the Company, for a period of one year after the
termination of his 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 he attempt to
induce any such person, concern or entity to cease
being a customer or supplier of the Company.
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(d) Executive agrees that, at any time and from time to
time during and after the Term, he 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
his 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 him from performing
satisfactorily his 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 his beneficiary in the event of
his 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 other
than for Cause or Executive's death, 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 his 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 in order
to sustain Executive's then existing scope of medical
coverage in effect at the time 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,
(i) no portion of the Change in Control Payments
shall be taken into account which, in the opinion of
tax counsel selected by the Company and reasonably
acceptable to the Executive, does not constitute an
excess parachute payment within the meaning of
Section 280G(b)(2) of the
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Code; (ii) the Change in Control Payments are not
subject to disallowance of deductions, in the opinion
of the tax counsel referred to in clause (i); and
(iii) 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 his 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 he 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.
(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., 8180 Greensboro Drive, Suite 800, McLean,
Virginia 22102, 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 Roy Gamse, 3615 North
Kenilworth Street, Arlington, Virginia 22207 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.
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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
to which such party may be entitled. Executive shall have no
right to enforce any of his 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.
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 there 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.
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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: /s/ THOMAS WYNNE 3/18/96 By: /s/ ROY GAMSE 3/18/96
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Thomas Wynne Date Roy Gamse Date
President & Chief Operating OFFICER
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