XO Communications has filed a golden parachute provision with the SEC in the event of a change in control at the company.
Qwest is said to be interested in possibly acquiring XO. A source recently told Network World that Qwest was performing due diligence on the Reston, Va., carrier.
XO filed an 8-K on June 8 detailing a change of control severance plan for certain covered executives, director and above.
“The Compensation Committee of the Board of Directors of XO Communications, Inc. recognizes that the possibility of a Change in Control exists and that the threat, or the occurrence, of a Change in Control can result in significant distraction of its personnel,” the filing states. “Because of the uncertainties inherent in such a situation the Company desires to establish this Change in Control Severance Plan for Certain Covered Executives of XO Communications, Inc. to provide the Participants with certain benefits in the event of certain terminations of their employment in connection with a Change in Control.”
XO’s CEO, COO and other senior executives will be eligible for 18 months severance while the company’s sales and non-sales vice presidents will receive 12 months. Directors will receive six months severance, according to the filing.
Directors and executives will also receive accrued salary and vacation pay, and bonuses. The Carrier and Indirect Sales presidents shall have a bonus target calculated at 40% of base salary, and the Commercial Sales president shall have a bonus target calculated at 55% of base salary, according to the filing.
Qwest is looking to accumulate smaller assets after having its higher offers rebuffed several times by MCI in favor of Verizon.
XO’s market capitalization is $404 million. Revenue for the first quarter of this year, ended March 31, was $361.5 million, an increase of 39% from the first quarter of last year. Consolidated net loss for the first quarter of this year was $42.9 million, an improvement of $5.6 million compared with a net loss of $48.5 million in the same period last year.
