Exhibit 10.3.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of the 1st day of
November, 2004, by and between XXXXXX COMMUNICATIONS CORPORATION, an Oklahoma
corporation (the "Company") and Xxxxxxx X. Xxxxx ("Executive").
IN CONSIDERATION of the premises and the mutual covenants set forth
below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive as Senior
Vice President and Chief Technical Officer of the Company, and Executive hereby
accepts employment, on the terms and conditions set forth in this Agreement.
2. Term. The period of employment of Executive by the Company under
this Agreement (the "Employment Period") will commence on November 1, 2004 (the
"Commencement Date") and continue through October 31, 2007 (the "Expiration
Date"). The Employment Period may be sooner terminated under Section 6 of this
Agreement.
3. Position and Duties. Executive will have those powers and duties
normally associated with the position of as Senior Vice President and Chief
Technical Officer will devote substantially all of his working time, attention
and energies (other than absences due to illness or vacation) to the performance
of his duties for the Company. Notwithstanding the above, Executive will be
permitted, to the extent such activities do not unreasonably interfere with the
performance by Executive of his duties and responsibilities under this Agreement
or violate Sections 10(a), (b) or (c) of this Agreement, to (i) manage
Executive's personal, financial and legal affairs, (ii) serve on civic or
charitable boards or committees; and (iii) serve on boards or committees of
other entities not in conflict or competition with the Company.
4. Place of Performance. The principal place of employment of Executive
will be the Company's principal executive offices in Oklahoma City, Oklahoma.
5. Compensation and Related Matters.
(a) Base Salary. During the Employment Period, the Company
will pay Executive a base salary at the rate of not less than $250,000.00 per
year ("Base Salary"), in approximately equal installments in accordance with the
Company's customary payroll practices. Executive's Base Salary may be increased,
but not decreased, pursuant to annual review by the Board. Such increased Base
Salary will then constitute the Base Salary for all purposes of this Agreement.
(b) Annual Incentive Bonus. The Board shall establish bonus
target amounts and performance goals for the Executive during each year of the
Employment Period.
(c) Welfare, Pension and Incentive Benefit Plans;
Reimbursement for COBRA Coverage. During the Employment Period, Executive (and
his spouse and/or dependents to the extent provided in the applicable plans and
programs) will be entitled to participate in and be covered under all the
welfare benefit plans or programs maintained by the
Company for the benefit of its senior executive officers pursuant to the terms
of such plans and programs, including, without limitation, all medical, life,
hospitalization, dental, disability, accidental death and dismemberment and
travel accident insurance plans and programs. In addition, during the Employment
Period, Executive will be eligible to participate in all pension, retirement,
savings and other employee benefit plans and programs maintained from time to
time by the Company for the benefit of its senior executive officers.
6. Termination. Executive's employment under this Agreement may be
terminated during the Employment Period under the following circumstances:
(a) Death. Executive's employment under this Agreement will
terminate upon his death.
(b) Disability. If, as a result of Executive's incapacity due
to physical or mental illness, Executive is substantially unable to perform his
duties under this Agreement (with or without reasonable accommodation, as
defined under the Americans With Disabilities Act), for an entire period of six
(6) consecutive months, and within thirty (30) days after a Notice of
Termination (as defined in Section 7(a)) is given after such six (6) month
period, Executive does not return to the substantial performance of his duties
on a full-time basis, the Company has the right to terminate Executive's
employment under this Agreement for "Disability", and such termination will not
be a breach of this Agreement by the Company.
(c) Cause. The Company has the right to terminate Executive's
employment for Cause, and such termination will not be a breach of this
Agreement by the Company. "Cause" means termination of employment for one of the
following reasons: (i) the conviction of the Executive by a federal or state
court of competent jurisdiction of a felony which relates to the Executive's
employment at the Company; (ii) an act or acts of dishonesty taken by the
Executive and intended to result in substantial personal enrichment of the
Executive at the expense of the Company; or (iii) the Executive's "willful"
failure to follow a direct, reasonable and lawful written directive from his
supervisor or the Board of Directors (the "Board"), within the reasonable scope
of the Executive's duties, which failure is not cured to the satisfaction of the
Board within thirty (30) days. Further, for purposes of this Section (c):
(1) No act or omission by the Executive shall be
deemed "willful" unless done, or omitted by the Executive in bad faith
and without reasonable belief that the Executive's action or omission
was in the best interest of the Company.
(2) The Executive shall not be deemed to have been
terminated for Cause unless and until the Company delivers to the
Executive a copy of the resolution duly adopted by the affirmative vote
of not less than three-fourths (3/4ths) of the entire membership of the
Board of Directors of the Company, at a meeting of the Board of
Directors called and held for such purpose (after reasonable notice to
the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board of Directors),
finding that in the good faith opinion of the Board of Directors, the
Executive was guilty of conduct set forth in clauses (i), (ii), or
(iii) above and specifying the particulars thereof in detail.
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(d) Good Reason. Executive may terminate his employment for
"Good Reason" by providing Notice of Termination to the Company within one
hundred and twenty (120) days after Executive has actual knowledge of the
occurrence, without the written consent of Executive, of one of the events set
forth below, and such termination will not be a breach of this Agreement:
(1) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including
status, offices, titles and reporting requirements), authority, duties
or responsibilities;
(2) the reduction of the rate of the Executive's Base
Salary below the amount specified in Section 5(a) other than as a part
of compensation reduction program which applies equally to all
executives at the Vice President and above levels;
(3) the Company requiring the Executive to be based
at any office or location outside of the greater Oklahoma City,
Oklahoma, metropolitan area or outside the metropolitan area where the
Executive is regularly employed at the date of this Agreement except
for travel reasonably required in the performance of the Executive'
responsibilities; provided, transfer of the Executive from any location
to Oklahoma City, Oklahoma shall not be a violation of this Section
6(d)(3);
(4) any failure by the Company to comply with and
satisfy Section 12(a) herein; or
(5) termination in accordance with Subsection 6(e).
(e) Voluntary Termination Following Any Management Change.
Executive may terminate his employment for any reason following the first
anniversary of the effective date of any Management Change. A "Management
Change" means the termination or replacement of either the current Chief
Executive Officer or Chief Operating Officer followed by the hiring or selection
of a replacement for either such position during the term of this Agreement. The
effective date of a Management Change shall be the date the Company employs or
selects a replacement for either the current Chief Executive Officer or Chief
Operating Officer.
(f) Without Cause. The Company has the right to terminate
Executive's employment under this Agreement without Cause by providing Executive
with a Notice of Termination, and such termination will not in and of itself be
a breach of this Agreement.
(g) Voluntary Termination. The Executive may voluntarily
terminate employment with the Company at any time, and if such termination is
not for Good Reason or as provided in Section 6(e) above, then, the Executive
shall be only entitled to compensation and benefits as described in Section 8(b)
hereof.
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7. Termination Procedure.
(a) Notice of Termination. Any termination of Executive's
employment by the Company or by Executive during the Employment Period (other
than termination pursuant to Section 6(a)) will be communicated by written
Notice of Termination to the other party in accordance with Section 14. For
purposes of this Agreement, a "Notice of Termination" means a written notice
which indicates the specific termination provision in this Agreement relied upon
and sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment.
(b) Date of Termination. "Date of Termination" shall mean (i)
if Executive's employment is terminated by his death, the date of his death,
(ii) if Executive's employment is terminated due to Disability pursuant to
Section 6(b), thirty (30) days after Notice of Termination (provided that
Executive has not returned to the substantial performance of his duties on a
full-time basis during such thirty (30) day period), (iii) if Executive's
employment is terminated for Good Reason pursuant to Section 6(d), the date
provided in such Section, or (iv) if Executive's employment is terminated for
any other reason, the date on which a Notice of Termination is given or any
later date (within thirty (30) days after the giving of such Notice of
Termination) set forth in such Notice of Termination.
8. Compensation Upon Termination or During Disability. In the event of
Executive's Disability or termination of his employment under this Agreement
during the Employment Period, the Company will provide Executive with the
payments and benefits set forth below. The Executive agrees that the Company has
the right to deduct any amounts owed by the Executive to the Company for any
reason, including, without limitation, due to the Executive's misappropriation
of Company funds, from the payments set forth in this Section 8.
(a) Termination By Company without Cause or By Executive for
Good Reason. If Executive's employment is terminated by the Company without
Cause or by Executive for Good Reason:
(i) the Company will pay to Executive in a single
lump sum payment (A) his Base Salary and accrued vacation pay through
the Date of Termination, as soon as practicable following the Date of
Termination, and (B) the product obtained by multiplying the
Executive's Average Annual Compensation by two (2), unless the
termination is by the Executive under the provisions of Section 6(e),
in which event the multiplier shall be one (1). For purposes of this
Agreement Average Annual Compensation is the average of the Executive's
annual compensation, base salary and bonus, for the two year period
immediately preceding the date of this Agreement;
(ii) at its sole option, to be exercised on or before
the Date of Termination, the Company shall either (i) pay the Executive
a sum equal to eighteen (18) times the lesser of either the monthly
cost of COBRA coverage applicable to Company or $1,200.00, or (ii)
maintain in full force and effect, for the continued benefit of
Executive (and his spouse and/or his dependents, as applicable) for a
period of eighteen (18) months following the Date of Termination the
medical, hospitalization, and dental programs, in which Executive (and
his spouse and/or his dependents, as applicable) participated
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immediately prior to the Date of Termination at the level in effect and
upon substantially the same terms and conditions (including without
limitation contributions required by Executive for such benefits) as
existed immediately prior to the Date of Termination; provided, if the
Executive (or his/her spouse) is eligible for Medicare or a similar
type of governmental medical benefit, such benefit shall be the primary
provider before Company medical benefits are provided. If Executive (or
his spouse and/or his dependents) cannot continue to participate in the
Company programs providing such benefits, the Company shall arrange to
provide Executive (and his spouse and/or his dependents, as applicable)
with the economic equivalent of such benefits which they otherwise
would have been entitled to receive under such plans and programs
("Continued Benefits"). However, if Executive becomes reemployed with
another employer and is eligible to receive medical, hospitalization
and dental benefits under another employer - provided plan, the
medical, hospitalization and dental benefits described herein shall be
secondary to those provided under such other plan during the applicable
period;
(iii) except where the Termination for Cause is under
the provisions of Section 6(e), the Company will amend Executive's
outstanding agreements under the Company's stock option plans to
accelerate his vesting to be fully vested and to extend his exercise
period to one year from Date of Termination;
(iv) the Company will reimburse Executive, pursuant
to the Company's policy, for reasonable business expenses incurred, but
not paid, prior to the Date of Termination; and
(v) Executive will be entitled to any other rights,
compensation and/or benefits as may be due to Executive following such
termination to which he is otherwise entitled in accordance with the
terms and provisions of any plans or programs of the Company
(b) Cause or By Executive Without Good Reason. If
Executive's employment is terminated by the Company for Cause or by
Executive without Good Reason:
(i) the Company will pay Executive his Base Salary
and his accrued vacation pay (to the extent required by law or the
Company's vacation policy) through the Date of Termination, as soon as
practicable following the Date of Termination;
(ii) the Company will reimburse Executive, pursuant
to the Company's policy, for reasonable business expenses incurred, but
not paid, prior to the Date of Termination, unless such termination
resulted from a misappropriation of Company funds; and
(iii) Executive will be entitled to any other rights,
compensation and/or benefits as may be due to Executive following
termination to which he is
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otherwise entitled in accordance with the terms and provisions of any
plans or programs of the Company.
(c) Disability. During any period that Executive fails to
perform his duties under this Agreement as a result of incapacity due to
physical or mental illness ("Disability Period"), Executive will continue to
receive his full Base Salary set forth in Section 5(a) until his employment is
terminated pursuant to Section 6(b). In the event Executive's employment is
terminated for Disability pursuant to Section 6(b):
(i) the Company will pay to Executive (A) his Base
Salary and accrued vacation pay through the Date of Termination, as
soon as practicable following the Date of Termination, and (B) provide
Executive with disability benefits pursuant to the terms of the
Company's disability programs and/or practices;
(ii) the Company will reimburse Executive, pursuant
to the Company's policy, for reasonable business expenses incurred, but
not paid, prior to the Date of Termination; and
(iii) Executive will be entitled to any other rights,
compensation and/or benefits as may be due to Executive following such
termination to which he is otherwise entitled in accordance with the
terms and provisions of any plans or programs of the Company.
(d) Death. If Executive's employment is terminated by his
death the Company will pay in a lump sum to Executive's beneficiary, legal
representatives or estate, as the case may be, Executive's Base Salary, accrued
vacation and unreimbursed business expenses and amounts due under any plans,
programs or arrangements of the Company through the Date of Termination.
9. Mitigation. Executive will not be required to mitigate amounts
payable under this Agreement by seeking other employment or otherwise, and there
will be no offset against amounts due Executive under this Agreement on account
of subsequent employment except as specifically provided herein.
10. Confidential Information, Ownership of Documents.
(a) Confidential Information. Executive will hold in a
fiduciary capacity for the benefit of the Company all trade secrets and
confidential information, knowledge or data relating to the Company and its
businesses and investments and its Affiliates, obtained by Executive during
Executive's employment by the Company and which is not generally available
public knowledge (other than by acts by Executive in violation of this
Agreement).
(b) Removal of Documents; Rights to Products; Other Property.
All records, files, drawings, documents, models, equipment, and the like
relating to the Company's business and its affiliates, which Executive has
control over may not be removed from the Company's premises without its written
consent, unless removal is in the furtherance of the Company's business or is in
connection with Executive's carrying out his duties under this
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Agreement and, if so removed, shall be returned to the Company promptly after
termination of Executive's employment under this Agreement.
(c) Nonsolicitation. Executive agrees that if he is entitled
to payment from the Company calculated under the provisions of Subsection 8(a),
he will not for the twenty-four-month period following termination solicit, for
his benefit or the benefit of anyone else, any current customers or employees of
the Company or attempt to induce those customers or employees to cease, as
applicable, doing business with or being employed by the Company or its
affiliates.
(d) Injunctive Relief. In the event of a breach or threatened
breach of this Section 10, Executive agrees that the Company shall be entitled
to injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, Executive acknowledges that damages would be
inadequate and insufficient.
(e) Continuing Operation. Except as specifically provided in
this Section 10, the termination of Executive's employment or of this Agreement
will have no effect on the continuing operation of this Section 10.
(f) Additional Related Agreements. Executive agrees to sign
and to abide by the provisions of any additional agreements, policies or
requirements of the Company related to the subject of this Section 10.
11. Arbitration; Legal Fees and Expenses. The parties agree that
Executive's employment and this Agreement relate to interstate commerce, and
that any disputes, claims or controversies between Executive and the Company
which may arise out of or relate to the Executive's employment relationship or
this Agreement shall be settled by arbitration. This agreement to arbitrate
shall survive the termination of this Agreement. Any arbitration shall be in
accordance with the Rules of the American Arbitration Association and undertaken
pursuant to the Federal Arbitration Act. Arbitration will be held in Oklahoma
City, Oklahoma unless the parties mutually agree on another location. The
decision of the arbitrator(s) will be enforceable in any court of competent
jurisdiction. The parties agree that punitive, liquidated or indirect damages
shall not be awarded by the arbitrator(s) unless such damages would have been
awarded by a court of competent jurisdiction. Nothing in this agreement to
arbitrate, however, shall preclude the Company from obtaining injunctive relief
from a court of competent jurisdiction prohibiting any on-going breaches by
Executive of this Agreement including, without limitation, violations of Section
10. If any contest or dispute arises between the Company and Executive regarding
any provision of this Agreement, the Company will reimburse Executive for all
legal fees and expenses reasonably incurred by Executive in connection with such
contest or dispute. Such reimbursement will be made as soon as practicable
following the final, non-appealable resolution of such contest or dispute to the
extent the Company receives reasonable written evidence of such fees and
expenses.
12. Agreement Binding on Successors.
(a) Company's Successors. No rights or obligations of the
Company under this Agreement may be assigned or transferred except that the
Company will require any successor (whether direct or indirect, by purchase,
merger, reorganization, sale, transfer of stock,
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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 succession had taken place. As used in this Agreement,
"Company" means the Company as hereinbefore defined and any successor to its
business and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 12 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) Executive's Successors. No rights or obligations of
Executive under this Agreement may be assigned or transferred by Executive other
than his rights to payments or benefits under this Agreement, which may be
transferred only by will or the laws of descent and distribution. Upon
Executive's death, this Agreement and all rights of Executive under this
Agreement shall inure to the benefit of and be enforceable by Executive's
beneficiary or beneficiaries, personal or legal representatives, or estate, to
the extent any such person succeeds to Executive's interests under this
Agreement. Executive will be entitled to select and change a beneficiary or
beneficiaries to receive any benefit or compensation payable under this
Agreement following Executive's death by giving the Company written notice
thereof in a form acceptable to the Company. In the event of Executive's death
or a judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his beneficiary(ies),
estate or other legal representative(s). If Executive should die following his
Date of Termination while any amounts would still be payable to him under this
Agreement if he had continued to live, all such amounts unless otherwise
provided shall be paid in accordance with the terms of this Agreement to such
person or persons so appointed in writing by Executive, or otherwise to his
legal representatives or estate.
13. Section 280G Limitations. Anything in this Agreement to the
contrary notwithstanding, in the event it is determined that any payment or
distribution by the Company to or for the benefit of the Executive, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, including, by example and not by way of limitation,
acceleration by the Company of the date of vesting or payment or rate of payment
under any plan, program or arrangement of the Company, would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") or any interest or penalties with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive a "280G Gross-Up Payment." For purposes of this
Agreement, a "280G Gross-Up Payment" shall be calculated as an amount equal to
the Executive's liability for such excise tax(es) and any income tax(es)
attributable to such excise tax liability (including any interest or penalty
thereon) so that after payment by the Executive of all taxes (including interest
and penalties), the Executive has not suffered any adverse economic consequence
due to the imposition of such excise tax(es) and income tax(es) thereon. The
amount of 280G Gross-Up Payment to which the Executive is entitled under this
Section shall be determined by the accounting firm retained by the Company.
14. Notice. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered either personally or by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
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If to Executive:
At his last known address evidenced on the Company's payroll records.
If to the Company:
Xxxxxx Communications Corporation
00000 Xxxxxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Attention: Chief Executive Officer
or to such other address as any party may have furnished to the others in
writing in accordance with this Agreement, except that notices of change of
address shall be effective only upon receipt.
15. Withholding. All payments hereunder will be subject to any required
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.
16. Miscellaneous. No provisions of this Agreement may be amended,
modified, or waived unless agreed to in writing and signed by Executive and by a
duly authorized officer of the Company. No waiver by either party of any breach
by the other party of any condition or provision of this Agreement shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time. The respective rights and obligations of the
parties under this Agreement shall survive Executive's termination of employment
and the termination of this Agreement to the extent necessary for the intended
preservation of such rights and obligations. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Oklahoma without regard to its conflicts of law principles.
17. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement will not affect the validity or enforceability of
any other provision of this Agreement, which will remain in full force and
effect.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
19. Section Headings. The section headings in this Agreement are for
convenience of reference only, and they form no part of this Agreement and will
not affect its interpretation.
20. Entire Agreement. Except as provided elsewhere herein, this
Agreement sets forth the entire agreement of the parties with respect to its
subject matter and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party to this
Agreement with respect of such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
XXXXXX COMMUNICATIONS CORPORATION,
an Oklahoma corporation
By _________________________________________
______________________________ President
"COMPANY"
____________________________________________
Xxxxxxx X. Xxxxx
Senior Vice President and Chief Technical
Officer
"EXECUTIVE"
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