EXHIBIT 10.4
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EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (this "Agreement") made as of this 23rd day of
February, 1996 by and between XXXX XXXXXXXXXX residing at the address indicated
following his signature below (hereinafter referred to as "Employee") and CS
WIRELESS SYSTEMS, INC., a Delaware corporation having a place of business at 000
Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx 00000 (hereinafter referred to as the
"Company ").
1. Employment. The Company hereby employs Employee and Employee agrees to
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work for the Company as Chief Executive Officer and President of the Company
during the Term (as defined below) of and upon the terms and conditions set
forth in this Agreement. The Company shall recommend, and shall propose all
action necessary in accordance with applicable law and its Articles of
Incorporation and By-Laws to effect, Employee' s addition to the Board of
Directors of the Company and his appointment to the Company's Management Group.
2. Compensation/Benefits. (a) Base Salary. During the Term of this
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Agreement as defined below the Company agrees to pay Employee a base annual
salary of $200,000 ("Base Salary"). Such Base Salary shall be reviewed no less
frequently than annually during the Term and may be increased but not decreased
by the Board of Directors. Such Base Salary shall be payable in accordance with
the Company's normal business practices or in such other amounts and at such
other times as the parties may mutually agree.
(b) Incentive Compensation. The Company shall establish an executive
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incentive program, governed by the Compensation Committee of the Board of
Directors, in which Employee shall be entitled to participate and pursuant to
which Employee shall be provided a meaningful bonus opportunity.
(c) Stock Options. Employee is hereby granted, as of the date hereof, stock
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options (the "Stock Options") to purchase up to 215,054 shares of Company common
stock, $.001 par value per share. The Stock Options shall be exercisable at a
price equal to $9.40 per share and shall vest in monthly installments as
provided therein, ending upon the expiration or earlier termination of this
Agreement.
(d) Benefits/Vacation. During the Term, the Company shall provide Employee
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with such other benefits, including executive incentive and bonus plans and
medical and disability plans, as are made generally available to executive
employees of the Company from time to time. Employee shall be entitled to five
weeks vacation during each year of the Term.
(e) Life Insurance. Subject to Employee submitting to any required physical
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examinations and provided such policy can be obtained at customary premiums, the
Company shall purchase a term insurance policy with the face amount of
$1,000,000 on the life of Employee and shall permit Employee to designate the
beneficiary thereof.
3. Services. Employee agrees to devote substantially all his working
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time, attention and energies to the business of the Company and its Affiliates
(as defined below)
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under the general direction of the Management Group of the Company and its Board
of Directors and hereby agrees to abide by and implement the Company 's
Strategy, Principles and Governance Parameters attached hereto as Annex B, as
they may be amended from time to time by the Management Group of the Company or
its Board, at their sole discretion. Employee shall not, without the prior
written consent of the Company, directly or indirectly, during the Term of this
Agreement, render services, for compensation or otherwise, to or for any other
person or firm in direct competition with the business of the Company in any
market served by the Company or its Affiliates without the consent of the Board
of Directors. Notwithstanding the foregoing, Employee may provide consulting
services to and serve as a marker of the Board of Directors of CAI Wireless
Systems, Inc. Employee shall be available for reasonable business travel,
including travel to the other offices of the Company, but shall be based in the
greater Philadelphia, Pennsylvania area during the Term.
4. Term. The term of this Agreement (the "Term") shall be for a period
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beginning on the date hereof and continuing until the thirty-month anniversary
of this Agreement, and shall be automatically renewed annually thereafter unless
either party gives notice to the other of its intention not to renew this
Agreement not less than sixty (60) days prior to the expiration of the term or
unless this Agreement shall be terminated prior thereto pursuant to Paragraph 5
below.
5. Early Termination. (a) General. Employee's employment hereunder shall
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be terminated and, subject to the terms set forth in this subparagraph 5(a), the
Company's obligations hereunder shall cease, (i) without the necessity of
notice, upon the death of Employee, or (ii) upon written notice of a finding by
at least 60 % of the members of the Board of Directors (excluding Employee) that
Employee has (A) acted with gross negligence or willful misconduct in connection
with the performance of his duties hereunder, (B) engaged in a material act of
insubordination or of common law fraud against the Company or its employees, or
(C) acted against the best interests of the Company in a manner that has an
adverse affect on the financial condition of the Company (death of Employee or
any such finding is referred to herein as "Cause"). Upon any termination of
Employee's employment, the Term of this Agreement shall expire the vesting of
any Stock Options shall cease, and the obligation to pay any other compensation
for any period after the date of termination shall cease, except as provided in
the following sentence. The Company may terminate Employee's employment other
than for Cause or by reason of the expiration of the Term, in which case
Employee shall be entitled to severance in an amount (the "Severance Amount")
equal to the Base Salary that would have been payable for the balance of the
Term but for such termination or expiration. The foregoing shall be payable upon
execution of releases acceptable to Employee and the Company.
(b) Disability. If Employee shall become unable to efficiently perform the
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essential functions of his job, even with reasonable accommodation, as a result
of a disability
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or illness, as such terms are defined by the Americans with Disabilities Act, he
shall be entitled to his regular compensation until the total period of
disability or illness (whether or not continuous and whether or not the same
disability or illness) shall exceed sixty (60) days during any calendar year in
the Employment Period. This Agreement may thereafter be terminated by the
Company and the Company's obligations hereunder shall cease, provided, however,
the obligation to pay Base Salary shall continue for the six months next
following the month in which this Agreement was so terminated. Any amounts
payable as compensation during the period of disability or illness shall be
reduced by any amounts paid during such period under any disability plan or
similar insurance of the Company.
(c) Employee 's Right to Terminate. Employee may, at any time during the
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first twenty-four months of the Term, resign. Upon such resignation, Employee
shall be entitled to payment by the Company in an amount equal to six months'
Base Salary, payable in six equal monthly installments thereafter, and the
Company shall purchase the vested Options as the date of such resignation for
the fair market value of such Options.
6. Employer's Authority. Employee agrees to observe and comply with the
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rules and regulations of the Company as adopted by the Management Group of the
Company or by the Board of Directors respecting the performance of his duties
and to carry out and perform orders, directions and policies communicated to him
from time to time.
7. Expenses. During the Term, the Company shall reimburse Employee for
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the reasonable business expenses approved in advance incurred by Employee in the
course of performing his duties for the Company hereunder in accordance with the
procedures then in place for such reimbursement.
8. Automobile. During the Term, the Company shall assume the obligations
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of CAI Wireless Systems, Inc. ("CAI") under an automobile lease entered into for
the benefit of Employee, until the expiration of the term of such lease.
9. Non-Disclosure Agreement/Non-Competition. (a) Employee will execute
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the Nondisclosure Agreement of the Company attached as Annex A hereto and made a
part hereof. Said agreement shall survive termination of employment hereunder.
The parties acknowledge that Employee is a party to a non-disclosure agreement
with CAI Wireless Systems, Inc. and nothing herein shall be interpreted to be
inconsistent with Employee's obligation thereunder.
(b) Because Employee's services to the Company are special and because
Employee has access to the Company's confidential information, Employee
covenants and agrees that if this Agreement is terminated, for any reason
whatsoever, whether because of the expiration of the Term or otherwise, for a
period of twelve (12) months following such termination he will not, directly or
indirectly, either on his own behalf or on behalf of any
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person, partnership, corporation or otherwise, (i) engage in any business or
undertaking in the wireless cable television, direct broadcast satellite,
direct-to-home or non-wired video programming businesses (the "Related
Businesses") competitive with those being carried on by the Company or any
Affiliate in any market serviced by the Company or any Affiliate at the time of
termination, (ii) be employed by or provide consulting services to or be an
investor, limited partner or shareholder (other than one owning less than a 5 %
equity interest) in, any entity or other person in any Related Business within
25 miles of any city in which the Company or any Affiliate does business at time
of execution or has rights to broadcast or transmit television programming or in
which the Company has a transmission license at the time of termination, without
the prior written consent of the Board of Directors. The parties agree that the
time period and geographical area of noncompetition specified above are
reasonable and necessary in light of the transactions entered into in this
Agreement. If, however, it shall be determined at any time by a court of
competent jurisdiction that either the time period restriction or the
geographical area restriction, or both, are invalid or unenforceable, the
parties agree that any such restriction valid and enforceable in the
determination of said court, and such restriction, as so amended, shall be
enforceable between the parties to the same extent as if such amendment had been
made as of the date of this Agreement. This subparagraph 9(b) shall survive the
termination of this Agreement.
10. Relocation. Employee will not be required to relocate from Philadelphia,
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Pennsylvania in order to perform his duties hereunder.
11. Notices. Any notice permitted or required hereunder shall be deemed
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sufficient when hand-delivered or mailed by certified mail, postage prepaid, and
addressed if to the Company at the address indicated above and if to Employee at
the address indicated below (or to such other address as may be provided by
notice).
12. Miscellaneous. This Agreement (i) constitutes the entire agreement
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between the parties concerning the subjects hereof and supersedes any and all
prior agreements or understandings, (ii) may not be assigned by Employee without
the prior written consent of the Company, (iii) may be assigned by the Company
and shall be binding upon, and inure to the benefit of, the Company's successors
and assigns and (iv) supersedes any prior or existing employment agreement with
CAI and such employment agreement shall be of no further force and effect and
all options to purchase CAI common stock thereunder have been surrendered by
Employee. Headings herein are for convenience of reference only and shall not
define, limit or interpret the contents hereof
13. Amendment. This Agreement may be amended, modified or supplemented by
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the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
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14. Specific Performance. The parties acknowledge that the Company would be
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irreparably damaged and there would be no adequate remedy at law for Employee's
breach of Paragraph 9 of this Agreement, and accordingly, the terms thereof
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shall be specifically enforced. Employee hereby consents to the entry of any
temporary restraining order or preliminary or ex parte injunction, in addition
to any other remedies available at law or in equity, to enforce the provisions
hereof.
15. Affiliates. As used herein, the term "Affiliate" shall mean any
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individual or entity controlling, or under common control with the Company, now
or in the future, including without limitation, partnerships in which the
Company or any Affiliate may invest as a limited or general partner and limited
liability companies in which the Company or any Affiliate may become a member.
16. Severability. The provisions of this Agreement are severable. The
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invalidity of any provision shall not affect the validity of any other
provision.
17. Governing Law. This Agreement shall be construed and regulated in all
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respects under the laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and year
first above written.
CS WIRELESS SYSTEMS, INC.
By /s/
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Its
EMPLOYEE:
/s/ Xxxx Xxxxxxxxxx
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Name: Xxxx Xxxxxxxxxx
Address:
Annex A
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NONDISCLOSURE AGREEMENT
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AGREEMENT made as of the 23rd day of February, 1996, by and between the
undersigned individual residing at the address indicated following his signature
below (hereinafter referred to as "Employee") and CS WIRELESS SYSTEMS, INC., a
Delaware corporation, having its principal place of business at 000 Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx 00000 (hereinafter referred to as
"Employer").
WHEREAS, Employee is being employed by Employer in a capacity wherein
Employee will come into possession of material of a confidential, sensitive or
proprietary nature concerning the business, plans and trade secrets of Employer
and its Affiliates (as defined below) and of third parties; and
WHEREAS, the continued confidential treatment of such information is vital
to the success of Employer' s business,
NOW THEREFORE, the parties agree as follows:
1. Employee acknowledges that his work as an employee of Employer will bring
him into close contact with the Confidential Information (as defined below) of
Employer and of third parties. Employee acknowledges that such Confidential
Information is reposed in him in trust.
2. Employee hereby agrees that he shall, both during and after his
employment, maintain such Confidential Information in confidence and neither
disclose to others (nor cause to be disclosed) nor use personally (nor cause to
be used) such Confidential Information without the prior written permission of
Employer. Employee will also take reasonable precautions to prevent the
inadvertent exposure of Confidential Information to unauthorized persons or
entities.
3. Employee acknowledges that he may, during his employment, add to
Employer' s Confidential Information and he agrees that any such additions shall
fall within the strictures of this Agreement.
4. Employee agrees that upon any termination of his employment with Employer
or any Affiliate thereof, or upon request if sooner, he shall forthwith return
to Employer all reports, correspondence, notes, financial statements, computer
printouts and other documents and recorded material of every nature (including
all copies thereof) which may be in his possession or under his control dealing
with Confidential Information.
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5. All inventions, discoveries, improvements, computer software, firmware,
programs, documentation, manuals and other works or authorship (collectively
referred to as "Intellectual Property"), whether or not copyrightable or
patentable, made, created, developed, written or conceived by Employee during
the course of Employee's employment by the Employer will be deemed work made for
hire, whether made solely or jointly with another. All such Intellectual
Property will be the property of the Employer. Employee hereby assigns to the
Employer all right, title and interest in and to all right, title and interest
in and to all Intellectual Property.
6. Employee will, without charge to the Employer but at its expense, execute
a specific assignment of title to Employer and do anything else reasonably
necessary to enable the Employer to secure a patent, copyright or other form of
protection for said Intellectual Property anywhere in the world.
7. Employee acknowledges that the covenants in this Agreement have existed
since the commencement of his employment with Employer. These covenants are
expressions of his duty as an employee not to use the Confidential Information
to the detriment of Employer. In addition, Employee acknowledges that he shall
benefit from entry into this Agreement as Employer shall be willing to continue
to provide access to Confidential Information to Employee.
8. EMPLOYEE ACKNOWLEDGES THAT EMPLOYER WOULD BE IRREPARABLY DAMAGED AND
THERE WOULD BE NO ADEQUATE REMEDY AT LAW FOR EMPLOYEE'S BREACH OF THIS
AGREEMENT, AND ACCORDINGLY, THE TERMS OF THIS AGREEMENT SHALL BE SPECIFICALLY
ENFORCED. EMPLOYEE HEREBY CONSENTS TO THE ENTRY OF ANY TEMPORARY RESTRAINING
ORDER OR PRELIMINARY OR EX PARTE INJUNCTION, IN ADDITION TO ANY OTHER REMEDIES
AVAILABLE AT LAW OR IN EQUITY, TO ENFORCE THE PROVISIONS HEREOF.
9. This Agreement is not an agreement of employment and nothing herein shall
be construed to obligate Employer to employ Employee for any definite duration
or upon any specific terms.
10. As used herein, "Confidential Information" shall mean all confidential
information and trade secrets of Employer or any of its Affiliates, whether now
existing or hereafter acquired or developed, including, without limitation,
financial statements, business plans, working methods, investments, materials,
processes, programs, designs, drawings, names of and relationships with current
or potential vendors and lenders and other third parties, contractual
arrangements, profit formulas, experimental investigations, studies, current or
potential customer names and requirements, current or potential professional
associations or
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contacts, information submitted to Employer or its Affiliates by third parties
on a confidential basis and similar other non-public or otherwise confidential,
sensitive or proprietary information. "Confidential Information" shall not
include information that has become generally known within the wireless cable
industry without breach of any obligation of confidentiality of Employee or any
third party.
11. As used herein, the term "Affiliate" shall mean any individual or entity
controlling, controlled by or under common control with the Employer, now or in
the future, including without limitation, partnerships in which Employer or any
Affiliate may invest as a limited or general partner and limited liability
companies in which Employer or any Affiliate may become a member.
12. This Agreement shall survive the termination of the employment of
Employee and shall not be amended except by a writing signed by the parties
hereto. This Agreement shall be binding upon the Employee and his heirs, legal
representatives, successors and assigns.
13. This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
CS WIRELESS SYSTEMS, INC. EMPLOYEE:
By /s/ /s/ Xxxx Xxxxxxxxxx
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Its Xxxx Xxxxxxxxxx
Address:
FIRST AMENDMENT (this "Amendment")to Employment Agreement made as of the
23rd day of February 1996 by and between Xxxx Xxxxxxxxxx and CS Wireless Systems
Inc. (the "Agreement") is made and entered as of the 1st day of May, 1996. Terms
not otherwise defined have the meaning set forth in the Agreement.
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby enter this Amendment to amend the
Agreement as follows:
1. PARAGRAPHS 1 AND 3. Employee and the Company, by action of the Board of
Directors of even date herewith, have agreed that Employee shall cease serving
the Company in the capacity as Chief Executive Officer and President and,
instead has been appointed Vice-Chairman of the Board of Directors and a member
of its newly formed Acquisitions & Strategic Combinations Committee. In the
latter capacity, Employee shall continue to be an employee of the Company, with
the same salary and benefits as provided in the Agreement, for the balance of
the Term. Employee's responsibilities shall include participation in the
negotiation, review and due diligence of acquisitions and strategic combinations
and such additional responsibilities as may be delegated by the Board of
Directors from time to time through its Chairman, including with respect to
coordination of FCC license and lease compliance. Employee shall have full power
and authority to execute and bind the Company with respect to such acquisitions,
dispositions and strategic combinations as are approved from time to time by the
Board of Directors and with respect to such additional matters as may be
specifically delegated by written authorization of the Board of Directors,
through its Chairman. To the extent inconsistent with the foregoing, Paragraphs
1 and 3 of the Agreement are hereby amended.
2. PARAGRAPH 2(c). By action of the Compensation Committee of the Board of
Directors of even date herewith, vesting of one half of Employee's Stock Options
are accelerated and fully vested as of the date hereof, with the balance of the
Stock Options vesting in equal monthly installments over the balance of the
term, all of which shall be reflected in an amended and restated Option
Agreement.
3. Except as amended by, or inconsistent with, this Amendment, the terms of the
Agreement remain in full force and effect and are hereby ratified.
IN WITNESS WHEREOF, this Amendment is entered into as of the date and year
first above written.
CS WIRELESS SYSTEMS, INC
By /s/
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Its
/s/ Xxxx Xxxxxxxxxx
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XXXX XXXXXXXXXX
