EXHIBIT 10.2
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made November 12, 1999, by and between TE MERGER
CORPORATION (the "Company"), a Pennsylvania corporation, and XXXXX X. XXXXXXXX
(the "Employee"), of State College, Centre County, Pennsylvania.
BACKGROUND
Pursuant to an Agreement and Plan of Merger dated November 3, 1999, by and
among Conestoga Enterprises, Inc. ("CEI"), TeleBeam, Incorporated ("TeleBeam")
and the Company, TeleBeam in the near future will be merged with and into the
Company, which will be the surviving corporation. Pursuant to such plan of
merger (the "Plan of Merger"), as of the Effective Date of the merger specified
therein (the "Effective Date"), the corporate name of the Company will become
"TeleBeam, Incorporated". The Employee is currently Senior Vice President of
Finance and Chief Financial Officer of TeleBeam and the parties have agreed that
she shall be employed by the Company as of the Effective Date under the terms
and provisions contained in this Agreement.
AGREEMENT
Therefore, each intending to be legally bound hereby, the parties agree as
follows:
1. Employment and Employment Duties. Subject to the consummation of
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the Merger (as defined in the Plan of Merger) and as of the Effective Date,
under the terms and conditions contained in this Agreement, the Company employs
the Employee as Senior Vice President of Finance and Chief Financial Officer and
the Employee accepts such employment. The Employee's employment duties shall be
those commensurate with her position, assigned by the President of the Company.
The Employee shall report directly to the President. The Employee's employment
shall be on a full-time basis and she shall not be engaged or employed in other
business activities (whether for pecuniary advantage or not) during the term of
this Agreement, except that the Employee shall be permitted to serve on the
boards of directors of business or charitable organizations, provided such
services do not materially affect the performance of her duties hereunder. The
Employee shall discharge her employment duties in a diligent and conscientious
fashion. The principal location at which the Employee shall perform her duties
hereunder shall be at TeleBeam's offices in State College, Pennsylvania. The
principal location of the Employee's duties shall not be transferred without the
Employee's consent.
2. Term. The Employee's employment hereunder shall be for a period of
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two (2) years, commencing upon the Effective Date. Notwithstanding the
foregoing: (i) the Company may terminate the Employee's employment at any time
(A) upon fifteen (15) days prior written notice for any reason or for no reason,
or (B) without prior notice for cause (as defined below); and (ii) the Employee
may terminate the Employee's employment at any time without prior notice for any
reason or for no reason. For purposes of this Agreement, the Employee's
employment shall be deemed to have been terminated for cause in the event the
Company terminates it as a result of:
(a) the Employee's breach of her confidentiality obligations specified in
Section 5;
(b) the willful failure or refusal by the Employee to perform any of her
material employment duties or her material obligations under this Agreement
which shall not have ceased or been corrected within fifteen (15) days following
a written warning from the Company; or
(c) the commission of any act or the failure to act by the Employee which
constitutes a crime or offense involving money or other property of any of the
CEI Companies (as defined in Section 5) or which constitutes a felony in the
jurisdiction involved.
3. Severance Compensation.
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3.1 General Rule. Unless the provisions of Section 3.2 apply,
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in the event of the termination of the Employee's employment by the Company
other than for cause prior to the expiration of the two (2) year term referred
to in Section 2, the Company shall be obligated to pay to the Employee, within
fifteen (15) days after the date of termination, an amount equal to the greater
of: (i) fifty percent (50%) of the Employee's annual salary determined as of
the date of termination of employment, or (ii) the aggregate salary otherwise
payable to the Employee for the balance of the two (2) year term referred to in
Section 2, determined as of the date of termination of employment.
3.2 Change of Control. If, during the term of this Agreement,
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the Employee's employment with the Company is terminated after a change of
control (as defined below), either by the Employee or by the Company other than
for cause, the Company shall pay to the Employee, within fifteen (15) days of
the date of termination of employment, an amount equal to the greater of: (i)
the amount payable to the Employee as determined by the application of the
provisions of Section 3.1, or (ii) one and one-half (1.5) times the amount of
the
Employee's annual salary, determined as of the date of termination of
employment. The Company shall be obligated to make such payment in lieu of, and
not in addition to, the Company's payment obligations under Section 3.1. For
purposes of this Agreement, a change of control shall be deemed to have occurred
in the event of: (i) the acquisition, directly or indirectly, by any person or
entity, or persons or entities acting in concert, whether by purchase, merger,
consolidation or otherwise, of voting power over that number of voting shares of
the capital stock of either the Company or CEI which, when combined with the
existing voting power of such persons or entities, would enable them to cast
fifty percent (50%) or more of the votes which all shareholders of the Company
or CEI, respectively, would be entitled to cast in the election of directors of
either the Company or CEI, or (ii) the sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company to a transferee other than CEI
or a company or entity of which a controlling interest is owned by CEI.
3.3 Termination for Cause. In the event of the termination of
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the Employee's employment at any time by the Company for cause, the Company
shall have no obligation to pay the Employee any sums following the termination
of her employment.
4. Compensation. As compensation for the performance of her
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employment duties, during the term hereof the Company shall pay or provide to
the Employee the following:
(a) A salary in the annual amount of One Hundred Ten Thousand
Dollars ($110,000.00), payable in accordance with the Company's normal payroll
practices in effect from time to time. The Employee's salary shall be reviewed
by the Board at the same time and in the same manner as is customary for the
employees of CEI and its subsidiaries and may be increased, in the sole
discretion of the Board, based upon the Employee's satisfactory performance of
her employment duties.
(b) The provision of those fringe benefits which were provided to
the Employee in her position as Senior Vice President of Finance and Chief
Financial Officer of TeleBeam as of the Effective Date under plans or insurance
policies maintained by the Company from time to time. Such fringe benefits
include three (3) weeks paid vacation, medical health and disability insurance
coverage, inclusion in the Company's 401(k) profit sharing plan, and
reimbursement of business expenses under policies similar to those in effect
with TeleBeam.
(c) Maintenance of a life insurance policy insuring the
Employee's life in accordance with CEI's current policies.
(d) Participation in CEI's Executive Incentive Compensation Plan
and Stock Option Plan.
5. Confidentiality. The Employee acknowledges that she has had, and
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in fulfilling her duties under this Agreement she will have, access to
confidential information regarding the business and financial affairs of the
Company, CEI, and/or the other subsidiaries of CEI (collectively, the "CEI
Companies"). The Employee hereby agrees to hold all such information in the
strictest confidence, to discuss such information only with authorized personnel
of the CEI Companies, and, except as required by law or compelled by legal
process, to refrain from disclosing such information to any other party, both
during the term of this Agreement and after the termination hereof. The
provisions of this Section 5 shall not apply to information, which is or becomes
generally available to or known by the public other than as a result of
disclosure by the Employee.
6. Covenant Not to Compete. The Employee agrees that, in order to
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protect the legitimate interests and property rights of the Employer and in
consideration of the payment of Thirty-five Thousand Dollars ($35,000.00) by the
Company to the Employee on the Effective Date, for a period of one (1) year
after the termination of the Employee's employment with the Company (regardless
of the reason for the termination), the Employee shall not:
(a) Engage, directly or indirectly, either as owner, partner,
agent, employee, consultant, member, or shareholder, or otherwise operate,
control, join or participate in, lend money to, or be connected with any
commercial enterprise or business which is engaged within the Territory (as
defined below) in any facet of the telecommunications business carried on by any
of the CEI Companies as of the date of termination of the Employee's employment;
(b) Approach, solicit, contact, or otherwise establish a business
relationship with any customer of any of the CEI Companies or any prospective
customer of any of the CEI Companies with whom any of such companies has had
significant contact on or before the date of termination of the Employee's
employment, for a purpose related to the business carried on by any of the CEI
Companies as of the date of termination of the Employee's employment;
(c) Assist any other person, partnership, corporation, limited
liability company, or other entity in the pursuit of the activities from which
the Employee is prohibited in engaging under the provisions of Subsections (a)
and (b) above; or
(d) Induce by active solicitation any present or future employees
or agents of the Company or the other CEI Companies to directly or indirectly
engage in any competitive business or to terminate their employment with any of
the CEI Companies.
For purposes of this Agreement, the term "Territory" shall mean those
geographical areas encompassed by the State College, Reading, Pottsville,
Sunbury, and Williamsport Basic Trading Areas, as defined by the Federal
Communications Commission for the issuance of personal communication services
licenses. Nothing contained in this Section 6 shall prohibit the Employee from:
(i) investing in and owning securities issued by any publicly-held company which
are traded on any recognized securities exchange or in the over-the-counter
market; or (ii) accepting employment, after termination of her employment with
the Company, with a customer of the Company which is not a significant customer.
7. Equitable Relief. The Employee recognizes and agrees that, in the
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event of a breach or threatened breach of her covenants and obligations
contained in Section 5 and/or Section 6 of this Agreement, the Company will
suffer irreparable harm and damage, that such harm and damage may be extremely
difficult or impossible to quantify, and that therefore the Company shall be
entitled to injunctive relief. Nothing contained herein, however, shall be
construed as precluding the Company from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of damages at
law.
8. Restrictions Excessive. In the event the restrictions imposed by
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the covenant contained in Section 6 are deemed by any court having jurisdiction
to be unreasonable or otherwise unenforceable by reason of their duration,
territory or the scope of the activities prohibited, it is agreed by the parties
that such court may construe and enforce this Agreement by reducing the time
period, territory, or scope of activities to an extent which such court deems to
be reasonable and enforceable.
9. Arbitration. Except as otherwise provided in Section 7 hereof, any
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claim or controversy between the parties arising out of or relating to this
Agreement shall be settled by a single arbitrator in an arbitration held in
Harrisburg, Pennsylvania in accordance with the then-governing commercial rules
of the American Arbitration Association. The judgment of the arbitrator shall
be final and binding on the parties, and may be entered and enforced in any
court of competent jurisdiction.
10. Severability. If any provision or provisions of this Agreement
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shall be deemed to contravene or be invalid under the laws of any jurisdiction
where this Agreement is in force, the parties agree that such contravention
or invalidity shall not invalidate the entire Agreement, but it shall be
construed as not containing the particular provision or provisions held to be
invalid and the rights and obligations of the parties shall be construed and
enforced accordingly.
11. Notices. All notices, consents, waivers or other communications
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which are required or permitted hereunder shall be sufficient if given in
writing and delivered personally, by overnight mail service, by facsimile
transmission (which is confirmed) or by registered or certified mail, return
receipt requested, postage prepaid, as follows (or to such other addressee or
address as shall be set forth in a notice given in the same manner):
If to the Company:
c/o Conestoga Enterprises, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, President
(000) 000-0000 (Fax)
With a required copy to:
Barley, Snyder, Xxxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx
P. O. Xxx 000
Xxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esquire
(000) 000-0000 (Fax)
If to the Employee:
Xxxxx X. Xxxxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
(000) 000-0000
With a required copy to:
Saul, Ewing, Xxxxxx & Xxxx
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esquire
(000) 000-0000 (Fax)
All such notices shall be deemed to have been given three business days
after mailing if sent by registered or certified mail, one business day after
mailing if sent by overnight courier service or on the date transmitted if sent
by facsimile transmission.
12. Miscellaneous.
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(a) This Agreement shall be construed, interpreted and enforced
in accordance with the laws (but not the law of conflict of laws) of the
Commonwealth of Pennsylvania.
(b) This Agreement and its provisions shall be binding upon and
inure to the benefit of the respective legal representatives, successors, heirs,
and permitted assigns of the parties. The Employee shall not assign any of her
rights nor delegate any of her duties under this Agreement without the prior
written consent of the Company.
(c) This Agreement constitutes the entire Agreement between the
parties and supersedes all prior negotiations, understandings and agreements of
any nature whatsoever, whether oral or written, with respect to the subject
matter hereof. No amendment, waiver or discharge of any provision of this
Agreement shall be effective against any party, unless that party shall have
consented thereto in writing.
(d) The headings to the sections of this Agreement are inserted
only for convenience of reference and are not intended, nor shall they be
construed, to modify, define, limit or expand the intent of the parties as
expressed in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
WITNESS: TE MERGER CORPORATION
By:
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Xxx X. Xxxxxxxxxxx, President
By: (SEAL)
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Xxxxx X. Xxxxxxxx
INTENDING TO BE LEGALLY BOUND HEREBY, CONESTOGA ENTERPRISES, INC. hereby
guarantees the performance of all of the obligations of and payment of all sums
due from TE Merger Corporation under the foregoing Employment Agreement.
CONESTOGA ENTERPRISES, INC.
By:
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President
