Exhibit 10.16
EMPLOYMENT AGREEMENT
Xxxx X. Xxxxxxxxxxx
This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of November 1, 2004
(the "Effective Date") by and between Citizens Communications Company (the
"Company") and Xxxx X. Xxxxxxxxxxx ("Executive").
WHEREAS, Executive is not currently employed with the Company as an
executive officer and is leaving her current employer (the "Prior Employer") to
start work at the Company; and
WHEREAS, as of the Effective Date, the Company desires to enter into an
agreement with Executive embodying the terms of Executive's employment and
pursuant to which Executive will serve as President and Chief Executive Officer,
and Executive desires to enter into such an agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration, the parties agree as
follows:
1. Term of Employment. Subject to the provisions of Section 8 of this
Agreement, Executive shall be employed by the Company, and any of its
subsidiaries that the Board of Directors of the Company (the "Board") shall
designate for a period commencing on the Effective Date and ending on the fifth
anniversary thereof (the "Initial Term"), on the terms and subject to the
conditions set forth in this Agreement. Following the Initial Term, the
Agreement shall automatically be renewed for additional terms of one year on
each anniversary of the last day of the Initial Term (the Initial Term and any
annual extensions of the term of this Agreement, together, the "Employment
Term"), subject to Section 8 of this Agreement, unless the Company or the
Executive gives the other party written notice of non-renewal at least ninety
(90) days prior to such anniversary. A written notice of non-renewal given by
the Company to the Executive shall be considered a Notice of Termination
(pursuant to Section 8(e) of this Agreement) of a termination without Cause by
the Company and shall constitute a termination without Cause under Section 8(c)
of this Agreement at the expiration of such Employment Term for all purposes
hereunder.
2. Position.
a. During the Employment Term, Executive shall serve as President and Chief
Executive Officer of the Company and shall report directly to the Board. In such
position, Executive shall have such duties and authority commensurate with the
position of chief executive officer of a company of similar size and nature. As
soon as practicable after the Effective Date, Executive shall become a member of
the Board.
b. During the Employment Term, Executive will devote Executive's full
business time and best efforts (excluding any periods of vacation or sick leave)
to the performance of Executive's duties hereunder and will not engage in any
other business, profession or occupation for compensation or otherwise which
would conflict or interfere with the rendition of such services either directly
or indirectly, without the prior written consent of the Board; provided that
nothing herein shall preclude Executive, (i) subject to the prior approval of
the Board, from accepting appointment to or continue to serve on any board of
directors or trustees of any business corporation or any charitable
organization, (ii) making personal or family investments; provided, however, in
each case under this Section 2 (b)(i) or (ii) that such activities, in the
aggregate, do not conflict or interfere with the performance of Executive's
duties hereunder or conflict with Section 10 of this Agreement.
3. Base Salary. During the Employment Term, the Company shall pay Executive
a base salary at the annual rate of $700,000, payable by payroll check in
substantially equal periodic payments in accordance with the Company's practices
for other executive employees, as such practices may be determined from time to
time. Executive shall be entitled to such increases in Executive's base salary,
if any, as may be determined from time to time in the sole discretion of the
Board. Executive's annual base salary, as in effect from time to time, is
hereinafter referred to as the "Base Salary."
4. Annual Bonus. During the Employment Term, Executive shall be eligible to
earn an annual cash bonus award (an "Annual Bonus"), payable by payroll check,
with a target bonus amount equal to 100% of the Base Salary (the "Target
Bonus"), with adjustments based on the schedules set forth in the Citizens
Incentive Plan, as amended from time to time, but the adjustments shall in no
event be less favorable to Executive than those set forth in such Plan for the
2004 calendar year; provided, however, that in no event shall the Annual Bonus
in respect of the 2004 calendar year be less than $700,000.
5. Long-Term Incentive. As soon as practicable after the Effective Date,
Executive shall upon commencement of her employment hereunder, receive a grant
of 150,000 restricted shares of Common Stock (with the other grants hereunder,
the "Restricted Shares"). With respect to each fiscal year during the Employment
Term after 2004, the Company shall grant no later than each March of the
following year (commencing with March, 2006) to Executive a number of Restricted
Shares with an aggregate value on the date of each grant equal to between
$1,000,000 and $2,000,000, as determined by the Compensation Committee of the
Board (the "Compensation Committee"). Subject to Section 8(b)(ii)(D) and Section
8(c)(iii)(D), below, each annual grant of Restricted Shares shall vest and
become non-forfeitable as to twenty (20) percent of the shares initially
granted, on each anniversary of the date of grant and shall be fully vested and
100 percent non-forfeitable upon the fifth anniversary of the date of grant
provided, however, that Executive shall be entitled to participate in any
program the Company maintains to allow employees to use vested shares for the
payment of applicable taxes at the time of such vesting.
6. Employee Benefits; Business Expenses.
a. Employee Benefits. During the Employment Term, Executive (and her
eligible dependents) shall be entitled to participate in the Company's pension,
profit sharing, medical, dental, life insurance and other employee benefit plans
(other than severance plans) (the "Company Plans"), as in effect from time to
time (collectively the "Employee Benefits") on the same basis as those benefits
are generally made available to other senior executives of the Company, at a
level of participation commensurate with her position.
2
b. Business Expenses and Perquisites.
(i) Expenses. During the Employment Term, reasonable business expenses
incurred by Executive in the performance of Executive's duties hereunder shall
be reimbursed by the Company in accordance with the Company's policies.
(ii) Perquisites. During the Employment Term, Executive shall be entitled
to receive such perquisites as are generally made available to other senior
executives of the Company at a level that is commensurate with her position.
7. Relocation Period. During the period commencing on the Effective Date
and ending no later than the first anniversary thereof (the "Relocation
Period"), Executive is expected to arrange relocation from California to
Connecticut on a permanent basis for her, her spouse and her dependents. The
Company shall, during the Relocation Period, pay or reimburse Executive for all
reasonable expenses incurred for temporary housing, local ground transportation,
travel to and from California for her, her spouse and her dependents, closing
costs and moving expenses in connection with the purchase and sale of permanent
housing and other costs and expenses during the Relocation Period related to her
maintaining a residence separate from her family and relocating to Connecticut;
provided, however, that no later than November 1, 2005, Executive shall have
relocated to Connecticut and no further payments for expenses under this Section
7 that are incurred after the end of the Relocation Period shall be borne by the
Company. The Company shall pay or reimburse Executive under this Section 7 for
all costs and expenses incurred during the Relocation Period in an aggregate
amount up to $500,000.
8. Termination. Executive's employment hereunder may be terminated by
either party at any time and for any reason; provided that Executive will be
required to give the Company at least 60 days advance written notice of any
resignation of Executive's employment (30 days if such resignation is for "Good
Reason" (as hereinafter defined)). Notwithstanding any other provision of this
Agreement, the provisions of this Section 8 shall exclusively govern Executive's
rights upon termination of employment with the Company.
a. By the Company For Cause or By Executive Resignation Without Good
Reason.
(i) The Employment Term and Executive's employment hereunder may be
terminated by the Company for Cause (as defined below) and shall terminate
automatically upon Executive's resignation without Good Reason; provided that
Executive will be required to give the Company at least 60 days advance written
notice of such resignation. For purposes of this Agreement, a failure by
Executive to have effected a relocation to Connecticut, reasonably acceptable to
the Board before November 1, 2005, shall be deemed to be a resignation without
Good Reason by Executive for all purposes hereunder, effective as of November 1,
2005; provided, however, if the Board does not accept that such relocation has
occurred before November 1, 2005, Executive shall be given written notice of
that fact by the Board as soon as reasonably practicable upon such determination
and the resolution of such issue shall be dealt with using the same procedures
as would be used in the last two sentences of Section 8(a)(ii).
3
(ii) For purposes of this Agreement, "Cause" shall mean Executive's (A)
willful and continued failure (other than as a result of physical or mental
illness or injury) to perform her material duties (provided such duties are as
described in Section 2) to the Company or its subsidiaries which continues
beyond 10 days after a written demand for substantial performance is delivered
to Executive by the Company (the "Cure Period"), which demand shall identify and
describe such failure with sufficient specificity to allow Executive to respond;
(B) willful or intentional conduct that causes material and demonstrable injury,
monetarily or otherwise, to the Company; (C) conviction of, or a plea of nolo
contendere to, a crime constituting (x) a felony under the laws of the United
States or any state thereof or (y) a misdemeanor involving moral turpitude; or
(D) material breach of a material provision of this Agreement, including,
without limitation, engaging in any action in breach of Section 9 or Section 10
of this Agreement, which continues beyond the Cure Period (to the extent that,
in the Board's reasonable judgment, such breach can be cured). For purposes of
this Section 8(a)(ii), no act, or failure to act, on the part of Executive shall
be considered "willful" or "intentional" unless it is done, or omitted to be
done, by Executive in bad faith and without reasonable belief that Executive's
action or inaction was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by Executive in good faith and in
the best interests of the Company. Any determination that Executive has engaged
in conduct for which the Board wishes to terminate Executive's employment shall
be made after a meeting of the nonemployee directors of the Board at which
Executive shall be invited to appear, with counsel, to respond to the
allegations set forth in the written notice to the Executive of such meeting
(which notice shall provide sufficient specificity to allow Executive to respond
to such allegations). The Board may terminate the Executive for "Cause"
hereunder following such meeting only upon the affirmative vote of at least 60
percent of the nonemployee directors.
(iii) If Executive's employment is terminated by the Company for Cause, or
if Executive resigns without Good Reason, Executive shall be entitled to
receive:
(A) the Base Salary through the date of termination;
(B) any Annual Bonus earned but unpaid as of the date of termination
for any previously completed fiscal year;
(C) reimbursement for any unreimbursed business expenses properly
incurred by Executive in accordance with Company policy prior to the date
of Executive's termination;
(D) any accrued but unpaid vacation; and
(E) such Employee Benefits, if any, to which Executive may be entitled
under the applicable Company Plans or hereunder (including, without
limitation, if applicable, any Restricted Shares) upon termination of
employment hereunder, (the payments and benefits described clauses (A)
through (E) hereof being referred to, collectively, as the "Accrued
Rights").
4
Following such termination of Executive's employment by the Company for Cause or
resignation by Executive, except as set forth in this Section 8(a)(iii) and
Section 8(g), Executive shall have no further rights to any compensation or any
other benefits under this Agreement.
b. Disability or Death.
(i) Executive's employment hereunder shall terminate upon Executive's
death and may be terminated by the Company if Executive becomes physically
or mentally incapacitated and is therefore unable for a period of six (6)
consecutive months or for an aggregate of nine (9) months in any twelve
(12) consecutive month period to perform Executive's duties (such
incapacity is hereinafter referred to as "Disability"). Any question as to
the existence of the Disability of Executive as to which Executive and the
Company cannot agree shall be determined in writing by a qualified
independent physician mutually acceptable to Executive and the Company. If
Executive and the Company cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians
shall select a third who shall make such determination in writing. The
determination of Disability made in writing to the Company and Executive
shall be final and conclusive for all purposes of the Agreement.
(ii) Upon termination of Executive's employment hereunder for either
Disability or death, Executive or Executive's estate (as the case may be),
shall be entitled to receive:
(A) the Accrued Rights;
(B) continued payment of Executive's Base Salary during the
period commencing on the termination date and ending on the date that
is six months after the termination date;
(C) a pro rata portion of the Annual Bonus, if any, that
Executive would have been entitled to receive pursuant to the Citizens
Incentive Plan in the year of termination, based on actual performance
through the date of termination; and
(D) all Restricted Shares that have been granted as of the date
of termination shall be fully vested and non-forfeitable as of such
date, all other restricted shares and options granted to Executive
that are not vested as of such date shall become vested and
non-forfeitable or, in the case of options, fully exercisable, and
Executive shall not be entitled to any further annual grants of
Restricted Shares under Section 5 of this Agreement.
(iii) Upon termination of Executive's employment hereunder due to
Executive's death or Disability, in addition to the benefits described in
Section 8(b)(ii) above, the Company shall provide Executive (in the event of her
Disability) and Executive's spouse with medical, dental, life insurance and
other health benefits (pursuant to the same Company Plans that are medical,
dental, life insurance and other health benefit plans and that are in effect for
active employees of the Company), at the sole cost of the Company, until the
second anniversary of the date of Executive's death or Disability.
5
Following Executive's termination of employment due to death or Disability,
except as set forth in this Section 8(b) and Section 8(g), Executive shall have
no further rights to any compensation or any other benefits under this
Agreement.
c. By the Company Without Cause or by Executive Resignation for Good
Reason.
(i) Executive's employment hereunder may be terminated (A) by the Company
without Cause (which shall not include Executive's termination of employment due
to her death or Disability) or (B) by Executive for Good Reason (as defined
below).
(ii) For purposes of this Agreement, "Good Reason" shall mean (A) the
failure of the Company to pay or cause to be paid Executive's Base Salary or
Annual Bonus, or grant the Restricted Shares when due hereunder, (B) any
substantial and continuing diminution in Executive's position, authority or
responsibilities from those described in Section 2 hereof, (C) any relocation of
Executive's principal office location more than 25 miles outside of the
Stamford, Connecticut metropolitan area, or (D) any other material breach of a
material provision of this Agreement; provided that any of the events described
in clauses (A), (B), (C) or (D) of this Section 8(c)(ii) shall constitute Good
Reason only if the Company fails to cure such event within 10 days after receipt
from Executive of written notice of the event which constitutes Good Reason
(with sufficient specificity from Executive for the Company to respond to such
claim).
(iii) If Executive's employment is terminated by the Company without Cause
(other than by reason of death or Disability) or by Executive for Good Reason,
subject to Executive's execution of a release of all then existing claims
against the Company and its subsidiaries, affiliates, shareholders, officers,
directors, employees and agents, Executive shall be entitled to receive:
(A) the Accrued Rights;
(B) subject to Executive's continued compliance with the provisions of
Section 9 and Section 10 of this Agreement, an amount equal to the greater
of (i) three times the sum of the Base Salary and Target Bonus, payable in
equal installments over the thirty-six (36) month period commencing on the
date of termination, and (ii) continued payment, during the balance of the
Initial Term, of the Base Salary and Target Bonus (the applicable period
referenced in clause (i) and (ii) hereof shall be referred to in this
Agreement as the "Severance Period"); provided, however, that the aggregate
amount described in this subsection (B) shall be reduced by any amounts due
and owing by Executive to the Company for funds borrowed from or advanced
by the Company (to the extent permitted under applicable law);
(C) continuation of medical, dental, life insurance and other health
benefits (pursuant to the same Company Plans that are medical, dental, life
insurance and other health benefit plans and that are in effect for active
employees of the Company) until the earlier to occur of the end of the
Severance Period and the date on which Executive becomes eligible to
receive comparable benefits from any subsequent employer; and
6
(D) all Restricted Shares shall be vested and non-forfeitable as of
the date of termination, all other restricted shares and options granted to
Executive that are not vested as of such date shall become vested and
nonforfeitable or, in the case of options, fully exercisable and Executive
shall not be entitled to any further annual grants of Restricted Shares
under Section 5 of this Agreement.
Following Executive's termination of employment by the Company without Cause
(other than by reason of Executive's death or Disability) or Executive for Good
Reason, except as set forth in this Section 8(c)(iii) and Section 8(g),
Executive shall have no further rights to any compensation or any other benefits
under this Agreement.
d. Change in Control.
(i) Executive shall also be entitled to the benefits set forth in Section
8(c)(iii) above if, within one year following a Change in Control (defined
below), Executive terminates her employment as a result of: (i) any decrease by
the Company of the Base Salary or Target Bonus; (ii) any decrease in Executive's
pension benefit opportunities or any material diminution in the aggregate
employee benefits; or (iii) any material diminution in Executive's title,
reporting relationships, duties or responsibilities (each, a "Constructive
Termination Event"); provided that either of the events described in clauses (i)
and (ii) of this Section 8(d) shall constitute a Constructive Termination Event
only if the Company fails to cure such event within 10 days after receipt from
Executive of written notice of the event which constitutes a Constructive
Termination Event.
(ii) For purposes of this Agreement, a "Change in Control" shall be deemed
to have occurred:
(A) When any "person" as defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and as used in
Section 13(d) and 14(d) thereof, including a "group" as defined in Section
13(d) of the Exchange Act (but excluding the Company and any subsidiary and
any employee benefit plan sponsored or maintained by the Company or any
subsidiary (including any trustee of such plan acting as trustee)),
directly or indirectly, becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), of securities of the Company representing
50% or more of the combined voting power of the Company's then outstanding
securities; or
(B) Upon the consummation of any merger or other business combination
involving the Company, a sale of substantially all of the Company's assets,
liquidation or dissolution of the Company or a combination of the foregoing
transactions (the "Transactions") other than a Transaction immediately
following which the shareholders of the Company immediately prior to the
Transaction own, in the same proportion, at least 51% of the voting power,
directly or indirectly, of (i) the surviving corporation in any such merger
or other business combination; (ii) the purchaser of or successor to the
Company's assets; (iii) both the surviving corporation and the purchaser in
the event of any combination of Transactions; or (iv) the parent company
owning 100% of such surviving corporation, purchaser or both the surviving
corporation and the purchaser, as the case may be.
7
(iii) Excess Parachute Payments.
(A) If it is determined (as hereafter provided) that any payment or
distribution by the Company to or for the benefit of Executive, whether
paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including without
limitation any stock option, restricted stock award, stock appreciation
right or similar right, or the lapse or termination of any restriction on
or the vesting or exercisability of any of the foregoing (a "Severance
Payment"), would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code") (or any
successor provision thereto) by reason of being "contingent on a change in
ownership or control" of the Company, within the meaning of Section 280G of
the Code (or any successor provision thereto) or to any similar tax imposed
by state or local law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such interest and
penalties, are hereafter collectively referred to as the "Excise Tax"),
then Executive shall receive the greater of (x) the Severance Payment,
after payment by Executive of the Excise Tax imposed on the Severance
Payment and (y) the amount of the Severance Payment (calculated on a net
after-tax basis) which could be paid to Executive under Section 280G of the
Code without causing any loss of deduction to the Company under such
Section (the "Capped Payment"); provided, however, that if the amount in
subsection (x) herein exceeds the amount determined under subsection (y)
herein by at least 125% of such amount in subsection (y), the Company shall
make an additional payment (the "Gross-Up Payment") to Executive such that,
after payment of all Excise Taxes and any other taxes payable in respect of
such Gross-Up Payment, Executive shall retain the same amount as if no
Excise Tax had been imposed.
(B) Subject to the provisions of Section 8(d)(iii)(A) hereof, all
determinations required to be made under this Section 8(d), including
whether an Excise Tax is payable by Executive and the amount of such Excise
Tax, shall be made by the nationally recognized firm of certified public
accountants (the "Accounting Firm") used by the Company prior to the Change
in Control (or, if such Accounting Firm declines to serve, the Accounting
Firm shall be a nationally recognized firm of certified public accountants
selected by Executive). The Accounting Firm shall be directed by the
Company or Executive to submit its preliminary determination and detailed
supporting calculations to both the Company and Executive within 15
calendar days after the date of Executive's termination of employment, if
applicable, and any other such time or times as may be requested by the
Company or Executive. If the Accounting Firm determines that any Excise Tax
is payable by Executive, the Company shall either (x) make payment of the
Severance Payment, less all amounts withheld in respect of the Excise Tax,
as required by applicable law, (or, if applicable the Gross-Up Payment) or
(y) reduce the Severance Payment by the amount which, based on the
Accounting Firm's determination and calculations, would provide Executive
with the Capped Payment, and pay to Executive such reduced amount. If the
Accounting Firm determines that no Excise Tax is payable by Executive, it
shall, at the same time as it makes such determination, furnish Executive
with an opinion that she has substantial authority not to report any Excise
Tax on her federal, state, local income or other tax return. All fees and
expenses of the Accounting Firm shall be paid by the Company in connection
with the calculations required by this section.
8
(C) The federal, state and local income or other tax returns filed by
Executive (or any filing made by a consolidated tax group which includes
the Company) shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable
by Executive. Executive shall make proper payment of the amount of any
Excise Tax, and at the request of the Company, provide to the Company true
and correct copies (with any amendments) of her federal income tax return
as filed with the Internal Revenue Service and corresponding state and
local tax returns, if relevant, as filed with the applicable taxing
authority, and such other documents reasonably requested by the Company,
evidencing such payment.
e. Notice of Termination. Any purported termination of employment by the
Company or by Executive (other than due to Executive's death) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 13(h) hereof. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.
f. Board/Committee Resignation; Execution of Release of all Claims.
(i) Upon termination of Executive's employment for any reason, Executive
agrees to resign, as of the date of such termination and to the extent
applicable, from the Board (and any committees thereof) and the board of
directors (and any committees thereof) of any of the Company's subsidiaries or
affiliates.
(ii) Upon termination of Executive's employment for any reason, Executive
agrees to execute a release of all then existing claims against the Company, its
subsidiaries, affiliates, shareholders, directors, officers, employees and
agents in relation to claims relating to or arising out of her employment or the
business of the Company; provided, however, that any such release shall not bar
or prevent Executive from responding to any litigation or other proceeding
initiated by a released party and asserting any claim or counterclaim she has in
such litigation or other proceeding as if no such release had been given as to
such party. Notwithstanding anything set forth in this Agreement to the
contrary, upon termination of Executive's employment for any reason, Executive
shall not receive any payments or benefits to which she may be entitled
hereunder (other than those which by law cannot be subject to the execution of a
release) (A) if Executive revokes such release or (B) until eight (8) days after
the date Executive signs such release (or until such other date as applicable
law may provide that Executive cannot revoke such release).
9
g. Indemnification. While employed hereunder and thereafter, with respect
to the period during which she was employed hereunder, Executive shall be
indemnified by the Company to the fullest extent permitted by its charter,
by-laws or the terms of any insurance or other indemnity policy applicable to
officers or directors of the Company (including any rights to advances or
reimbursement of legal fees thereunder). The Company shall provide that
Executive's right to indemnification hereunder by the Company or any insurance
or indemnity policy shall at no time be less than the right of any officer or
director of the Company, in the same or similar circumstances. The Company's
obligation under this Section 8(g) shall survive any termination of Executive's
employment hereunder or the expiration or termination of this Agreement.
9. Non-Competition/Non-Solicitation/Non-Disparagement.
a. Executive acknowledges and recognizes the highly competitive nature of
the businesses of the Employer and its affiliates and accordingly agrees that,
during the Employment Term and, for a period of one year following any
termination of Executive's employment with the Company (the "Restricted
Period"), Executive will not, whether on Executive's own behalf or on behalf of
or in conjunction with any person, firm, partnership, joint venture,
association, corporation or other business organization, entity or enterprise
whatsoever ("Person"), directly or indirectly engage in any business that
directly or indirectly competes in any material way with the primary business of
the Company:
(i) During the Restricted Period, Executive will not, whether on
Executive's own behalf or on behalf of or in conjunction with any Person,
directly or indirectly:
(A) solicit or encourage any employee of the Company or its affiliates
to leave the employment of the Company or its affiliates; or
(B) hire any such employee who was employed by the Company or its
affiliates as of the date of Executive's termination of employment with the
Company or who left the employment of the Company or its affiliates
coincident with, or within one year prior to or after, the termination of
Executive's employment with the Company.
b. Executive shall not at any time issue any press release or make any
public statement about the Company or any director, officer, employee,
successor, parent, subsidiary or agent or representative of, or attorney to the
Company (any of the foregoing, a "Company Affiliate") regarding (i) any of the
foregoing's financial status, business, services, business methods, compliance
with laws, or ethics or otherwise, or (ii) regarding Company personnel,
directors, officers, employees, attorneys, agents, including, without
limitation, in respect of both clauses (i) and (ii), any statement that is
intended or reasonably likely to disparage the Company or any Company Affiliate,
or otherwise degrade any Company Affiliate's reputation in the business,
industry or legal community in which any such Company Affiliate operates and,
the Company shall not at any time issue any press release or make any public
statement about Executive or her spouse that is intended or reasonably likely to
disparage Executive's reputation in the business, industry or legal community or
otherwise degrade her or his reputation or standing in their community;
provided, that, Executive and the Company shall be permitted to (a) make any
statement that is required by applicable securities or other laws to be included
in a filing or disclosure document, subject to prior notice to the other
thereof, and (b) defend herself or itself against any statement made by the
other party (including those made by any Company Affiliate or by any person
affiliated with the Executive or her spouse) that is intended or reasonably
likely to disparage or otherwise degrade that party's reputation, only if there
is a reasonable belief that the statements made in such defense are not false
statements and (c) provide truthful testimony in any legal proceeding.
10
c. It is expressly understood and agreed that although Executive and the
Company consider the restrictions contained in this Section 9 to be reasonable,
if a final judicial determination is made by a court of competent jurisdiction
that the time or territory or any other restriction contained in this Agreement
is an unenforceable restriction against Executive, the provisions of this
Agreement shall not be rendered void but shall be deemed amended to apply as to
such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this Agreement
is unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
10. Confidentiality.
a. Executive will not at any time (whether during or after Executive's
employment with the Company) (x) retain or use for the benefit, purposes or
account of Executive or any other Person; or (y) disclose, divulge, reveal,
communicate, share, transfer or provide access to any Person outside the Company
(other than its professional advisers who are bound by confidentiality
obligations), any non-public, proprietary or confidential information --
including without limitation rates, trade secrets, know-how, research and
development, software, databases, inventions, processes, formulae, technology,
designs and other intellectual property, information concerning finances,
investments, profits, pricing, costs, products, services, vendors, customers,
clients, partners, investors, personnel, compensation, recruiting, training,
advertising, sales, marketing, promotions, government and regulatory activities
and approvals -- concerning the past, current or future business, activities and
operations of the Company, its subsidiaries or affiliates and/or any third party
that has disclosed or provided any of same to the Company on a confidential
basis ("Confidential Information") without the prior written authorization of
the Board.
b. "Confidential Information" shall not include any information that is (a)
generally known to the industry or the public other than as a result of
Executive's breach of this covenant or any breach of other confidentiality
obligations by third parties; (b) made legitimately available to Executive by a
third party without breach of any confidentiality obligation; or (c) required by
law to be disclosed; provided that Executive shall give prompt written notice to
the Company of such requirement, disclose no more information than is so
required, and cooperate with any attempts by the Company to obtain a protective
order or similar treatment.
11
c. Upon termination of Executive's employment with the Company for any
reason, Executive shall immediately destroy, delete, or return to the Company,
at the Company's option, all originals and copies in any form or medium
(including memoranda, books, papers, plans, computer files, letters and other
data) in Executive's possession or control (including any of the foregoing
stored or located in Executive's office, home, laptop or other computer, whether
or not Company property) that contain Confidential Information or otherwise
relate to any material aspects of the business (that are not otherwise available
to the public) of the Company, its affiliates and subsidiaries, except that
Executive may retain only those portions of any documents, personal notes,
notebooks and diaries that do not contain any Confidential Information.
d. The provisions of this Section 10 shall survive the termination of
Executive's employment for any reason.
11. Specific Performance. Executive acknowledges and agrees that the
Employer's remedies at law for a breach or threatened breach of any of the
provisions of Section 9 or Section 10 of this Agreement would be inadequate and
the Company would suffer irreparable damages as a result of such breach or
threatened breach. In recognition of this fact, Executive agrees that, in the
event of such a breach or threatened breach, in addition to any remedies at law,
the Company, without posting any bond, shall be entitled to cease making any
payments or providing any benefit otherwise required by this Agreement and
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available. In the event of an alleged breach of Section
9(b) by the Company, Executive shall not be required to post a bond in order to
seek equitable relief or any other equitable remedy.
12. Arbitration. Except as provided in Section 11, any other dispute
arising out of or asserting breach of this Agreement, or any statutory or common
law claim by Executive relating to her employment under this Agreement or the
termination thereof (including any tort or discrimination claim), shall be
exclusively resolved by binding statutory arbitration in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association.
Such arbitration process shall take place in New York, New York. A court of
competent jurisdiction may enter judgment upon the arbitrator's award. All costs
and expenses of arbitration (including fees and disbursements of counsel) shall
be borne by the respective party incurring such costs and expenses, unless the
arbitrator shall award costs and expenses to the prevailing party in such
arbitration.
13. Miscellaneous.
a. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut, without regard to
conflicts of laws principles thereof.
12
b. Entire Agreement/Amendments. This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by the
Company. There are no restrictions, agreements, promises, warranties, covenants
or undertakings between the parties with respect to the subject matter herein
other than those expressly set forth herein. This Agreement may not be altered,
modified or amended except by written instrument signed by the parties hereto.
c. No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such
party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
d. Severability. In the event that any one or more of the provisions of
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.
e. Assignment. This Agreement, and all of Executive's rights and duties
hereunder, shall not be assignable or delegable by Executive. Any purported
assignment or delegation by Executive in violation of the foregoing shall be
null and void ab initio and of no force and effect. This Agreement may be
assigned by the Company to a person or entity which is an affiliate or a
successor in interest to substantially all of the business operations of the
Company. Upon such assignment, the rights and obligations of the Company
hereunder shall become the rights and obligations of such affiliate or successor
person or entity.
f. Set Off; Mitigation. The Company's obligation to pay Executive the
amounts provided and to make the arrangements provided hereunder shall not be
subject to set-off, counterclaim or recoupment of amounts owed by Executive to
the Company or its affiliates, other than any amounts due and owing as provided
for under Section 8(c)(iii)(B) hereof. Executive shall not be required to
mitigate the amount of any payment provided for pursuant to this Agreement by
seeking other employment or otherwise and the amount of any payment provided for
pursuant to this Agreement shall not be reduced by any compensation earned as a
result of Executive's other employment or otherwise.
g. Successors; Binding Agreement. This Agreement shall inure to the benefit
of and be binding upon the Company and its subsidiaries and Executive and any
personal or legal representatives, executors, administrators, successors,
assigns, heirs, distributees, devisees and legatees. Further, the Company will
require any successor (whether, direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly 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. As used in this Agreement,
"Company" shall mean the Company and any successor to its business and/or assets
which is required by this Section 13(g) to assume and agree to perform this
Agreement or which otherwise assumes and agrees to perform this Agreement;
provided, however, in the event that any successor, as described above, agrees
to assume this Agreement in accordance with the preceding sentence, as of the
date such successor so assumes this Agreement, the Company shall cease to be
liable for any of the obligations contained in this Agreement.
13
h. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or overnight courier or
three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below in this Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
If to the Company:
Citizens Communications Company
Three Xxxx Xxxxx Xxxx
Xxxxxxxx 0
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxx, Esq.
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
If to Executive:
To the most recent address of Executive set forth in the
personnel records of the Company.
With a copy to:
Howard, Rice, Nemorovski, Xxxxxx, Xxxx & Xxxxx LLC
0 Xxxxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
i. Executive Representation. Executive hereby represents to the Company
that the execution and delivery of this Agreement by Executive and the Company
and the performance by Executive of Executive's duties hereunder shall not
constitute a breach of, or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which Executive is a party or
otherwise bound, whether with the Prior Employer or otherwise.
j. Prior Agreements. This Agreement supercedes all prior agreements and
understandings (including verbal agreements) between Executive and the Company
and/or its affiliates regarding the terms and conditions of Executive's
employment with the Company and/or its affiliates.
14
k. Cooperation. Executive shall provide Executive's reasonable cooperation
in connection with any action or proceeding (or any appeal from any action or
proceeding) which relates to events occurring during Executive's employment
hereunder. This provision shall survive any termination of this Agreement.
l. Withholding Taxes. The Company may withhold from any amounts payable
under this Agreement such Federal, state and local taxes as may be required to
be withheld pursuant to any applicable law or regulation.
m. Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
15
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
CITIZENS COMMUNICATIONS COMPANY: EXECUTIVE:
/s/ Citizens Communications Company /s/ Xxxx X. Xxxxxxxxxxx
------------------------------------ ------------------------
Citizens Communications Company Xxxx X. Xxxxxxxxxxx
By: /s/ Xxxx Xxxx
-------------------------------
Xxxx Xxxx
16
