EXHIBIT 10.7
RESIGNATION AGREEMENT
This Resignation Agreement (the "Agreement") is hereby entered into
by and between Leap Wireless International, Inc., a Delaware corporation
("Leap"), Cricket Communications, Inc. ("Cricket" and together with Leap, the
"Company"), and Xxxxxxx X. Xxxxxxx (the "Executive"). Leap, Cricket and the
Executive are sometimes referred to herein as a "Party" or collectively as the
"Parties."
RECITALS
WHEREAS, Executive is currently employed by Cricket as its Chief
Executive Officer, serves as the Chief Executive Officer of Leap, and serves on
the Board of Directors of each of Leap and Cricket and their domestic
subsidiaries; and
WHEREAS, Executive and Cricket entered into an Executive Employment
Agreement made and entered into as of May 24, 2004 (the "Employment Agreement");
and
WHEREAS, Executive and Leap and Cricket wish to enter into this
Agreement for the purpose of terminating and superseding the Employment
Agreement in its entirety; and
WHEREAS, Executive and Cricket wish to terminate their employment
relationship through Executive's resignation effective as of February 25, 2005
(the "Termination Date"), and to resolve amicably all of their obligations to
each other, including, without limitation, under the Employment Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained
in this Agreement, and for other good and valuable consideration, the adequacy
of which is hereby acknowledged, the Parties hereby agree as follows:
1. Employment Agreement. The Employment Agreement shall be
superseded entirely by this Agreement, and the Employment Agreement shall be of
no further force or effect. Cricket and Executive each acknowledge and agree
that they do not have any claims against the other based on or arising under the
Employment Agreement.
2. Employment and Officer Status. Executive hereby resigns as an
employee of Cricket effective as of the Termination Date. Executive's separation
from employment shall be reflected in Cricket's records as a voluntary
resignation. Executive hereby resigns from his position as Chief Executive
Officer (and any other officer positions he may hold) of Leap and Cricket (and
each of their respective domestic affiliates and subsidiaries) effective as of
the Termination Date. Executive shall execute any additional documentation
necessary to effectuate such resignations.
3. Resignation From Board. Executive hereby resigns from his
position as a member of the Board of Directors of each of Leap and Cricket (and
each of their respective domestic affiliates and subsidiaries) effective as of
the Termination Date. Executive shall execute any additional documentation
necessary to effectuate such resignations.
4. Compensation Through the Termination Date. Executive acknowledges
and agrees that on the Termination Date, Cricket will issue Executive his final
paycheck, reflecting (a) his earned but unpaid base salary through the
Termination Date and (b) all accrued, unused vacation due Executive through the
Termination Date. The payments described in this Section shall be subject to all
applicable taxes and withholding. Cricket, within thirty-five (35) days after
the Termination Date, will reimburse Executive for any and all reasonable and
necessary business expenses incurred by Executive in connection with the
performance of his job duties prior to the Termination Date, which expenses
shall be submitted to Cricket with supporting receipts and/or documentation no
later than twenty-one (21) days after the Termination Date. Executive
acknowledges and agrees that with his final check, and the expense reimbursement
check described in this Section, Executive will have received all monies,
bonuses, commissions, expense reimbursement, vacation pay, or other compensation
he earned or was due during his employment by Cricket. Executive acknowledges
and agrees that the payments and benefits described in this Section constitute
the only compensation, benefits or other amounts to which he is entitled
pursuant to any policies, practices or benefit programs maintained by Leap or
Cricket related to compensation and benefits. Executive further acknowledges and
agrees that he currently holds no rights to stock, stock options, restricted
stock, or deferred stock units in either Leap or Cricket, or long-term
equity-based incentive compensation from the Company (collectively "Equity")
under the Employment Agreement or pursuant to any plan, program, or policy of
the Company, and hereby waives and relinquishes any claim to such Equity.
5. Entitlement to Benefits. Except as provided in this Agreement,
Executive's entitlement to benefits from Leap or Cricket, and eligibility to
participate in the benefit plans of Leap and Cricket, shall cease on the
Termination Date, except to the extent Executive elects to and is eligible to
continue his medical and dental benefits at his sole expense pursuant to COBRA.
6. Severance Payment. Upon the Termination Date, and subject in all
respects to (i) Executive's execution and delivery to the Company of the General
Release attached hereto as Exhibit A (the "General Release"), and (ii) the
expiration of the seven day revocation period following the execution and
delivery of the General Release as described therein, without Executive's having
given notice of revocation, Cricket shall pay Executive a severance payment in
the gross amount of One Million Dollars ($1,000,000) (subject to applicable
withholding at the minimum permissible rate) in a lump sum by wire transfer to
the account specified on Schedule 1 hereto with immediately available funds on
the next business day following the date on which the General Release becomes
irrevocable, in lieu of any payments or benefits to which Executive may have
been entitled pursuant to the Employment Agreement. The Company will provide
prompt notice of the payment of such amount to Xxxxxxx Xxxxxxxxx, counsel to
Executive by telephone to 000-000-0000, or e-mail to xxxxxxxxxx@xxxxxxxx.xxx.
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7. Proprietary Information. Executive acknowledges that certain
information, observations and data obtained by him during the course of or
related to his employment with the Company (including, without limitation,
information with respect to the Company's and its affiliates' operations,
processes, products, inventions, business practices, finances, principals,
vendors, suppliers, customers, potential customers, shareholders, business
plans, marketing plans, proposals or methods, costs, prices, contractual
relationships, regulatory status, compensation paid to employees or other terms
of employment) are the sole property of the Company and constitute trade secrets
of the Company. Promptly following the execution of this Agreement, Executive
agrees to return all files, customer lists, financial information or other
Company property (excluding documents that have been publicly filed with the
SEC) which are in the Executive's possession or control without making copies
thereof. Except as required pursuant to applicable law, rule or regulation or
other legal compulsion or in order to assert any rights under this Agreement,
Executive further agrees that he will not disclose to any person or use for his
own account any of the above described trade secret information, observations or
data without the written consent of Leap's Board of Directors. Further,
Executive acknowledges that any unauthorized use of the above described
confidential information will cause irreparable harm to the Leap and Cricket and
their affiliates and will give rise to an immediate action by any of them for
injunctive relief. Executive continues to be bound by the Invention Disclosure,
Confidentiality and Proprietary Rights Agreement that he signed during his
employment, in accordance with the terms thereof.
8. Cooperation Clause. Executive agrees to provide reasonable
assistance to the Company (including the Board of Directors of Leap and any
special committees of the Board of Directors of Leap) and its counsel and
accountants in any financial audits or internal investigation involving
securities, financial, accounting, or other matters, and in its defense of, or
other participation in, any administrative, judicial, or other proceeding
arising from any charge, complaint or other action which has been or may be
filed relating to the period during which Executive was employed by Cricket.
During a period of thirty days following the Termination Date (but not while
Executive is on vacation), Executive shall provide such assistance as the
Company may reasonably request in connection with negotiating a roaming
agreement with Sprint. Unless Executive agrees, he shall not be required to
travel in connection with the assistance requested by the Company pursuant to
this Section 8. The Company shall compensate Executive at the rate of $275 per
hour, with a five hour minimum, for any cooperation or assistance requested by
the Company; provided, however, that (i) the first five hours of assistance
requested by the Company shall be performed without compensation, and (ii) the
Company shall have no obligation to compensate Executive under this Section 8
for his cooperation or assistance in any matter in which he is named as a
defendant or respondent, or with respect to which Executive requests
indemnification pursuant to Section 12. Cricket agrees to reimburse Executive
for his reasonable and actual expenses incurred in providing any cooperation or
assistance contemplated by this Agreement (subject to the exception in clause
(ii) of the preceding sentence).
9. Confidentiality of Agreement. Except as expressly set forth in
Section 10, the provisions of this Agreement shall be held in strictest
confidence by the Parties and shall not be publicized or disclosed in any manner
whatsoever; provided, however, that: (a) Executive may disclose this Agreement,
in confidence, to his immediate family; (b) the Parties may disclose this
Agreement in confidence to their respective attorneys, accountants, auditors,
tax
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preparers, and financial advisors; (c) Leap may disclose this Agreement as
necessary to fulfill standard or legally required SEC or corporate reporting or
disclosure requirements; (d) the Parties may disclose this Agreement insofar as
such disclosure may be necessary to enforce its terms or as otherwise required
by law, rule, regulation or other legal compulsion; and (e) Executive may inform
third parties that he voluntarily resigned from his positions with Leap and
Cricket. Except as required by law, the Company will make only statements
consistent with the foregoing.
10. Press Release; Mutual Nondisparagement. Leap shall issue a press
release regarding Executive's resignation in the form attached hereto as Exhibit
B, or in such other form as the Parties mutually agree to. Except as required by
law or court order, Leap, Cricket, and Executive shall not make any additional
or inconsistent public statements regarding Executive's resignation, and Leap
and Cricket shall cause their directors, agents and affiliates to likewise
refrain from making such public statements, unless in response to a prior
statement or communication by a Party in violation of this Section 10. Leap,
Cricket, and the directors, agents and affiliates of Leap and Cricket, on the
one hand, and Executive and his agents and affiliates, on the other hand, shall
not disparage or otherwise publish or communicate derogatory statements or
opinions about the other to any third party, unless in response to a prior
statement or communication by the other side in violation of this Section 10.
Each Party shall be responsible for compliance by its directors, agents, and
affiliates, as the case may be. Internal communications among the senior
management personnel or the Board of Directors of Leap or Cricket shall not be
considered communications to a third party for purposes of this Section.
11. Non-Solicitation.
a. For the period commencing on the Termination Date and
terminating on the second anniversary thereof, Executive shall not, either on
Executive's own account or jointly with or as a manager, agent, officer,
employee, consultant, partner, joint venturer, owner, shareholder or otherwise,
on behalf of any other person, firm or corporation, directly or indirectly
solicit or attempt to solicit away from the Company, or any of its affiliates,
any of its officers or employees or offer employment to any person who, on or
during the six (6) months immediately preceding the date of such solicitation or
offer, is or was an officer or employee of the Company, or any of its
affiliates; provided, however, that a general advertisement to which an officer
or employee of the Company, or any of its affiliates, responds shall in no event
be deemed to result in a breach of this Section 11(a).
b. In the event that Executive breaches the provisions of
Section 11(a), or threatens to do so, in addition to and without limiting or
waiving any other remedies available to the Company in law or in equity, the
Company shall be entitled to immediate injunctive relief in any court having the
capacity to grant such relief, to restrain such breach or threatened breach and
to enforce Section 11(a). Executive acknowledges that it is impossible to
measure in money the damages that the Company will sustain in the event that
Executive breaches or threatens to breach Section 11(a) and, in the event that
the Company institutes any action or proceeding to enforce Section 11(a) seeking
injunctive relief, Executive hereby waives and agrees not to assert or use as a
defense a claim or defense that the Company has an adequate remedy at law.
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12. Indemnification. Executive will continue to be indemnified by
any applicable insurance policies, agreements, certificate of incorporation, or
bylaws of the Company and as otherwise required by law for his actions as an
employee, officer, and director prior to the Termination Date to the same extent
as during his employment to the fullest extent provided by law.
13. Return of Equipment. Within five (5) days of the Termination
Date, Executive shall return to the Company in good working order any equipment,
instruments, or accessories of the Company in his custody for the purpose of
conducting the business of the Company without deleting, removing, or
duplicating any data reflecting the Company's proprietary information, or if not
returned, account to the Company to its reasonable satisfaction for all such
equipment, instruments, or accessories.
14. Attorneys' Fees. Cricket hereby agrees to reimburse Executive
for his reasonable legal fees and expenses, up to a maximum of $5,000, incurred
in connection with the negotiation and review of this Agreement.
15. Miscellaneous Provisions.
a. The provisions of this Agreement are severable. If any
provision is held to be invalid or unenforceable it shall not affect the
validity or enforceability of any other provision.
b. Except as expressly stated herein, this Agreement and its
exhibits represent the sole and entire agreement between the Parties with
respect to the subject matters contained herein and supersede all prior
documents, agreements, negotiations and discussions between the Parties with
respect to the subject matters contained herein. The Parties acknowledge and
agree that there are no collateral agreements or representations, written or
oral, regarding the terms and conditions of Executive's employment with the
Company, the separation of Executive's employment with the Company, and
settlement of all Claims between the Parties other than those expressly set
forth in this Agreement. This Agreement supersedes and terminates the Employment
Agreement. Upon the Parties' execution of this Agreement, neither Party shall
have any further obligation to the other under the Employment Agreement.
c. No provision of this Agreement may be altered, modified or
amended unless such alteration, modification, or amendment is agreed to in
writing and signed by Executive on the one hand and Leap and Cricket on the
other, which writing expressly states the intent of the Parties to modify this
Agreement.
d. This Agreement shall be construed as a whole in accordance
with its fair meaning and in accordance with the laws of the State of
California. The language in the Agreement shall not be construed for or against
any particular Party. The headings used herein are for reference only and shall
not affect the construction of this Agreement.
e. No waiver by any Party hereto at any time of any breach of,
or compliance with, any condition or provision of this Agreement to be performed
by any other Party hereto shall be deemed a waiver of similar or dissimilar
provisions or conditions at the
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same or at any prior or subsequent time.
f. This Agreement may be executed in one or more counterparts,
and by facsimile, each of which shall be deemed to be an original as against any
Party that has signed it, but all of which together will constitute one and the
same instrument.
g. If any Party to this Agreement brings an action to enforce
his or its rights hereunder, the prevailing party shall be entitled to recover
his or its costs and expenses, including court costs and attorneys' fees, if
any, incurred in connection with such suit.
h. Executive acknowledges that the payments and benefits
provided in this Agreement may have tax ramifications to him. The Company has
provided no tax or other advice to Executive on such matters and Executive is
free to consult with an accountant, legal counsel, or other tax advisor
regarding the tax consequences he may face.
i. EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT
CAREFULLY, UNDERSTANDS ALL OF ITS TERMS, AND AGREES TO THOSE TERMS KNOWINGLY,
FREELY, VOLUNTARILY, AND WITHOUT DURESS.
j. Any and all notices or other communications or deliveries
required or permitted to be given or made shall be in writing and delivered
personally, or sent by certified or registered mail, return receipt requested
and postage prepaid, or sent by overnight courier service as follows:
If to Leap or Cricket, at:
Leap Wireless International, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
If to the Executive, at:
Xxxxxxx X. Xxxxxxx
00 Xxxxxxx Xxx
Xxxxxx, Xxx Xxxxxx 00000
With a copy to:
Xxxxxxxx & Xxxxx LLP
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
or at such other address as any party may specify by notice given to such other
party in accordance with this Section 15(j). The date of giving of any such
notice shall be the date of
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hand delivery, five days after the date of the posting of the mail or the day
immediately following the date when deposited with the overnight courier.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
on the dates indicated below.
EXECUTIVE LEAP WIRELESS INTERNATIONAL, INC.
By: /s/ S. Xxxxxxx Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx Name: S. Xxxxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxxxx Its: Chief Financial Officer
Dated: February 24, 2005 Dated: February 24, 2005
CRICKET COMMUNICATIONS, INC.
By: /s/ S. Xxxxxxx Xxxxxxxxx
Name: S. Xxxxxxx Xxxxxxxxx
Its: Chief Financial Officer
Dated: February 24, 2005
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EXHIBIT A
GENERAL RELEASE
1. General Release of Claims. In consideration of the benefits under
Section 6 of the Resignation Agreement (the "Agreement"), by and among Leap
Wireless International, Inc. ("Leap"), Cricket Communications, Inc. ("Cricket"
and together with Leap, the "Company") and Xxxxxxx X. Xxxxxxx ("Executive"),
Executive does hereby for himself and his spouse, beneficiaries, heirs,
successors and assigns, release, acquit and forever discharge Cricket, Leap,
their subsidiaries, each of the entities affiliated with a present director of
Leap, and their respective present and former stockholders, officers, directors,
managers, employees, representatives, related entities, successors and assigns,
and all persons acting by, through or in concert with them (the "Releasees") of
and from any and all claims, actions, charges, complaints, causes of action,
rights, demands, debts, damages, or accountings of whatever nature, known or
unknown, which Executive may have against the Releasees based on any actions or
events which occurred prior to the date of this General Release, including, but
not limited to, those related to, or arising from, the Executive Employment
Agreement between Cricket and Executive dated May 24, 2004, Executive's
employment with Cricket, or the termination thereof, any claims under Title VII
of the Civil Rights Act of 1964, as amended, the Federal Age Discrimination and
Employment Act, the Equal Pay Act, the Family and Medical Leave Act, the
Americans with Disabilities Act, the Civil Rights Act of 1866, 1871 and 1991,
the California Fair Employment and Housing Act, the California Occupational
Safety and Health Act, claims for unpaid wages and failure to pay wages under
the California Labor Code (collectively, "Claims"), including, without limiting
the generality of the foregoing, any Claims arising out of, based upon, or
relating to Executive's rights to stock, stock options, restricted stock,
deferred stock units, long-term equity-based incentive compensation, or any
other form of equity interest in either Leap or Cricket (which rights are hereby
relinquished), or any contract, agreement or compensation arrangement between
Executive and the Company. This General Release shall not, however, constitute a
waiver of any of Executive's rights under the Agreement or to any vested
benefits under the Company's 401(k) plan.
2. Release of Unknown Claims. IN ADDITION, EXECUTIVE EXPRESSLY WAIVES ALL
RIGHTS UNDER SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA, WHICH
READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
WITH FULL AWARENESS AND UNDERSTANDING OF THE ABOVE PROVISIONS, EXECUTIVE HEREBY
WAIVES ANY RIGHTS HE MAY HAVE UNDER SECTION 1542, AS WELL AS UNDER ANY OTHER
STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. EXECUTIVE INTENDS TO, AND
HEREBY DOES, RELEASE THE
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RELEASEES FROM CLAIMS WHICH EXECUTIVE DOES NOT PRESENTLY KNOW OR SUSPECT TO
EXIST AT THIS TIME.
3. Older Workers' Benefit Protection Act. EXECUTIVE AGREES AND EXPRESSLY
ACKNOWLEDGES THAT THIS GENERAL RELEASE INCLUDES A WAIVER AND RELEASE OF ALL
CLAIMS WHICH EXECUTIVE HAS OR MAY HAVE UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. SECTION 621, ET SEQ. ("ADEA"). THE
FOLLOWING TERMS AND CONDITIONS APPLY TO AND ARE PART OF THE WAIVER AND RELEASE
OF ALL CLAIMS INCLUDING BUT NOT LIMITED TO THE ADEA CLAIMS UNDER THIS GENERAL
RELEASE:
a. That the Agreement and this General Release are written in a
manner calculated to be understood by Executive.
b. The waiver and release of claims under the ADEA contained in this
General Release do not cover rights or claims that may arise after the date on
which Executive signs this General Release.
c. The Agreement provides for consideration in addition to anything
of value to which Executive is already entitled.
d. Executive is advised to consult an attorney before signing this
General Release.
e. Executive is afforded twenty-one (21) days after Executive is
provided with this General Release to decide whether or not to sign this General
Release, although Executive may waive such period by signing the General Release
sooner. If Executive executes this General Release prior to the expiration of
such period, Executive does so voluntarily and after having had the opportunity
to consult with an attorney.
f. Executive will have the right to revoke this General Release
within seven (7) days of signing this General Release. In the event this General
Release is revoked, this General Release will be null and void in its entirety,
and Executive will not receive the benefits described in Section 6 of the
Agreement.
h. If Executive wishes to revoke the General Release, Executive
shall deliver written notice stating his intent to revoke this General Release
to Cricket's General Counsel on or before the seventh (7th) day after the date
hereof.
4. No Assignment of Claims. Executive represents and warrants to the
Releasees that there has been no assignment or other transfer of any interest in
any Claim which Executive may have against the Releasees, or any of them, and
Executive agrees to indemnify and hold the Releasees harmless from any
liability, claims, demands, damages, costs, expenses and attorneys' fees
incurred as a result of any person asserting any such assignment or transfer of
any rights or Claims under any such assignment or transfer from such party.
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5. No Suits or Actions. Executive agrees that if he hereafter commences,
joins in, or in any manner seeks relief through any suit arising out of, based
upon, or relating to any of the Claims released hereunder, or in any manner
asserts against the Releasees any of the Claims released hereunder, then he will
pay to the Releasees against whom such suit or Claim is asserted, in addition to
any other damages caused thereby, all attorneys' fees incurred by such Releasees
in defending or otherwise responding to said suit or Claim.
6. No Admission. Executive further understands and agrees that neither the
payment of money nor the execution of this Release shall constitute or be
construed as an admission of any liability whatsoever by the Releasees.
IN WITNESS WHEREOF, Executive has executed this General Release on the
date indicated below.
EXECUTIVE
___________________________________
Xxxxxxx X. Xxxxxxx
Date:_____________________________
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EXHIBIT B
[FORM OF AGREED-UPON PRESS RELEASE]
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Schedule 1
Wire Transfer Instructions
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