EXHIBIT 10.17
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January __, 1998, by and between
TRITON MANAGEMENT COMPANY, INC., a Delaware corporation (the "Company"), and
XXXXX XXXXX ("Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Triton PCS, Inc., a Delaware corporation ("PCS"), and its
affiliates (collectively, the "Triton PCS Group") are engaged in the business of
providing mobile wireless telecommunication services in the southeastern United
States (the "Business");
WHEREAS, the Company has been organized to provide management services to
the Triton PCS Group;
WHEREAS, Executive possesses substantial experience and ability in the
Business; and
WHEREAS, the Company desires to secure and retain the experience, ability,
and services of Executive, and Executive desires to be so employed, in
accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and intending to be legally bound hereby, the parties agree as follows:
1. Employment.
----------
(a) Agreement to Employ. The Company hereby employs Executive, and
-------------------
Executive hereby accepts such employment with the Company, upon the terms and
conditions stated in this Agreement.
(b) Employment Period. The term of Executive's employment shall be for a
-----------------
period of five (5) years (the "Employment Period") commencing on a date to be
mutually agreed upon (the "Commencement Date") and continuing until five (5)
years from the Commencement Date (the "Expiration Date").
2. Position and Duties. During the Employment Period, Executive
-------------------
shall serve as the Executive Vice President and Chief Technical Officer of the
Company and shall report directly to the President and Chief Operating Officer
of the Company. Executive shall be responsible for the efficient performance
of Executive's duties hereunder and will at all times operate within the goals,
guidelines, budgets, policies and procedures now or hereafter established by the
Company. It is anticipated that Executive shall participate in certain industry
association activities with the approval of the President of the Company.
During the Employment Period, Executive shall devote his entire business time to
the services required of him hereunder, except for vacation time and reasonable
periods of absence due to sickness, personal injury or other disability.
3. Compensation.
------------
(a) Base Salary. The Company shall pay Executive an annual salary of
-----------
$220,000. Upon the first anniversary of the Commencement Date, and annually
thereafter, the Company shall review Executive's base salary in light of the
performance of Executive and the Company, and may, in its discretion, increase
such base salary by an amount it determines to be appropriate. Executive's
annual base salary payable hereunder, as it may be increased from time to time,
is referred to herein as "Base Salary". The Company shall pay Executive his
Base Salary in equal semi-monthly installments, or in such other installments as
the Company pays other similarly situated executive officers of the Company.
(b) Annual Bonus. For each calendar year or part thereof during the
------------
Employment Period (other than the first calendar year as provided in subsection
(c) below), Executive shall be eligible to receive an annual performance-
oriented incentive bonus. Such bonus, if any, shall range from 50%-100% of
Executive's Base Salary as determined by the Company in accordance with the
Executive achieving or exceeding certain budgeted and other objectives
established by the President and the Company consistent with the Company's
annual budgets. Any bonuses payable under this Section 3(b) shall be paid to
------------
Executive at the same time as bonuses are paid to other similarly situated
executive officers of the Company.
(c) Guaranteed Bonus . After the first calendar year of the Employment
----------------
Period, the Company agrees to pay Executive a guaranteed bonus of 100% of
Executive's Base Salary (the "Guaranteed Bonus").
4. Equity Interest.
---------------
(a) Grant of Equity Interest. Within 30 days of the date hereof,
------------------------
Executive shall receive 3,139.79 shares of common stock (the "Shares") of PCS.
(b) Vesting of Shares. The Shares will vest in accordance with the
-----------------
following schedule:
Vesting Date
------------
(i) First Anniversary of the later of the Commencement Date
or the consummation of the transactions contemplated by that
certain Securities Purchase Agreement dated as of
October 8, 1997 by and among AT&T Wireless PCS Inc.,
the Initial Cash Equity Investors referred to on Schedule I thereto,
the Management Stockholders listed on Schedule II thereto
and PCS (the "Closing") 17%
2
(ii) Second Anniversary of the later of the Commencement Date
or the Closing 17%
(iii) Third Anniversary of the later of the Commencement Date
or the Closing 17%
(iv) Fourth Anniversary of the later of the Commencement Date
or the Closing 17%
(v) Fifth Anniversary of the later of the Commencement Date
or the Closing 17%
The remaining 15% of the Shares shall vest based upon PCS achieving certain
performance milestones established by the President of the Company consistent
with the Company's annual budgets.
Assuming that PCS achieves its projected earnings (as specified in PCS'
projections used to secure PCS' permanent financing) on the seventh year of its
business plan, and Executive has been employed by the Company through the
vesting period, it is anticipated that the Shares will have a value of
$2,000,000, but in no event will the Shares be less than 8% of the unallocated
portion (i.e., 20%) of the management equity stake (i.e., 10% of PCS' common
equity); provided however, that the Company makes no guaranty that PCS will
-------- -------
achieve its projections.
Executive hereby agrees the Shares shall be subject to the terms and
conditions contained in a certain letter agreement and stockholders agreement to
be entered into between management executives of the Company and PCS.
(c) Additional Vesting Rights. In the event of a termination of this
-------------------------
Agreement pursuant to Section 6(e) or 6(f), in addition to any Shares that had
--------------------
theretofore vested in accordance with the foregoing schedule, (i) the percentage
of unvested Shares which would have vested in the year following the year in
which Executive's employment was terminated and (ii) a prorata amount (based on
the number of days Executive was employed during the year employment was
terminated divided by 365) of the Shares that would have vested at the end of
the year in which Executive's employment was terminated shall vest immediately
upon such termination.
5. Supplemental Employment Benefits.
--------------------------------
(a) Benefit Plans. During the Employment Period, Executive shall be
-------------
eligible to participate in those medical, health and disability insurance plans
that are offered to similarly situated executive officers of the Company (to the
extent that Executive is eligible to participate in any such plan under the
generally applicable provisions thereof). The benefit plans currently being
afforded to such executive officers are set forth on Schedule I. The Company
----------
may amend any such plan from time to time in its sole discretion.
3
(b) Vacation. Executive shall be entitled to up to three (3) weeks
--------
paid vacation annually in accordance with the Company's policies and practices.
(c) Business Expenses. The Company shall pay or reimburse Executive for
-----------------
all reasonable expenses incurred or paid by Executive in performance of
Executive's duties hereunder, upon presentation of expense statements or
vouchers and such other information as the Company may reasonably require.
(d) Relocation Expenses. The Company shall reimburse Executive for the
-------------------
following relocation expenses incurred in connection with his employment
hereunder and shall pay Executive an additional amount in cash equal to his
income tax liability attributable to the receipt of such relocation expenses
("Relocation Expenses"): (i) customary broker's commission, legal fees, and real
estate transfer taxes related to the sale of Executive's current home; (ii) a
reasonable number of house hunting trips to find a new home; (iii) closing costs
associated with the purchase of a new home; (iv) reasonable professional
packing, delivery and unpacking expenses; (v) reasonable temporary housing
costs; and (vi) reasonable miscellaneous expenses to cover the loss of window
treatments and other similar furnishings that cannot be reused in the new home.
The Relocation Expenses shall be reimbursed by the Company as incurred by the
Executive; provided however, the Executive agrees to refund the Company for
-------- -------
Relocation Expenses as follows: (i) in the event the Executive's employment with
the Company is terminated at any time prior to the date which is 12 months from
the Commencement Date, Executive shall repay the Company 100% of the Relocation
Expenses previously paid by the Company; and (ii) in the event the Executive's
employment with the Company is terminated at any time between 12 and 18 months
from the Commencement Date, Executive shall repay the Company a percentage of
the Relocation Expenses previously paid by the Company as follows:
Percentage of Relocation
Date of Termination Expenses Repaid
-------------------- ------------------------
Between 12 and 14 months from the Commencement Date 66 2/3
Between 14 and 15 months from the Commencement Date 50
Between 15 and 18 months from the Commencement Date 33 1/3
(e) Temporary Living Arrangement. Executive will be provided with
----------------------------
reasonable temporary living arrangements in the Malvern, PA vicinity for a
period of up to six months, commencing on the Commencement Date.
6. Termination of Employment. This Agreement and Executive's
-------------------------
employment hereunder may be terminated:
(a) at any time by the Company for Cause (as hereafter defined);
4
(b) at any time voluntarily by Executive, upon sixty (60) days' prior
written notice to the Company;
(c) by the Company immediately upon Executive's death;
(d) at any time by the Company, immediately upon giving Executive written
notice of a determination that Executive has been incapacitated by accident,
sickness, or otherwise so as to render Executive mentally or physically
incapable of performing in any material respect the services required of
Executive under this Agreement for a period of one hundred twenty (120)
consecutive days within any twelve (12) month period or a period of one hundred
eighty days (180) within any twenty-four (24) month period, upon the expiration
of such period or at any time thereafter;
(e) at any time by the Company without Cause, at the sole discretion of
the Company, upon sixty (60) days' prior written notice to the Executive; and
(f) at any time by Executive, upon sixty (60) days' prior written notice
to the Company, in the event that the employment by the Company of each of
Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxx has been terminated during the Employment
Period.
For purposes of this Agreement, "Cause" shall mean any of the following: (i) any
material breach by Executive of any provision of this Agreement or obligation
owed to the Company or any of its affiliates under this Agreement; (ii)
Executive's commission of a felony, a crime of falsehood, or a crime involving
moral turpitude; (iii) Executive's failure to follow the lawful, good faith
instructions of the Company's Chairman and Chief Executive Officer or President
and Chief Operating Officer, or (iv) Executive's breach of a fiduciary duty;
provided, however, that (x) prior to the Company's termination of Executive for
-------- -------
any breach or failure described in clauses (i), (iii) or (iv), during the
Employment Period Executive shall have one (and only one) period of thirty (30)
days after receipt of a written notice from the Company identifying such breach
or failure to cure such breach or failure; (y) Executive shall not have any
opportunity to cure any breach or failure described in clauses (i), (iii) or
(iv) that either by its nature is not susceptible to cure or that occurs
subsequent to the first of any such breaches or failures that was cured by
Executive pursuant to the immediately preceding clause (x); and (z) Executive
shall not have any opportunity to cure a commission described in clause (ii).
7. Amounts Due Upon Termination.
----------------------------
(a) In the event that this Agreement and Executive's employment by the
Company hereunder are terminated for any reason set forth in Section 6(a)
------------
through (d) prior to the Expiration Date, Executive shall be only entitled to
-----------
receive unpaid Base Salary through the date of termination.
(b) In the event that Executive's employment is terminated prior to the
Expiration Date pursuant to Sections 6(e) or 6(f), Executive shall be entitled
----------------------
to severance pay equal to 150% of Executive's then current Base Salary, payable
over a twelve (12) month period.
5
8. Covenant Not to Compete. Executive hereby acknowledges and recognizes
-----------------------
the highly competitive nature of the Business. Accordingly:
(a) Executive agrees that, during the Employment Period and continuing
during the Non-Competition Period (as hereinafter defined), Executive shall not:
i. be engaged, directly or indirectly, either for Executive's own
account or as agent, consultant, employee, partner, shareholder, investor,
creditor, officer, director, proprietor, investor, or otherwise of any person,
firm, corporation, or enterprise that is actively engaged in the business of
providing mobile wireless telecommunications services, in the Territory (as
hereinafter defined) unless the Company shall agree otherwise in writing;
ii. call on or solicit or divert or take away from the Company or the
Triton PCS Group (including by divulging to any competitor or potential
competitor of the Company or the Triton PCS Group) any person that is or was a
customer of the Company or the Triton PCS Group; or
iii solicit or employ or cause to be solicited or employed, for or on
behalf of Executive or any third party, any persons who are employees of the
Company or the Triton PCS Group at the date of termination of this Agreement or
at any time in the six (6) month period immediately prior thereto.
(b) For purposes of this Section 8, the phrase "Non-Competition Period"
---------
shall mean any period of time during which the Company is paying severance to
Executive pursuant to Section 7(b) hereof.
------------
(c) For purposes of this Section 8, the term "Territory" shall mean the
---------
geographic areas in which the Company or the Triton PCS Group conduct business
or have been granted licenses to conduct business. During the term hereof, and
continuing during the Non-Competition Period, the Territory shall be deemed to
be expanded and supplemented to reflect the then current geographic areas in
which the Company or the Triton PCS Group conduct business; provided, however,
-------- -------
that during the Non-Competition Period, the Territory shall not be deemed to be
expanded and supplemented for any geographic area in which Executive begins to
conduct business prior to the Company's or the Triton PCS Group's commencement
of business in that geographic area.
9. Nondisclosure.
-------------
(a) Executive acknowledges and agrees that during the term of this
Agreement Executive shall receive certain Confidential Information (as
hereinafter defined) relating to the Company and the Triton PCS Group. During
the term of Executive's employment hereunder and continuing after the
termination of this Agreement for any reason, Executive agrees that Executive
shall:
i. treat as secret and confidential all Confidential Information and
shall not, without the prior written consent of the Company, publish,
disseminate, disclose or otherwise make
6
any Confidential Information available to any third party other than executives
of the Company having a reasonable need therefor; and
ii. not use or permit Confidential Information to be used (a) in any
manner that may injure or cause loss or may be calculated to injure or cause
loss whether directly or indirectly to the Company or any of its affiliates or
(b) other than for purposes of this Agreement.
(b) For purposes of this Agreement, "Confidential Information" shall mean
all information, data, know-how, trade secrets, systems and procedures of a
technical or commercial nature in any form relating to the Company or the Triton
PCS Group, including techniques, discoveries, ideas, concepts, models,
prototypes, diagrams, drawings, designs, information regarding product
development, marketing plans, sales plans, management organization, operating
policies and manuals, business plans, financial records, packaging design,
pricing, cost and sales information, contractual arrangements, lists of
customers and prospective customers, information about employees, customers and
suppliers or other financial, commercial, business or technical data and
information relating to the Company or the Triton PCS Group. Confidential
Information does not include any information that (i) was publicly known prior
----------------
to its disclosure to Executive, (ii) becomes public knowledge (other than by an
act or omission of Executive or an affiliate of Executive), or (iii) Executive
is required to disclose by law.
(c) Executive further agrees that Executive shall not, after the
termination of Executive's employment hereunder, use or permit to be used any
notes, memoranda, drawings, computer discs, specifications, programs, data or
other materials that contain, incorporate or embody Confidential Information, it
being agreed that the foregoing shall be and remain the sole and exclusive
property of the Company and that immediately upon termination of Executive's
employment hereunder, Executive shall deliver all of the foregoing and all
copies thereof in Executive's possession, to the Company at its main office.
(d) If Executive breaches, or threatens to commit a breach of, any of the
provisions of this Agreement, the Company and the Triton PCS Group shall have
the right (in addition to any other rights and remedies available to the Company
and the Triton PCS Group at law or in equity) to equitable relief (including
injunctions) against such breach or threatened breach, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable harm to
the Company and the Triton PCS Group and that money damages would not be an
adequate remedy to the Company and the Triton PCS Group.
(e) Executive hereby agrees that each provision of Sections 8 and 9 shall
----------------
be treated as a separate and independent clause, and the unenforceability of any
one clause shall in no way impair the enforceability of any of the other clauses
herein. Moreover, if one or more of the provisions contained in this Agreement
shall for any reason be held to be excessively broad as to scope, activity or
subject so as to be unenforceable, such provision or provisions shall be
construed by the appropriate judicial body by limiting and reducing it or them,
so as to be enforceable to the extent compatible with the applicable law as it
shall then appear.
7
10. Notices. Any notice or other communication required or permitted
-------
hereunder shall be in writing and shall be deemed to have been duly given when
received if delivered personally against receipt; when transmitted if
transmitted by telecopy, electronic or digital transmission method with
electronic confirmation; the next business day if sent for next business day
delivery by a nationally recognized overnight courier service; or upon receipt
if sent by certified, registered or express mail, return receipt requested,
postage prepaid. In each case notice shall be sent as follows:
(a) if to the Company, to:
Triton Management Company, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Phone: (000) 000-0000
FAX: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxxx
---------
with a required copy to:
Kleinbard, Xxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Phone: (000) 000-0000
FAX: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esquire
---------
(b) if to Executive, to:
Mr. Xxxxx Xxxxx
------------------------------------------------
-------------------------------------------------
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
11. Benefits of Agreement: Assignment.
---------------------------------
(a) This Agreement and all rights hereunder shall be binding upon and
shall inure to the benefit of the parties hereto and their personal
representatives, successors and permitted assigns
(b) Neither party hereto may assign this Agreement or any rights
hereunder, except that the Company, shall have the right to assign this
Agreement and its rights hereunder to:
(i) an affiliate of the Company; provided that the Company shall
continue to be obligated hereunder after any such assignment; and
8
(ii) any successor in interest (not affiliated with the Company) to
all or substantially all of the business or assets of the Company pursuant to a
bona fide sale thereof and upon such assignment the Company shall be relieved of
its obligations hereunder.
12. Governing Law. This Agreement shall be governed by, construed and
-------------
enforced in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to principles of conflict of laws.
13. No Waiver. Either party's failure to enforce strictly any provision
---------
of this Agreement shall not be construed as a waiver thereof or excusing either
party from future performance.
14. Survival. Executive's obligations under this Agreement shall survive
--------
the termination of his employment to the extent set forth herein and shall be
binding upon Executive's heirs, executors and administrators.
15. Entire Agreement. This Agreement contains the entire understanding
----------------
between the parties with regard to the employment and compensation matters
described herein and may not be altered, amended, or modified except by writing
signed by both parties hereto.
16. Counterparts; Facsimile Signatures. This Agreement may be executed by
----------------------------------
the parties hereto in one or more separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one in the same instrument. Facsimile signatures on this
Agreement shall be deemed original signatures.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of
the date first above written.
COMPANY:
TRITON MANAGEMENT COMPANY, INC.
By:__________________________________________
Xxxxxx Xxxxxxx, President
EXECUTIVE:
---------------------------------------------
Xxxxx Xxxxx
9
SCHEDULE I
Benefit Plans
-------------
HEALTH
------
Medical, dental and prescription coverage to its regular full time employees.
The Company pays 100% of the aggregate insurance premium, but requires that the
employee contribute a percentage of the premium for any covered family members.
VISION
------
Vision insurance coverage to its regular full time employees at a rate of $425
per family member per two year period. Coverage is limited to reimbursement for
glasses, contacts and annual eye examinations.
DISABILITY INSURANCE
--------------------
Disability insurance to its regular full time employees who have more than six
months of continuous service. After ten continuous days of absence, employees
are eligible for payment under the company's short term disability plan.
Employees receive 60% of the gross wages to maximum of $1,000 per week for a
period of 60 days. On the 61st day of continuous absence employees are eligible
for payment under the company's long term disability policy. Employees shall
receive 60% of gross wages to a maximum of $6,000 per month until the earlier of
return to work or age 65.
10
