SKYTEL COMMUNICATIONS, INC.
CHANGE OF CONTROL SEVERANCE BENEFITS AGREEMENT
This AGREEMENT is made and entered into as of the ___ day of _________,
_____ ("Effective Date") by and between __________ (the "Executive") and SkyTel
Communications, Inc., a Delaware corporation (the "Company").
WITNESSETH:
WHEREAS, the Company desires to continue to employ the Executive and to
enter into an agreement to provide for severance benefits to the Executive upon
a Change of Control (as hereinafter defined) of the Company, subject to the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS.
Unless the context otherwise requires, the following terms shall have the
meaning ascribed to them below:
(a) "Cause" means the occurrence of any of the following:
-----
(i) the commission by the Executive of any act of fraud or
embezzlement against the Company of any affiliate;
(ii) the conviction of the Executive of a felony;
(iii) the breach by the Executive of any restrictive covenant or non-
competition/non-solicitation provision applicable to Executive;
or
(iv) the willful and continual failure by the Executive to perform
any of his duties or responsibilities and the failure of the
Executive to cure the same within thirty (30) days after written
notice thereof from the Company.
(b) "Change of Control" means the occurrence of any of the following
------------------
events:
(i) any "person" or "group," as such terms are used under Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), other than the Company, any
trustee or any other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of Common
Stock of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3
under the Exchange Act), of securities of the Company
representing thirty percent (30%) or more of the combined voting
power of the Company's voting securities then outstanding;
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors
of the Company, cease for any reason to constitute a majority
thereof (unless the election, or nomination for election by the
Company's stockholders, of such director was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of such period
or whose election or nomination for election was previously so
approved).
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with another corporation, other
than (A) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving
entity) more than eighty percent (80%) of the combined voting
power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation affected to
implement a recapitalization of the Company (or similar
transaction) in which no "person" (as hereinabove defined)
acquires more than thirty percent (30%) of the combined voting
power of the Company's voting securities then outstanding voting
securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or any agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
(c) "Confidential Information" means data and information relating to the
------------------------
business of the Company which is or has been disclosed to the
Executive during the term of his or her employment with the Company
or any of its subsidiaries or of which the Executive became aware as
a consequence of or through his or her relationship to the Company or
any of its subsidiaries. Confidential Information shall not include
any data or information that has been voluntarily disclosed to the
public by the Company (except where such public disclosure has been
made by the Executive without authorization), or that has been
independently developed and disclosed by others, or that otherwise
enters the public domain through lawful means.
2
(d) "Good Reason" means the occurrence of any of the following events:
-----------
(i) the modification of the Executive's job title, position or
responsibilities without the Executive's prior written
consent;
(ii) the change of the location where the Executive is based to a
location which is more than thirty-five (35) miles from his
present location without the Executive's prior written
consent; or
(iii) the reduction of the Executive's actual or projected annual
salary and bonus by more than ten percent (10%) from the sum
of the highest rate of the Executive's actual annual salary
and bonus in effect within two years immediately preceding the
Change of Control.
2. BENEFITS UPON A CHANGE OF CONTROL
(a) Severance Benefits. If the Executive's employment with the Company
------------------
is terminated (i) by the Company (or by the acquiring or successor
business entity following a Change of Control) other than for Cause,
death or disability, or (ii) by the Executive for Good Reason, in
either event within a period beginning 180 days before, and ending
one year after, the date of a Change of Control, the Executive shall
receive a severance benefit in an amount equal to two times the sum
of:
(x) the Executive's highest annual cash base salary in effect
within two years immediately preceding the Change of Control;
plus
(y) the average of the Executive's annual bonuses paid for the
two calendar years immediately preceding the Change of
Control.
(b) Form of Payment. The amount of the severance benefit provided in
---------------
Section 2(a) hereof shall be paid to Executive in two installments,
the first installment payable as soon as practicable after the
occurrence of the event giving rise to the payment of the severance
benefit by the Company hereunder, but in no event more than thirty
(30) days thereafter, and the second installment payable one year
following the occurrence of such event provided, however, that the
severance benefit payable by the Company pursuant to Section 2(a)
hereof will be reduced by any other cash payments made to the
Executive pursuant to any other written agreement between the
Executive and the Company as a result of the occurrence of a Change
of Control.
(c) Parachute Payment Offset. Notwithstanding the provisions of Section
------------------------
2(a) hereof, if payments and benefits under this Agreement when
combined with all other "payments in the nature of compensation"
(within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code") payable in the event of a Change of
Control would result in a "parachute payment" within the meaning of
Code Section 280G of the Code, as determined by the Company, then
the aggregate payments and benefits hereunder shall not exceed the
largest amount (when combined
3
with all other "payments in the nature of compensation"), as
determined by the Company, that can be paid to the Executive by the
Company without resulting in a "parachute payment." In the event the
aggregate payments and benefits hereunder are required to be
reduced, Executive shall be entitled to choose which payments and
benefits hereunder will be reduced.
3. MITIGATION. The Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise, and the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned by the Executive
as a result of employment by another employee or by retirement benefits
except as provided in Sections 2(b) and 2(c) hereof.
4. NON-COMPETITION, NON-SOLICITATION AND NON-DISCLOSURE OF PROPRIETARY
INFORMATION.
(a) Agreement Not to Compete. The Executive agrees that for a period of
------------------------
one(1) year after the termination of his employment with the Company
(the "Applicable Period"), the Executive will not (except with the
prior written consent of the Company) engage in or assist
indirectly, whether as an officer, director, partner, owner,
employee, consultant, agent or otherwise, or have a controlling
interest in any business or enterprise that competes in the United
States with the business of providing one-way or two-way messaging
businesses in which the Company and its subsidiaries are engaged.
(b) Agreement Not to Solicit Customers. The Executive agrees that during
----------------------------------
the Applicable Period he will not, either directly or indirectly, on
the Executive's own behalf or in the service of or on behalf of
others, solicit or divert, or attempt to solicit or divert any
individual or entity (i) which was a customer of the Company or any
of its subsidiaries affiliates or joint ventures, or (ii) with whom
the Executive had direct or indirect contact as part of his
employment during the Executive's last year of employment with the
Company or any of its subsidiaries, affiliates or joint ventures.
(c) Agreement Not to Solicit Employees. The Executive agrees that during
----------------------------------
the Applicable Period he will not, either directly or indirectly, on
the Executive's own behalf or in the service of or on behalf of
others, solicit, divert or hire away, or attempt to solicit, divert
or hire away, any person employed by the Company or any of its
subsidiaries, affiliates or joint ventures.
(d) Agreement Not to Disclose Confidential Information.
--------------------------------------------------
(i) Confidentiality. All Confidential Information and all
---------------
physical embodiments thereof received or developed by the
Executive while employed by the Company are confidential
and will remain the sole and exclusive property of the
Company. The Executive will hold such Confidential
Information in trust and strictest confidence and will not
use, reproduce, distribute, publicly disclose or otherwise
disseminate to any third party any Confidential
4
Information or any physical embodiments thereof for a
period of two (2) years following the termination of
Executive's employment with the Company.
(ii) Return of Company Property. Upon termination of the
--------------------------
Executive's employment with the Company, the Executive will
promptly deliver to the Company all property belonging to
the Company including, without limitation, all Confidential
Information then in the Executive's custody, control or
possession.
(e) Terms of This Section Not to Supersede Other Restrictive Provisions.
-------------------------------------------------------------------
The terms and conditions contained in this Section shall not supersede
the terms and conditions of any other agreements applicable to the
Executive, but are in addition thereto.
5. TERM. This Agreement shall remain in effect until earlier of (a) one year
after the occurrence of a Change of Control; or (b) three years from the
Effective Date of this Agreement; provided that if a Change of Control
occurs between the second and third years following the Effective Date,
this Agreement will terminate one year after the Change of Control.
6. NO GUARANTEE OF EMPLOYMENT. Notwithstanding any other provision of this
Agreement to the contrary, nothing in this Agreement shall entitle the
Executive to be employed for any certain period of time by the Company or
its subsidiaries or affiliates, and the Company or the Executive shall have
the right to terminate the employment relationship at any time.
7. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and warrants
to the Executive that: (a) this Agreement has been duly authorized,
executed and delivered to the Company and constitutes the valid and binding
obligation of the Company enforceable in accordance with its terms; (b) the
execution and delivery of this Agreement by the Company does not violate
any provision of applicable law, rule or regulation, or the certificate of
incorporation or bylaws of the Company.
8. WAIVER OF BREACH. It is agreed that failure on the part of one party to
this Agreement to seek to enforce this Agreement as to a specific breach
will not constitute a waiver by that party of its or his right to enforce
the Agreement as to similar or other breaches of the Agreement thereafter.
9. AMENDMENTS; FURTHER ACTIONS. This Agreement may not be altered, modified
or amended except by a written instrument signed by each of the parties
hereto. The Company shall take whatever additional actions may be necessary
or appropriate to carry out its obligations under this Agreement and to
permit the Executive to enforce his other rights and benefits hereunder.
10. ASSIGNMENT; SURVIVAL OF RIGHTS.
5
(a) Neither this Agreement nor any of the rights or obligations hereunder
may be assigned or delegated by the Executive, provided, however, that
this Agreement and all the benefits to which the Executive is entitled
hereunder shall inure to the benefit of and be enforceable by the
estate of the Executive and the Executive's personal or legal
representatives, executors, administrators, heirs and beneficiaries.
(b) This Agreement shall be binding upon the Company and its successors
and assigns. Upon the occurrence of a Change of Control, the Company
shall assign this Agreement to the acquiring or successor business
entity effective as of the date of such Change of Control, and such
acquiring or successor business entity shall assume and perform all of
the obligations, terms and provisions imposed by this Agreement upon
the Company. The Company shall take whatever actions are necessary or
appropriate to assure that such acquiring or successor entity
expressly assumes the obligations of the Company to Executive under
this Agreement and shall cause such successor business entity to
evidence the assumption of such obligations in an agreement
satisfactory to the Executive.
11. 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 contained herein shall not be affected thereby.
12. ENTIRE AGREEMENT. This agreement contains the entire understanding of the
parties with respect to the subject matter hereof.
13. NOTICES. Notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United State registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive to:
__________________
__________________
If to the Company to:
SkyTel Communications, Inc.
000 Xxxxx Xxxxx Xxxxxx
Skytel Centre, South Building
Jackson, Mississippi 39201
Attn: Senior Vice President and General Counsel
or to such other address as the Executive or the Company shall designate in
writing in accordance with this Section 13, except that notices regarding
changes in address shall be effective only upon receipt.
6
14. HEADINGS. Heading to sections in this Agreement are for the convenience of
parties only and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement.
15. GOVERNING LAW. This Agreement shall be governed by the laws of the State of
Mississippi without reference to the principles of conflict of laws. The
parties hereto consent to the jurisdiction of the federal and state courts
of the State of Mississippi in connection with any claim of controversy
arising out of or in connection with this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first written.
SKYTEL COMMUNICATIONS, INC.
----------------------------------------
Name:
Title:
EXECUTIVE
----------------------------------------
Name:
Title:
7
