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EXHIBIT 10.59
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of January 1, 1999
(the "Effective Date"), is entered into by Omnipoint Corporation (the
"Company"), and Xxxxxxx X. Xxxxx (the "Executive").
The Company desires to continue to employ the Executive, and the Executive
desires to continue to be employed by the Company. In consideration of the
mutual covenants and promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the parties agree as follows:
1. Term of Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby accepts employment with the Company, upon the terms set
forth in this Agreement, for the period commencing on the Effective Date and
ending on the close of business on the third anniversary of the Effective Date
(the "Term"), unless sooner terminated in accordance with the provisions of
Section 4.
2. Title; Capacity. During the Term, the Executive shall serve as
President/CEO and as Chairman or Vice Chairman (for purposes of this Agreement,
references to the title "Chairman" shall include the position of Chairman or
Vice Chairman) of the Board of Directors (the "Board") of the Company or, within
the discretion of the Board, solely as Chairman.
The Executive hereby accepts such employment and agrees to undertake the
authority, duties and responsibilities which are assigned by the Board from time
to time, including authority, duties and responsibilities with respect to
planning, negotiating and consummation of strategic transactions involving the
Company and its subsidiaries. While serving as President/CEO, the Executive
shall report directly to the Board and his duties and authority shall be
commensurate with his position as President/CEO. While serving as Chairman, the
Executive's principal responsibilities shall include data services. The
Executive agrees to devote his entire business time, attention and energies to
the business and interests of the Company during the Term; provided that for
reasonable periods of time each month the Executive may engage in
non-competitive business or charitable activities so long as such activities do
not interfere with the Executive's responsibilities hereunder. The Executive
agrees to abide by the rules, regulations, instructions, personnel practices and
policies of the Company and any changes therein which may be adopted from time
to time by the Company. The Executive acknowledges receipt of copies of all such
rules and policies committed to writing as of the date of this Agreement.
3. Cash Compensation and Benefits.
3.1 Cash Compensation While Serving as President/CEO and Chairman.
While the Executive serves as both President/CEO and Chairman, the Company shall
pay the Executive an annual salary ("Salary") equal to $300,000, and the
Executive shall be eligible for an annual target bonus of $300,000, if Executive
satisfies target objectives set by the Board in its
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sole discretion, which shall be exercised in good faith ("Target Bonus").
Notwithstanding the foregoing, only while serving as President/CEO and Chairman
during the Term, (a) the amount of the Executive's Target Bonus opportunity
shall not be reduced below $300,000 annually (although the amount of the Target
Bonus earned and actually paid may be less than $300,000 annually depending on
the Executive's satisfaction, or failure to satisfy, the target objectives set
for the year by the Board in its sole discretion, which shall be exercised in
good faith), and (b) the Executive's Cash Compensation (as defined below) for
any calendar year shall be equivalent to or greater than the Cash Compensation
of any other senior officer of the Company for such calendar year. For purposes
of this Agreement, the term "Cash Compensation" means salary and any other cash
compensation which has been previously earned and which is payable in the
relevant calendar year (determined without regard to any voluntary or mandatory
payment deferrals where the deferred amount is credited with earnings or
interest at a market rate), except that (i) the Executive's Target Bonus, and
bonus payable to any other executive based on targets or objectives established
by the Company, shall be taken into account at the target amount without regard
to the actual amount of such bonus that is earned and payable, (ii) the
Executive's Incentive Bonus shall be taken into account in the year in which it
is paid and only to the extent of the amount actually paid, and (iii) Cash
Compensation shall not include hiring bonuses, commissions, special incentives
or compensation for special projects.
3.2 Salary and Target Bonus While Serving only as Chairman. If during
any portion of the Term the Executive is not serving as President/CEO but is
serving only as Chairman, then the Executive shall (a) continue to receive the
Salary specified in Section 3.1, (b) shall be eligible for a Target Bonus
opportunity of $300,000 (although the amount of the Target Bonus earned and
actually paid may be less than $300,000 depending on the Executive's
satisfaction, or failure to satisfy, the target objectives set by the Board in
its sole discretion, which shall be exercised in good faith) only for the first
full twelve (12) months of the Term following the date the Executive ceases to
serve as President/CEO, and (c) be eligible for bonuses after the expiration of
the twelve- (12-) month period described in clause (b) of this Section 3.2, in
such amounts and based on such criteria as may be reasonably agreed upon by the
Executive and the Board, commensurate with the Executive's responsibilities as
Chairman.
3.3 Benefits. While serving as President/CEO and/or Chairman during
the Term, the Executive shall be entitled to participate in all benefit programs
that the Company makes available to its other senior executive employees, except
to the extent Executive's participation in such program would not be permitted,
or would result in adverse federal income tax consequences to the Company or to
any other participant in such program, because the Executive, if serving solely
as Chairman, would not then be deemed to be a common law employee of the
Company, as determined by the Company on the basis of an opinion of counsel
reasonably acceptable to the Executive. In addition, while the Executive is
serving as President/CEO and/or Chairman during the Term, the Company will
provide Executive with $5 million in non-permanent life insurance protection and
disability insurance protection equal to 60 percent of Salary.
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3.4 Incentive Bonus.
(a) If the Company or any of its subsidiaries consummates a
Transaction (as defined below) and either
(i) such Transaction was consummated, or an agreement or
letter of intent providing for such Transaction was entered into, while
Executive was serving as President/CEO and/or Chairman pursuant to this
Agreement, or
(ii) such Transaction was consummated or an agreement or
letter of intent providing for such Transaction was entered into within 12
months (24 months with respect to a subsequent Transaction if one or more prior
Transactions have been completed and the subsequent Transaction is with the same
party) following the date of termination of Executive's service under this
Agreement by the Company without Cause (as defined in Section 4.3), by the
Executive for Good Reason (as defined in Section 4.4), or by reason of the
expiration of the Term or by reason of death or Disability, if the party with
whom the Transaction was consummated engaged in discussions with the Company
regarding a Transaction or possible Transaction during the Executive's service
under this Agreement,
then, unless the Executive's employment with the Company has previously been
terminated by the Company for Cause or by the Executive without Good Reason,
upon consummation of any such Transaction, the Company shall pay Executive an
incentive bonus ("Incentive Bonus") equal to 400% of Salary and Target Bonus
opportunity (which Target Bonus opportunity shall not be less than $300,000 for
this purpose, even if the Executive is serving only as Chairman). No more than
one Incentive Bonus shall be paid to Executive, regardless of the number of
Transactions that may occur or the nature or effect of any transaction, provided
that this sentence shall not limit Executive's right to receive his full
Incentive Bonus with respect to a series or combination of related transactions
that comprise a Transaction.
(b) For the purposes of this Agreement, the term
"Transaction" means any transaction or series or combination of related
transactions, other than in the ordinary course of business, involving $200
million or more in consideration, whereby, directly or indirectly, control of or
a material interest in the Company or any of its businesses, or a material
amount of any of their assets, is transferred for consideration, including
without limitation, by means of sale or exchange of capital stock or assets, a
merger or consolidation, a tender or exchange offer, a leveraged buy-out, a
minority investment, the formation of a joint venture or partnership, or any
similar transaction, excluding, however, any transaction involving the stock or
assets of Omnipoint Technologies, Inc. and any public offering of capital stock
(other than as part of a transaction that would otherwise constitute a
Transaction).
(c) Notwithstanding the foregoing, in connection with any
Transaction that combines interim financing with a subsequent merger, tender or
exchange offer, asset disposition or other business combination or change of
control transaction (a "Subsequent Transaction"), upon the closing of an interim
financing of $200 million or greater, the Company
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shall pay to the Executive that portion of the Incentive Bonus that is equal to
250% of Salary and the Target Bonus opportunity, unless the Executive's
employment with the Company has previously been terminated by the Company for
Cause or by the Executive without Good Reason, and the balance of the Incentive
Bonus upon the earlier to occur of the consummation of the Subsequent
Transaction or the termination of the agreement providing for the Subsequent
Transaction.
3.5 Reimbursement of Expenses.
(a) The Company shall reimburse the Executive for actual
reasonable legal fees and related expenses incurred in connection with the
negotiation and review of this Agreement and the Registration Rights Agreement,
upon presentation to the Company by the Executive of invoices for such legal
fees.
(b) The Company shall reimburse the Executive for all
reasonable travel, entertainment and other expenses incurred or paid by the
Executive in connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement, upon timely presentation by
the Executive of documentation, expense statements, vouchers, and such other
supporting information as the Company may request consistent with standard
Company practices.
4. Employment Termination. The employment of the Executive by the Company
pursuant to this Agreement shall terminate upon the occurrence of any of the
following:
4.1 Expiration of the Term in accordance with Section 1.
4.2 The death or Disability of the Executive. For purposes of
this Agreement, the term "Disability" shall have the meaning prescribed by any
disability insurance coverage provided pursuant to Section 3.3 or, if there is
no such coverage, then "Disability" shall mean "permanent and total disability"
as defined in section 22(e)(3) of the Internal Revenue Code of 1986, as amended.
4.3 At the election of the Company, with or without Cause. For
the purposes of this Agreement, the term "Cause" means either (a) the conviction
of the Executive of, or the entry of a plea of guilty or nolo contendere by the
Executive to, any felony or any other crime involving moral turpitude that may
reasonably be expected to have an adverse impact on the Company's reputation or
standing in the community, or (b) willful misconduct by the Executive in
connection with the performance of his duties hereunder, or willful failure by
the Executive to perform his responsibilities hereunder, except in cases
involving the mental or physical incapacity or Disability of the Executive;
provided, however, that the Company may terminate the Executive's employment
with cause pursuant to this Section 4.2(b) only after the failure by the
Executive to correct or cure, or to commence and continue to pursue the
correction or curing of, such misconduct or failure within thirty (30) days
after receipt by the Executive of written notice by the Board of each specific
claim of any such misconduct or failure. The Executive shall have the
opportunity to appear before the Board to discuss such written notice during
such thirty (30) day period. "Willful misconduct" and "willful failure to
perform" shall not include action or
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inaction on the part of the Executive which were taken or not taken in good
faith by the Executive.
4.4 At the election of the Executive, with or without Good Reason.
For purposes of this Agreement, "Good Reason" means (a) a material breach of
this Agreement by the Company, (b) if the Executive is then serving as
President/CEO, a change in the Executive's duties and authority from those
commensurate with his position as President/CEO, or reporting responsibilities
as President/CEO, in the latter case, requiring the Executive to report to
someone other than the Board, or (c) a change in the Executive's principal place
of business from Bethesda, Maryland. Good Reason shall not include removal of
the Executive from his position as President/CEO if he remains Chairman.
Upon the termination of the Executive's employment as provided in this Section
4, the Executive shall have no further obligations hereunder except as provided
in Sections 6, 7, and 8, and the Company shall no obligation to pay any
additional amounts to the Executive (other than accrued and unpaid salary, bonus
and any other amounts due hereunder that are owed with respect to periods
through the date of termination), except as required by Sections 3.3, 3.4, 3.5,
5, 8 and 9 and the Term Sheet attached hereto regarding sales of shares.
5. Severance.
5.1 Severance. If the Executive's employment as President/CEO
and Chairman (or as Chairman if he is then serving only in that capacity as
provided in Section 2) is terminated by Executive for Good Reason, by the
Company without Cause, or as a result of death or Disability, the Company will
pay the Executive (a) upon such termination, a lump sum amount equal to the sum
of the Executive's Salary for the immediately preceding twelve (12) month period
and his last Target Bonus (the "Severance Amount"), and (b) beginning one year
after such termination, an additional amount equal to the Severance Amount in
twelve (12) equal monthly installments over the next twelve (12) month period.
The Company may elect at the time of termination of the Executive's employment
to make payments pursuant to the preceding clause (b) of this Section 5.1 for
less than twelve (12) months, provided that the non-compete restrictions set
forth in Section 6.1 shall also cease at the end of such period (such period of
twelve (12) or fewer months shall be referred to herein as the "Period").
Notwithstanding any other provision of this Agreement to the contrary, no
severance or other amounts (other than compensation and benefits earned and
payable as of the date of termination without regard to future services and
other than the Incentive Bonus, the payment of which is subject to the
provisions of Section 3.4) will be paid if (x) Executive voluntarily terminates
employment without Good Reason, (y) the Company terminates Executive's
employment for Cause, or (z) the Executive's employment terminates at the end of
the Term. The failure to pay severance or other amounts pursuant to the
immediately preceding sentence or pursuant to Section 6.5 shall not be deemed to
be an election by the Company not to pay severance under clause (b) of this
Section 5.1, and thus the terms of Section 6.1 shall continue to apply. No
termination of employment or service under this Agreement shall be deemed to
occur if the Executive ceases to serve as President/CEO but the Executive is
asked to continue as Chairman with a Salary and bonus opportunity as provided in
Sections 3.2 and 3.4 and benefits as provided in Section 3.3.
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5.2 Benefit Continuation. If Executive's employment as President/CEO
and Chairman (or as Chairman if he is then serving only in that
capacity as provided in Section 2) is terminated by Executive for Good Reason or
by the Company without Cause, the Executive shall be entitled to continued
benefits as provided in Section 3.3 for a period of twelve (12) months from the
date of such termination plus such additional period that the Company continues
to make severance payments pursuant to Section 5.1(b).
6. Non-Compete.
6.1 So long as the Company is not in breach of this Agreement,
during the term of the Executive's employment or service hereunder and for a
period ending at the end of the Period (but in no event more than two years
after the termination of the Executive's employment or service hereunder), the
Executive will not directly or indirectly, other than through his ownership of
stock of the Company, as an individual proprietor, partner, stockholder,
officer, employee, director, joint venturer, investor, lender, or in any other
capacity whatsoever (other than as the holder of not more than five percent (5%)
of any class of outstanding stock of a publicly held company), engage in the
business of providing wireless personal communication or wireless data services
in any geographic region served by the Company.
6.2 So long as the Company is not in breach of this Agreement, during
the term of the Executive's employment or service hereunder and for a period of
180 days after the termination thereof, the Executive will not directly or
indirectly:
(a) recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company or its affiliates to terminate their
employment with, or otherwise cease their relationship with, the Company or its
affiliates; or
(b) solicit, divert or take away, or attempt to divert or to
take away, the investment, business or patronage of any of the investors,
clients, customers or accounts, or prospective investors, clients, customers or
accounts, of the Company or its affiliates which were contacted, solicited,
negotiated or served by the Company while the Executive was employed by the
Company.
6.3 The parties agree that the relevant public policy aspects
of covenants not to compete have been discussed, and that every effort has been
made to limit the restrictions placed upon the Executive to those that are
reasonable and necessary to protect the Company's legitimate interests.
6.4 If any restriction set forth in this Section 6 is found by
any court of competent jurisdiction to be unenforceable because it extends for
too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.
6.5 The restrictions contained in this Section 6 are necessary
for the protection of the business and goodwill of the Company and/or its
affiliates and are considered by the
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Executive to be reasonable for such purposes. The Executive agrees that any
breach of this Section 6 will cause the Company and/or its affiliates
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Company
shall have the right to seek specific performance and injunctive relief and to
discontinue the payment of severance pursuant to Section 5.1. The Executive
acknowledges that he has received compensation for the terms of this Section 6.
7. Proprietary Information and Developments.
7.1 Proprietary Information.
(a) The Executive agrees that all information and know-how,
whether or not in writing, relating to the business, technical or financial
affairs of the Company and that is generally understood in the industry as being
trade secret, confidential and/or proprietary, that is designated as being
confidential or proprietary information of the Company, either verbally or in
writing, or that is designated as representing trade secrets of the Company,
either verbally or in writing (collectively, "Proprietary Information"), is and
shall be the exclusive property of the Company. For purposes of this Agreement,
Proprietary Information shall mean, by way of illustration and not limitation,
all confidential information owned, possessed or used by the Company, including,
without limitation, any project, development, plan, vendor information, supplier
information, customer information, apparatus, equipment, trade secret, process,
research, reports, clinical data, financial data, technical data, test data,
know-how, computer program, software, software documentation, hardware design,
technology, marketing or business plan, forecast, unpublished financial
statement, budget license, patent applications, contracts, joint ventures,
price, cost and personnel data.
(b) The Executive agrees not to and will not disclose any
Proprietary Information to others outside the Company or use the same for any
unauthorized purposes without written approval of the Board, from the Effective
Date, during or after his employment unless and until such Proprietary
Information (i) has become public knowledge through legal means without fault by
the Executive, or (ii) is already public knowledge prior to the signing of this
Agreement.
(c) The Executive agrees that all files, letters, memoranda,
reports, records, or other written, photographic, magnetic or other tangible
material containing or embodying Proprietary Information, whether created by the
Executive or others, which shall come into his custody or possession
(hereinafter collectively referred to as the Company Records) shall be, shall
continue to be and are the exclusive property of the Company to be used by the
Executive only in the performance of his duties for the Company. All such
Company Records or copies thereof and all other tangible property of the Company
in the custody or possession of the Executive shall be delivered to the Company,
upon the earlier of (i) a request by the Company or (ii) termination of this
Agreement. After such request, termination or delivery, the Executive agrees not
to and shall not retain any such Company Records or copies thereof or any such
other tangible property.
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7.2 Where the term "Company" is used in this Section 7 it will be
deemed to include any affiliate of the Company.
8. Certain Additional Payments by the Company
8.1 Excise Tax Protection. In the event it shall be determined that
any payment or distribution by the Company to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 8)(a "Payment") would be subject
to the excise tax imposed by Section 4999 (or any successor provision) of the
Internal Revenue Code of 1986, as amended, or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Company shall pay to the Executive an
additional amount (a "Gross-Up Payment") such that, after payment by the
Executive of all income and employment taxes and any Excise Tax imposed upon the
Gross-Up Payment, the Executive will retain an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
8.2 Determinations. Subject to the provisions of Section 8.3
below, all determinations required to be made under this Section 8.2, including
whether and when a Gross-Up Payment is required, the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by an independent accounting firm reasonably acceptable to the
Company and the Executive (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as may be requested by the Company. The Accounting Firm may
employ and rely upon the opinions of actuarial or accounting professionals to
the extent it deems necessary or advisable. In the event that the Accounting
Firm determines for any reason that it is unable to perform such services, or
declines to do so, the Company shall select another nationally recognized
accounting firm to make the determinations required under this section (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment determined pursuant to this Section 8.4 shall be paid by
the Company to the Executive within five business days of the Company's receipt
of the Accounting Firm's determinations. If the Accounting Firm determines that
no Excise tax should be payable by the Executive, the Accounting Firm shall be
requested to furnish the Executive with a written opinion that failure to report
the Excise Tax on the Executive's applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon the Company and the Executive. As a
result of possible uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made or that the Gross-Up Payments which are made by the
Company will be insufficient to satisfy the Excise Taxes and/or all applicable
income taxes incurred by the Executive on the Gross-Up Payments (in either case,
an "Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company
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exhausts its remedies pursuant to Section 8.3, and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
8.3. Underpayments. The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that, if successful, would
result in the assessment or collection of any Underpayment with respect to the
Executive. Such notification shall be given as soon as practicable but no later
than ten business days after the Executive is informed in writing of such claim
and shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid; provided, however, that a failure by the
Executive to give notice timely shall not relieve the Company of its obligations
hereunder except to the extent it shall have been materially prejudiced. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(a) give the Company any information reasonably requested by the
Company relating to such claim,
(b) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
the counsel to the Company or any other law firm selected by the Company,
(c) cooperate with the Company in good faith in order
effectively to contest such claim, and
(d) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.
8.4. Refunds. If, after the receipt by the Executive of any amount
paid or advanced by the Company in connection with a contest undertaken pursuant
to Section 8.3, the Executive becomes entitled to receive any refund or credit
with respect thereto, the Executive shall (subject to the Company's complying
with the requirements of Section 8.3) promptly pay to the Company the amount of
such refund or credit (together with any interest paid or credited thereon after
taxes applicable thereto).
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9. Options. The Company shall grant to the Executive, pursuant to the
Company's 1990 Stock Option Plan (the "Plan"), a stock option to purchase
300,000 shares of common stock, $0.01 par value of the Company (the "Common
Stock"), at $16 per share, purchasable as set forth in and subject to the terms
and conditions of the Plan and an agreement to be entered into between the
Company and the Executive (the "Option"). The Option will vest in full (i) upon
the first anniversary (the "Vesting Date") of the Company's consummation of a
Transaction (as defined above) or, if the Transaction involves an interim
financing and a Subsequent Transaction (as defined above), on the consummation
of the Subsequent Transaction or the termination of the agreement providing for
the Subsequent Transaction, provided that at all times immediately prior to the
Vesting Date, the Optionee has been an employee of the Company, or its successor
in interest under a Transaction; (ii) if the Optionee's employment has been
terminated by him for Good Reason, or by the Company other than for Cause; or
(iii) if the Optionee's employment has been terminated by reason of death or
Disability.
10. Notices. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon delivery personally, by
facsimile or by overnight mail, or upon deposit in the United States Post
Office, by registered or certified mail, postage prepaid, addressed to the other
party such address or addresses as either party shall designate to the other in
accordance with this Section 10.
11. Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns and pronouns shall include the plural,
and vice versa.
12. Entire Agreement. This Agreement and the exhibits hereto and the
Registration Rights Agreement constitute the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written
or oral, relating to the subject matter of this Agreement.
13. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.
14. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Maryland.
15. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Executive are personal and shall not be assigned by him.
16. Arbitration. The parties agree that any controversy, claim, or
dispute arising out of or relating to this Agreement, or the breach thereof, or
arising out of or relating to the employment of the Executive, or the
termination thereof, including any claims under federal, state, or local law,
shall be resolved by arbitration in Bethesda, Maryland, in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association. The
parties
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agree that any award rendered by the arbitrator shall be final and binding, and
that judgment upon the award may be entered in any court having jurisdiction
thereof.
17. Miscellaneous.
17.1 No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.
17.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
17.3 In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.
17.4 This Agreement is effective as of the date of execution of this
Agreement, will survive the Executive's employment with the Company, and does
not in any way restrict Executive's right or the right of the Company to
terminate Executive's employment.
17.5 Executive certifies and acknowledges that he has carefully read
all of the provisions of this Agreement and that he understands and will fully
and faithfully comply with its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
OMNIPOINT CORPORATION
By:
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Print Name:
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Title:
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EXECUTIVE
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Xxxxxxx X. Xxxxx
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EXECUTION COPY
TERM SHEET
SALES OF SHARES
REGISTRATION RIGHTS: Registration rights similar to those of Madison
Dearborn, as follows:
DEMAND RIGHTS: (A) The Executive may request that the Company file a
Registration Statement (on Form S-1 or Form S-2) covering shares with an
anticipated aggregate offering price of at least $2,500,000. Upon such
request, the Company will use its best efforts to cause such shares to be
registered. (B) The Executive may request the Company file a Registration
Statement on a continuous basis such that the Executive's shares may be
pledged as collateral.
The Company will not be obligated to effect more than two registrations
(other than on Form S-3) under paragraph (A) and one such registration
under paragraph (B).
REGISTRATION ON FORM S-3: The Executive will have the right to require
the Company to file an unlimited number of Registration Statements on Form
S-3 (or any equivalent successor form), including on a continuous basis (it
being agreed that the Madison Dearborn registration rights agreement will
be modified to permit demand registrations on a continuous basis), provided
the anticipated aggregate offering price in each registration on Form S-3
will exceed $500,000.
PIGGY-BACK REGISTRATION: The Executive will be entitled to
"piggy-back" registration rights on registration of the Company, subject to
the right of the Company and its underwriters, in view of market
conditions, to reduce the number of shares of such holders proposed to be
registered. Any such reduction shall be applied so that (i) an equal number
of shares may be registered by the Executive and Madison Dearborn and (ii)
all holders of stock entitled to include shares in the registration shall
participate pro rata based on the number of shares each holder is entitled
to include in such underwriting. If any such holder would be entitled to
more shares than requested to be registered, the excess would be allocated
pro rata on the same basis.
EXAMPLE: Assume stock ownership by piggy-back registration rights
holders as follows: Executive 7,500,000 shares, Madison Dearborn 6,190,000
shares and Xxxxx & Co. 3,836,000 shares. If the underwriter limits
piggy-back registration to 5 million shares, Executive would be entitled to
register 2,139,679 shares [5 million (7,500,000/17,526,000)], Madison
Dearborn would be entitled to register 1,765,949 shares [5 million
(6,190,000/17,526,000)] and Xxxxx & Co. would be entitled to register
1,094,372 shares [5 million (3,386,000/17,526,000].
REGISTRATION EXPENSES: The registration expenses (exclusive of
underwriting discounts and commissions) of all of the registrations will be
borne by the Company, except that the Company will pay only one half of the
expenses for the registration of shares on a continuous basis for purposes
of a pledge of such shares.
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TRANSFER OF REGISTRATION RIGHTS: The Executive's registration rights
may be transferred to a transferee who acquires at least 20% of the
Executive's shares.
OTHER REGISTRATION PROVISION: Other provisions in the Madison Dearborn
Amended and Restated Registration Rights Agreement will apply with respect
to registration rights, including cross-indemnification, the Company's
ability to delay the filing of a demand registration for a period of not
more than six months in certain circumstances, the agreement by the
Executive (if requested by the underwriters in a public offering) not to
sell any unregistered shares for a period of 180 days following the
effective date of the registration statement of such offering, the period
of time in which the registration statement will be kept effective,
underwriting arrangements and the like.
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