EMPLOYMENT AGREEMENT
AGREEMENT dated as of May 24, 1999 between Prime Cellular, Inc., a Delaware
corporation (the "Employer" or the "Company"), and Xxxxxx X. Xxxxxx (the
"Executive").
W I T N E S S E T H :
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WHEREAS, the Employer desires to employ the Executive as President of the
Company, and to be assured of his services as such on the terms and conditions
hereinafter set forth; and
WHEREAS, the Executive is willing to accept such employment on such terms
and conditions;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and intending to be legally bound hereby, the Employer
and the Executive hereby agree as follows:
1. Term. The Employer hereby agrees to employ the Executive, and the
Executive hereby agrees to serve the Employer as herein provided, commencing
effective as of the date of this Agreement (the "Effective Date") for a term of
one (1) year thereafter (such period being herein referred to as the "Initial
Term," and any year commencing on the Effective Date or any anniversary of the
Effective Date being hereinafter referred to as an "Employment Year"), unless
further extended or sooner terminated as hereinafter provided. After the Initial
Term and on the last day of any Employment Year thereafter, this Agreement shall
be automatically renewed for successive one year periods (each such period being
referred to as a "Renewal Term"), unless, more than ninety (90) days prior to
the expiration of the Initial Term or any Renewal Term, either the Executive or
the Company gives written notice that employment will not be renewed ("Notice of
Non-Renewal").
2. Executive Duties.
(a) During the term of this Agreement, the Executive shall have the
duties and responsibilities of the President of the Company, reporting to the
Board of Directors of the Employer (the "Board"). It is understood that such
duties and responsibilities shall be reasonably related to the Executive's
position. It is acknowledged and agreed that the Executive is not required to
devote all or substantially all of his time to the performance of his duties
hereunder, it being further acknowledged and agreed that the Executive shall
devote only such time as, in his sole discretion, is necessary to perform such
services. It is further agreed that the Executive's services hereunder will be
performed at such times and at such places as shall be mutually agreeable to the
Company and the Executive.
(b) The Executive may, during the term of this Agreement, engage in such
other employment and activities as he may see fit, it being agreed that the
employment of the Executive is non-exclusive and that nothing herein contained
shall be deemed to prohibit the Executive from engaging in such other activities
as he may see fit so long as they do not unreasonably interfere with the
performance of the Executive's functions pursuant to the terms of this
Agreement. Without limiting the foregoing, the Executive may engage or invest in
any other business or venture of any nature or description, or possess any
interest therein, independently or with others. The Executive shall have no duty
or obligation to disclose or offer to the Company or obtain for the benefit of
the Company any such independent venture or interest therein; and the Company,
the creditors and stockholders of the Company, and any other person having any
interest in the Company shall not have (a) any claim, right or cause of action
of any kind against the Executive by reason of any direct or indirect investment
or other participation, whether active or passive, in any such independent
venture or interest therein, or (b) any rights in or to any such independent
venture or interest therein or the income or profits derived therefrom.
3. Compensation.
(a) During the term of this Agreement, the Employer shall pay the
Executive a base salary (the "Salary") at a rate of $85,000 per annum in respect
of each Employment Year, payable in equal installments bi-weekly, or at such
other times as may mutually be agreed upon between the Employer and the
Executive. Such Salary may be increased from time to time at the discretion of
the Board.
(b) In addition to the foregoing, the Executive shall be entitled to
such other cash bonuses as may from time to time be awarded to him by the Board
during or in respect of his employment hereunder.
4. Benefits.
During the term of this Agreement, the Executive shall have the right to
receive or participate in all benefits and plans which the Company may from time
to time institute during such period for its employees and for which the
Executive is eligible. Nothing paid to the Executive under any plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the salary or any other obligation payable to the Executive
pursuant to this Agreement.
5. Travel Expenses. All travel and other expenses incident to the rendering
of services reasonably incurred on behalf of the Company by the Executive during
the term of this Agreement shall be paid by the Employer. If any such expenses
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are paid in the first instance by the Executive, the Employer shall reimburse
him therefor on presentation of appropriate receipts for any such expenses.
6. Termination. The Executive's employment under this Agreement may be
terminated, effective as of the Date of Termination pursuant to Section 8 of
this Agreement, without any breach of this Agreement only on the following
circumstances:
6.1. Death. The Executive's employment under this Agreement shall terminate
upon his death.
6.2. Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from, or unable
to perform, his duties under this Agreement for 150 consecutive days, the
Employer may terminate the Executive's employment under this Agreement by giving
the Notice of Termination (as defined in Section 7 below) anytime after the
150th consecutive day.
6.3. Cause. The Employer may terminate the Executive's employment under
this Agreement for Cause. For purposes of this Agreement, the Employer shall
have "Cause" to terminate the Executive's employment under this Agreement upon
(a) the willful and continued failure or refusal by the Executive to
substantially perform his duties under this Agreement (other than any such
failure resulting from the Executive's incapacity due to physical or mental
illness) after demand for substantial performance is delivered by the Board, in
writing, specifically identifying the manner in which the Employer believes the
Executive has not substantially performed his duties and the Executive has been
afforded an opportunity, as soon as practicable, to perform as required, or (b)
the conviction of the Executive of a felony. For purposes of this paragraph, no
act, or failure to act, on the Executive's part shall be considered "willful"
unless done, or omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Employer.
Notwithstanding anything contained in this Agreement to the contrary, the
Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to the Executive, together with the Notice of
Termination (as defined in Section 7 below), a copy of a resolution, duly
adopted by the affirmative vote of not less than sixty percent of the entire
membership of the Board (other than the Executive) at a meeting of the Board
called and held for such purpose (after reasonable written notice to the
Executive and an opportunity for him, together with his counsel, to be heard
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before the Board), finding that in the good faith opinion of the Board, the
Executive was guilty of conduct set forth above in clause (a) or (b), and
specifying the particulars thereof in detail.
6.4. Termination by the Executive for Good Reason, or Because of Ill
Health. The Executive may terminate his employment under this Agreement (a) for
Good Reason (as hereinafter defined) or (b) if his health should become impaired
to any extent that makes the continued performance of his duties under this
Agreement hazardous to his physical or mental health or his life, provided that,
in the latter case, the Executive shall have furnished the Employer with a
written statement from a qualified doctor to such effect and provided, further,
that at the Employer's request and expense the Executive shall submit to an
examination by a doctor selected by the Employer and such doctor shall have
concurred in the conclusion of the Executive's doctor. For purposes of this
Agreement, "Good Reason" shall mean (a) any assignment to the Executive of any
duties or reporting obligations other than those contemplated by, or any
limitation of the powers of the Executive in any respect not contemplated by,
this Agreement, (b) failure by the Employer to comply with its material
obligations and agreements contained in this Agreement, or (c) failure of the
Employer to obtain the assumption of the agreement to perform this Agreement by
any successor as contemplated in Section 8(e) of this Agreement. With respect to
the matters set forth in clauses (a), (b) and (c) of this paragraph, the
Executive must give the Employer thirty (30) days prior written notice of his
intent to terminate this Agreement as a result of any breach or alleged breach
of the applicable provision and the Employer shall have the right to cure any
such breach or alleged breach within such thirty (30) day period.
7. Notice/Date of Termination.
(a) Any termination of the Executive's employment by the Employer or b
the Executive (other than termination by reason of the Executive's death) shall
be communicated by written Notice of Termination to the other party of this
Agreement. For purposes of this Agreement, a "Notice of Termination" shall mean
a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
(b) The "Date of Termination" shall mean (i) if the Executive's
employment is terminated by his death, the date of his death, (ii) if the
Executive's employment is terminated pursuant to Section 6.2 above, the date on
which the Notice of Termination is given, (iii) if the Executive's employment is
terminated pursuant to Section 6.3 above, the date specified on the Notice of
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Termination after the expiration of any cure periods, (iv) upon the expiration
of the Initial Term or Renewal Term, if a Notice of Non-Renewal is timely given,
and (v) if the Executive's employment is terminated for any other reason, the
date on which Notice of Termination is given.
8. Compensation Upon Termination or During Disability.
(a) If the Executive's employment shall be terminated by reason of his
death, the Employer shall pay to such person as he shall designate in a notice
filed with the Employer, or if no such person shall be designated, to his estate
as a lump sum benefit, his full Salary to the date of his death in addition to
any payments the Executive's spouse, beneficiaries or estate may be entitled to
receive pursuant to any pension or employee benefit plan or life insurance
policy or similar plan or policy then maintained by the Employer, and such
payments shall, assuming the Employer is in compliance with the provisions of
this Agreement, fully discharge the Employer's obligations with respect to
Section 3 of this Agreement, but all other obligations of the Employer under
this Agreement, including the obligations to indemnify, defend and hold harmless
the Executive, shall remain in effect.
(b) During any period that the Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, the
Executive shall continue to receive his Salary and other compensation until the
Executive's employment is terminated pursuant to Section 6.2 of this Agreement.
(c) If the Executive's employment shall be terminated for Cause, the
Employer shall pay the Executive his full Salary and other compensation through
the Date of Termination, at the rate in effect at the time Notice of Termination
is given, and the Employer shall, assuming the Employer is in compliance with
the provisions of this Agreement, have no further obligations with respect to
Section 3 of this Agreement, but all other obligations of the Employer under
this Agreement, including the obligations to indemnify, defend and hold harmless
the Executive, shall remain in effect.
(d) If (A) in breach of this Agreement, the Employer shall terminate the
Executive's employment other than pursuant to Sections 6.2 or 6.3 hereof (it
being understood that a purported termination pursuant to Section 6.2 or 6.3
hereof which is disputed and finally determined not to have been proper shall be
a termination by the Employer in breach of this Agreement), and/or (B) the
Executive shall terminate his employment for Good Reason, then the Employer
shall pay to the Executive:
(i) his full Salary and other compensation through the last day of the
Initial Term or Renewal Term, as the case may be, at the rate in effect at
the time Notice of Termination is given; and
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(ii) all other damages to which the Executive may be entitled as a
result of the termination of his employment under this Agreement, including
all legal fees and expenses incurred by him in contesting or disputing any
such termination or in seeking to obtain or enforce any right or benefit
provided by this Agreement.
(e) The Employer will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Employer, by agreement, in form and reasonably
substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Employer would be required to perform it if no such succession had taken place.
9. Confidentiality.
(a) The Executive shall not, during the term of this Agreement, and at
any time following termination of this Agreement, directly or indirectly,
disclose or permit to be known, to any person, firm or corporation, any
confidential or proprietary information acquired by him during the course of or
as an incident to his employment hereunder, relating to the Company or its
subsidiaries, the directors of the Company or its subsidiaries, any client of
the Company or its subsidiaries, or any corporation, partnership or other entity
owned or controlled directly or indirectly by any of the foregoing, or in which
any of the foregoing has a beneficial interest, including, but not limited to,
the business affairs of each of the foregoing. Such confidential information
shall include, but shall not be limited to, research studies, proprietary
technology, trade secrets, know-how, market studies and forecasts, competitive
analyses, pricing policies, the substance of agreements with customers and
others, marketing arrangements, customer lists and any other document or
computer programs embodying such confidential information.
(b) All information and documents relating to the Company and its
subsidiaries as hereinabove described (or other business affairs) shall be the
exclusive property of the Company, and the Executive shall use his best efforts
to prevent any publication or disclosure thereof. Upon termination of the
Executive's employment with the Company, all documents, records, reports,
writings, computer disks and other similar documents containing confidential
information, including copies thereof, then in the Executive's possession or
control shall be returned and left with the Company.
10. Indemnification. The Employer shall indemnify and hold harmless the
Executive against any and all expenses reasonably incurred by him in connection
with or arising out of (a) the defense of any action, suit or proceeding in
which he is a party, or (b) any claim asserted or threatened against him, in
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either case by reason of or relating to his being or having been an employee,
officer or director of the Company, whether or not he continues to be such an
employee, officer or director at the time of incurring such expenses, except
insofar as such indemnification is prohibited by law. Such expenses shall
include, without limitation, the fees and disbursements of attorneys, amounts of
judgments and amounts of any settlements, provided that such expenses are agreed
to in advance by the Employer. The foregoing indemnification obligation is
independent of any similar obligation provided in the Employer's Certificate of
Incorporation or Bylaws, and shall apply with respect to any matters
attributable to periods prior to the Effective Date, and to matters attributable
to his employment hereunder, without regard to when asserted.
11. General. This Agreement is further governed by the following
provisions:
(a) Notices. All notices relating to this Agreement shall be in writing
and shall be either personally delivered, sent by overnight mail, sent by
telecopy (receipt confirmed) or mailed by certified mail, return receipt
requested, to be delivered at such address as is indicated below, or at such
other address or to the attention of such other person as the recipient has
specified by prior written notice to the sending party. Notice shall be
effective upon receipt.
To the Employer:
Prime Cellular, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
To the Executive:
Xxxxxx X. Xxxxxx
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
(b) Parties in Interest. Executive may not delegate his duties or assign
his rights hereunder. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
(c) Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of the Executive by the Employer and contains all of the
covenants and agreements between the parties with respect to such employment in
any manner whatsoever. Any modification or termination of this Agreement will be
effective only if it is in writing signed by the party to be charged.
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(d) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
(e) Severability. In the event that any term or condition in this
Agreement shall for any reason be held by a court of competent jurisdiction to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other term or condition of this
Agreement, but this Agreement shall be construed as if such invalid or illegal
or unenforceable term or condition had never been contained herein.
(f) Execution in Counterparts. This Agreement may be executed by the
parties in one or more counterparts, each of which shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
PRIME CELLULAR, INC.
/s/ Xxxxxx X. Xxxxxxxx
By: ____________________________
Xxxxxx X. Xxxxxxxx,
Vice-President of Finance
/s/ Xxxxxx X. Xxxxxx
____________________________
Xxxxxx X. Xxxxxx
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