EXHIBIT 10.16
PAGING NETWORK DO BRASIL S.A.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of this 11th day of December, 1996,
between PAGING NETWORK DO BRASIL S.A. a Brazilian corporation (the "Company"),
and Xxxxxx Xxxxxx (the "Executive").
R E C I T A L S:
WHEREAS, the Company recognizes that the future growth, profitability
and success of the Company's business will be substantially and materially
enhanced by the employment of the Executive by the Company; and
WHEREAS, the Company desires to employ the Executive and the Executive
has indicated his willingness to provide his services, on the terms and
conditions set forth herein.
NOW, THEREFORE, on the basis of the foregoing premises and in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
Section 1. Employment. The Company hereby agrees to employ the
Executive and the Executive hereby accepts employment with the Company, on the
terms and subject to the conditions hereinafter set forth. Subject to the terms
and conditions contained herein, the Executive shall serve as the President and
Chief Executive Officer of the Company and, in such capacity, shall report
directly to the Board of Directors of the Company (the "Board of Directors") and
shall have such duties as are typically performed by a President and Chief
Executive Officer of the Company, subject to the direction of the Board of
Directors and to the provisions of the Company's by-laws. The Company shall also
take all reasonable actions to have the Executive elected as a Director of the
Company for so long as he serves as the President and Chief Executive Officer of
the Company. The principal location of the Executive's employment shall be at
the Company's principal executive office located in Sao Paulo, Brazil, although
the Executive understands and agrees that he may be required to travel from time
to time for business reasons.
Section 2. Term. Subject to the provisions and conditions of this
Agreement (including Section 6), the Executive's employment hereunder shall
commence on the date hereof and shall continue during the period ending on the
second anniversary of the date hereof (the "Initial Term"). Thereafter,
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the Employment Term shall be extended automatically for one additional period of
two years unless either party shall provide notice of termination not less than
three (3) months prior to expiration of the Employment Term. The Initial Term,
together with any extension pursuant to this Section 2, is referred to herein as
the "Employment Term."
Section 3. Compensation.
(a) Salary and Bonus. The Executive's base salary (as adjusted pursuant
to the terms hereof, the "Salary") will be U.S. $126,925 per year, payable in
accordance with the payroll practices of the Company in effect from time to
time, but in no event shall the Salary be paid less frequently than monthly.
Consistent with Brazilian employment practices, the Executive shall be paid an
additional one month's salary at the year end, thereby increasing the
Executive's effective annual salary to $137,500. The Salary may be increased
from time to time by the Board of Directors. The Salary will be denominated in
the local currency of Brazil. At the discretion of the Board of Directors, the
Executive may be eligible for an annual bonus (the "Bonus"), which may be up to
fifty percent (50%) of the Executive's effective annual salary.
(b) Restricted Stock. The Executive has been granted four hundred
thirty-two (432) shares of the Common Stock of the Company, with no par value
(the "Common Stock"), representing one percent (1%) of all outstanding shares of
Common Stock on the date hereof, subject to the terms of a Subscription
Agreement between the Company and the Executive (the "Restricted Stock"). The
Company shall consider in the future granting the Executive additional shares of
Common Stock, or options to purchase such Common Stock, on terms similar to the
grant of the Restricted Stock.
(c) Benefits. In addition to the Salary, the Bonus and the Restricted
Stock, the Executive shall be entitled to participate in health, insurance and
pension benefits provided to other senior executives of the Company on terms no
less favorable than those available to such senior executives of the Company.
The Executive shall also be entitled to the same number of vacation days,
holidays, sick days and other benefits as are generally allowed to other senior
executives of the Company in accordance with the Company policy in effect from
time to time and in accordance with Brazilian applicable laws and regulations.
(d) Foreign Service Incentive. In addition to the Salary and the Bonus,
the Executive shall receive an additional payment as a foreign service incentive
(the "Foreign Service Incentive") equal to ten percent (10%) of the Executive's
Salary then in
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effect. The Foreign Service Incentive will be denominated in U.S. dollars and
shall be paid at such time as the Salary is paid.
(e) Goods and Services Allowance. In order to compensate the Executive
for the higher costs of goods and services in Brazil as compared to the United
States, the Executive will receive an allowance for the purchase of goods and
services (the "Allowance"). The differential will be based on tables prepared by
Organization Resources Counselors, Inc. ("ORC"), which are calculated by
multiplying a goods and services index by the amount that a person at the
Executive's income level and family size would spend on goods and services in
the United States. In the event ORC no longer prepares such tables, the
Allowance will be determined by the Board of Directors based on data reasonably
comparable to the data used by ORC to prepare its tables. At present, the ORC
goods and services differential for an American at the Executive's salary level
and family status assigned to Brazil is U.S. $28,212 per year. The Allowance may
be adjusted by the Board of Directors quarterly or more frequently if economic
conditions reasonably dictate. Payment of the Allowance shall commence when the
Executive moves into permanent quarters in Brazil. The Allowance will be
denominated in U.S. dollars and shall be paid at such time as the Salary is
paid.
(f) Foreign Housing Allowance. The Company shall pay the Executive's
actual cost of rental housing and rental furniture in Brazil up to a limit of
the Brazilian reais equivalent at the then prevailing exchange rate of
U.S.$6,000.00 per month, plus approved utilities (gas, electricity, phone line
rental, water and property fees/taxes) (the "Housing Allowance"). The maximum
permitted Housing Allowance shall be adjusted from time to time by the Board of
Directors, if necessary, based on prevailing economic conditions. In
consideration of the Housing Allowance, the Salary shall be reduced by an amount
equal to the housing and utility expenses normally paid by a person living in
the United States with the Executive's Salary and family size, based on data
provided by ORC. At the Executive's initial Salary, the Salary would be reduced
by the Brazilian reais equivalent at the then prevailing exchange rate of U.S.
$18,696.00 per annum. This amount shall be adjusted, if necessary, by the Board
of Directors from time to time based on data provided by ORC or, in the event
such data from ORC is not available, on reasonably comparable data as determined
by the Board of Directors.
(g) Tax Equalization Policy. As long as the Executive is a resident of
Brazil, a hypothetical tax will be deducted from the Salary. The hypothetical
tax at the Executive's Salary initially will be the Brazilian reais equivalent
at the then prevailing exchange rate of U.S. $32,445.00 or the Brazilian reais
equivalent at the then prevailing exchange rate of U.S. $2,704.00 per month, and
will be adjusted from time to time based on
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prevailing tax rates. The hypothetical tax will be deducted on the Bonus at the
time of payment initially at the rate of 36%, subject to adjustment from time to
time based on prevailing tax rates. For so long as the Executive is being
compensated pursuant to this Agreement, the accounting firm of Ernst & Young or
such other firm of independent accountants as shall be reasonably acceptable to
the Executive and the Company (the "Accountants") will prepare and assist the
Executive in filing his foreign and United States federal, state and local
income tax returns (the "Tax Return") and will provide the Company with a
statement of the Executive's liability for taxes (whether income, employment or
other taxes) on amounts paid to him or income received by him, in connection
with his employment by the Company (including all amounts described in Section
3) which will then be paid by the Company on a timely basis. Upon completion of
such returns, a tax equalization statement will be prepared by the Accountants
to compute the Executive's stay-at-home tax. The stay-at-home tax is equivalent
to the federal, state and local employment taxes that would have been incurred
on Salary, Bonus, Restricted Stock and Benefits (exclusive of payments made
pursuant to Section 3(d), (e), (f), (h) and (j) and any other expatriate-related
premiums, allowances, foreign income tax exclusions, moving, relocation, etc.).
If the stay-at-home tax is less than the hypothetical tax withheld, the
difference will be reimbursed to the Executive by the Company. Conversely, if
the stay-at-home tax exceeds the hypothetical tax withheld, the Executive will
be required to reimburse the difference to the Company. The fees and expenses of
the Accountants shall be borne by the Company. In order to accomplish the
purposes of this section, all payments by the Company will be grossed-up for any
tax liability resulting from those payments. In addition to the foregoing, the
Accountants will also prepare and assist the Executive in connection with any
audits of and amendments to the Tax Returns. The Company will pay any additional
amounts owed as a result of any amendments to the Tax Returns. If necessary, an
appropriate adjustment shall be made to the Executive's stay-at-home tax for the
period covered by any amended Tax Return. If such adjustment increases the
Executive's stay-at-home equal to such adjustment; conversely, if such
adjustment decreases the Executive's stay-at-home tax, then the Company shall
reimburse the Executive an amount equal to such adjustment.
(h) Automobile. The Company will provide the Executive with use of an
automobile in Brazil. The type of the automobile shall be comparable to
automobiles provided to executives of comparable rank to comparable Brazilian
companies, provided that the cost of such an automobile is reasonable as
determined by the Board of Directors. The Company shall provide for office
parking of the automobile, if available, or shall reimburse the Executive for
his reasonable office parking expenses. Required costs for maintenance,
insurance, and fees for the automobile shall be paid
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by the Company. The Executive will be responsible for normal operating expenses,
including fuel and oil for personal use of the automobile.
(i) Method of Payment. The Executive's total compensation may be paid
partially in Brazilian currency and partially in U.S. dollars deposited to the
Executive's U.S. checking account, as requested from time to time by the
Executive. Except as may be otherwise agreed or specified hereunder, all amounts
paid hereunder shall be paid in Brazilian reais at the prevailing exchange rate.
(j) Relocation Expenses. The Company will pay the following relocation
expenses incurred by the Executive:
(A) A one-time relocation allowance of the Brazilian reais equivalent
at the then prevailing exchange rate of U.S. $10,000.00, net of taxes, shall be
paid to the Executive upon the transfer to Brazil. This allowance is designed to
aid in the payment of expenses related to the furnishing of the Executive's
living quarters.
(B) Health status assessments for the Executive and his spouse.
Additionally, any necessary vaccinations and inoculations prior to departing
from the U.S. will be provided at the Company's expense.
(C) Expenses for obtaining the necessary passport, work permit and
visa.
(D) The Company shall pay all reasonable moving-related expenses
incurred by the Executive in connection with his relocation to Brazil.
(E) Upon the termination of the Executive's employment hereunder, the
Company shall pay all reasonable moving-related expenses incurred by the
Executive in connection with his repatriation to the United States and, if
necessary, shall reimburse the Executive for any costs incurred by him in
connection with an early termination of the lease relating to the Executive's
primary residence and furniture in Brazil, provided, however, that the Company
shall not be required to pay such expenses or costs if the Executive is
terminated for Just Cause.
(k) Personal Travel Expenses to U.S. The Company will reimburse the
Executive for travel expenses incurred by the Executive in connection with
personal travel to the United States, provided that the Board of Directors shall
have determined that such travel expenses are reasonable.
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Section 4. Exclusivity. During the Employment Term, the Executive shall
devote his full time to the business of the Company, shall faithfully serve the
Company, shall in all respects conform to and comply with the lawful and
reasonable directions and instructions given to him by the Board of Directors in
accordance with the terms of this Agreement, shall use his best efforts to
promote and serve the interests of the Company and shall not engage in any other
business activity, whether or not such activity shall be engaged in for
pecuniary profit, except that the Executive may (i) participate in the
activities of professional trade organizations related to the business of the
Company and (ii) engage in personal investing activities, provided that
activities set forth in these clauses (i) and (ii), either singly or in the
aggregate, do not interfere in any material respect with the services to be
provided by the Executive hereunder.
Section 5. Reimbursement for Expenses. The Executive is authorized to
incur reasonable expenses in the discharge of the services to be performed
hereunder, including expenses for travel, entertainment, lodging and similar
items in accordance with the Company's expense reimbursement policy, as the same
may be modified by the Board of Directors from time to time. The Company shall
reimburse the Executive for all such proper expenses upon presentation by the
Executive of itemized accounts of such expenditures in accordance with the
financial policy of the Company, as in effect from time to time.
Section 6. Termination and Default.
(a) Death. This Agreement shall automatically terminate upon the death
of the Executive and upon such event, the Executive's estate shall be entitled
to receive the amounts specified in Section 6(f) below.
(b) Disability. If the Executive is unable to perform the duties
required of him under this Agreement because of illness, incapacity, or physical
or mental disability, this Agreement shall remain in full force and effect and
the Company shall pay all compensation required to be paid to the Executive
hereunder, unless the Executive is unable to perform the duties required of him
under this Agreement for an aggregate of 120 days (whether or not consecutive)
during any 12-month period during the term of this Agreement, in which event
this Agreement (other than Sections 6(f), 7, 8, 9, and 12 hereof), including,
but not limited to, the Company's obligations to pay any Salary or to provide
any privileges under this Agreement, shall terminate.
(c) Just Cause. The Company may terminate this Agreement (other than
Sections 6(f), 7, 8, 9 and 12 hereof) at any time. If the Executive's employment
is terminated pursuant to this Section
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6(c), the Executive shall be entitled to receive the amounts specified in
Section 6(f) below. In the event of termination pursuant to this Section (c) for
Just Cause, the Company shall deliver to the Executive written notice setting
forth the basis for such termination, which notice shall specifically set forth
the nature of the Just Cause which is the reason for such termination.
Termination of the Executive's employment hereunder shall be effective upon
delivery of such notice of termination. For purposes of this Agreement, "Just
Cause" shall mean: (i) the Executive's failure (except where due to a disability
contemplated by subsection (b) hereof), neglect or refusal to perform his duties
hereunder which failure, neglect or refusal shall not have been corrected by the
Executive within 30 days of receipt by the Executive of written notice from the
Company of such failure, neglect or refusal, which notice shall specifically set
forth the nature of said failure, neglect or refusal, (ii) any act of the
Executive that has the intended effect of injuring the reputation or business of
the Company or its affiliates in any material respect; (iii) any continued or
repeated absence from the Company, unless such absence is (A) approved or
excused by the Board of Directors or (B) is the result of the Executive's
illness, disability or incapacity (in which event the provisions of Section 6(b)
hereof shall control); (iv) use of illegal drugs by the Executive or repeated
drunkenness; (v) conviction of the Executive for the commission of a felony;
(vi) the commission by the Executive of an act of fraud or embezzlement against
the Company; or (vii) any other act or condition provided as such under
applicable Brazilian laws and regulations.
(d) Good Reason. The Executive may terminate this Agreement (other than
Sections 6(f), 7, 8, 9 and 12) for "Good Reason" if he resigns from his
employment hereunder following a Substantial Breach (as hereinafter defined) and
such Substantial Breach shall not have been corrected by the Company within
thirty (30) days of receipt by the Company of written notice from the Executive
of the occurrence of such Substantial Breach, which notice shall specifically
set forth the nature of the Substantial Breach which is the reason for such
resignation. The term "Substantial Breach", means (i) the failure by the Company
to pay to the Executive any amounts due or provide the use of the automobile in
accordance with Section 3 hereof; (ii) the failure by the Company to allow the
Executive to participate in the Company's employee benefit plans generally
available from time to time to senior executives of the Company; (iii) the
failure of any successor to all or substantially all of the business and/or
assets of the Company to assume this Agreement; (iv) the diminishing of the
Executive's position in the Company; (v) assigning the Executive duties that are
inconsistent with his position; or (vi) a material breach by the Company of the
terms of this Agreement; provided, however, that the term "Substantial Breach"
shall not include a termination of the Executive's employment hereunder
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pursuant to Sections 6(b) or (c) hereof. The date of termination of the
Executive's employment under this Section 6(d) shall be the effective date of
any resignation specified in writing by the Executive, which shall not be less
than thirty days after receipt by the Company of written notice of such
resignation, provided that such resignation shall not be effective pursuant to
this Section 6(d) if such Substantial Breach is corrected by the Company during
the 30-day period following notice thereof as provided in the first sentence of
this Section 6(d).
(e) Resignation. The Executive shall have the right immediately to
terminate this Agreement (other than Sections 6(f), 7, 8, 9 and 12) by giving
notice of the Executive's resignation other than for Good Reason. Upon receipt
of such notice, this Agreement, other than Sections 6(f), 7, 8, 9 and 12, shall
terminate immediately.
(f) Payments. In the event that the Executive's employment hereunder
terminates for any reason, the Company shall pay to the Executive all amounts
accrued but unpaid hereunder through the date of termination in respect of
Salary or unreimbursed expenses. In the event the Executive's employment
hereunder is terminated by the Company without Just Cause or by the Executive
with Good Reason, in addition to the amounts specified in the foregoing
sentence, the Executive shall continue to receive (i) all compensation provided
for in Section 3 hereof (exclusive of Bonus) for a period of forty five (45)
days following the date of such termination and (ii) thereafter only Salary and
health benefits (less any applicable withholding or similar taxes) at the rate
in effect hereunder on the date of such termination periodically, in accordance
with the Company's prevailing payroll practices, for ten and one-half (10-1/2)
months (the twelve month period following the date of termination is herein
referred to as the "Severance Term"). In the event the Executive accepts other
employment or engages in his own business prior to the last date of the
Employment Term, the Executive shall forthwith notify the Company and the
Company shall be entitled to set off from amounts due to the Executive under
this Section 6(f) the amounts paid to the Executive in respect of such other
employment or business activity. Amounts owed by the Company in respect of the
Salary or reimbursement for expenses under the provisions of Section 5 hereof
shall, except as otherwise set forth in this Section 6(f), be paid promptly upon
any termination. Upon any termination of this Agreement, all of the rights,
privileges and duties of the Executive hereunder shall cease, except for his
rights under this Section 6(f) and his obligations under Sections 7, 8, 9, and
12 hereunder.
Section 7. Secrecy and Non-Competition.
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(a) No Competing Employment. The Executive acknowledges that the
agreements and covenants contained in this Section 7 are essential to protect
the value of the Company's business and assets and by his current employment
with the Company and its subsidiaries, the Executive has obtained and will
obtain such knowledge, contacts, know-how, training and experience and there is
a substantial probability that such knowledge, know-how, contacts, training and
experience could be used to the substantial advantage of a competitor of the
Company and to the Company's substantial detriment. Therefore, the Executive
agrees that for the period commencing on the date of this Agreement and ending
eighteen (18) months after the termination of the Executive's employment
hereunder (such period is hereinafter referred to as the "Restricted Period")
the Executive shall not participate or engage, directly or indirectly, for
himself or on behalf of or in conjunction with any person, partnership,
corporation or other entity, whether as an employee, agent, officer, director,
shareholder, partner, joint venturer, investor or otherwise, in the provision of
facilities-based one-way or two-way paging or wireless messaging services
(including without limitation a service that provides substantially the same
service as VoiceNowSYMBOL 210 \f "Symbol" \s 12 and other advanced paging
services). Notwithstanding the foregoing, nothing herein shall prohibit the
Executive from owning up to 5% of any publicly traded entity.
(b) Nondisclosure of Confidential Information. The Executive, except in
connection with his employment hereunder, shall not disclose to any person or
entity or use, either during the Employment Term or at any time thereafter, any
information not in the public domain or generally known in the industry, in any
form, acquired by the Executive while employed by the Company or any predecessor
to the Company's business or, if acquired following the Employment Term, such
information which, to the Executive's knowledge, has been acquired, directly or
indirectly, from any person or entity owing a duty of confidentiality to the
Company or any of its subsidiaries or affiliates, relating to the Company, its
subsidiaries or affiliates, including but not limited to information regarding
customers, vendors, suppliers, trade secrets, training programs, manuals or
materials, technical information, contracts, systems, procedures, mailing lists,
know-how, trade names, improvements, price lists, financial or other data
(including the revenues, costs or profits associated with any of the Company's
products or services), business plans, code books, invoices and other financial
statements, computer programs, software systems, databases, discs and printouts,
plans (business, technical or otherwise), customer and industry lists,
correspondence, internal reports, personnel files, sales and advertising
material, telephone numbers, names, addresses or any other compilation of
information, written or unwritten, which is or was used in the business of the
Company or any subsidiaries or
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affiliates thereof. The Executive agrees and acknowledges that all of such
information, in any form, and copies and extracts thereof, are and shall remain
the sole and exclusive property of the Company, and upon termination of his
employment with the Company, the Executive shall return to the Company the
originals and all copies of any such information provided to or acquired by the
Executive in connection with the performance of his duties for the Company, and
shall return to the Company all files, correspondence and/or other
communications received, maintained and/or originated by the Executive during
the course of his employment, to the extent such materials are related to his
employment.
(c) No Interference. During the Restricted Period, the Executive shall
not, whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization (other than the
Company), directly or indirectly solicit, endeavor to entice away from the
Company, its affiliates or subsidiaries, or otherwise directly interfere with
the relationship of the Company, its affiliates or subsidiaries with any person
who, to the knowledge of the Executive, is employed by or otherwise engaged to
perform services for the Company, its affiliates or subsidiaries (including, but
not limited to, any independent sales representatives or organizations) or who
is, or was within the then most recent twelve-month period, a customer or
client, of the Company, its predecessors or any of its subsidiaries or
affiliates. The placement of any general classified or "help wanted"
advertisements and/or general solicitations to the public at large shall not
constitute a violation of this Section 7(c) unless the Executive's name is
contained in such advertisements or solicitations.
(d) Inventions, etc. The Executive hereby sells, transfers and assigns
to the Company or to any person or entity designated by the Company all of the
entire right, title and interest of the Executive in and to all inventions,
ideas, disclosures and improvements, whether patented or unpatented, and
copyrightable material, made or conceived by the Executive, solely or jointly,
during his employment by the Company which relate to methods, apparatus,
designs, products, processes or devices, sold, leased, used or under
consideration or development by the Company, or which otherwise relate to or
pertain to the business, functions or operations of the Company or which arise
from the efforts of the Executive during the course of his employment for the
Company. The Executive shall communicate promptly and disclose to the Company,
in such form as the Company requests, all information, details and data
pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and the Executive shall execute and deliver to the Company such
formal transfers and assignments and such other papers and documents as
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may be necessary or required of the Executive to permit the Company or any
person or entity designated by the Company to file and prosecute the patent
applications and, as to copyrightable material, to obtain copyright thereof. Any
invention relating to the business of the Company and disclosed by the Executive
within one year following the termination of his or her employment with the
Company shall be deemed to fall within the provisions of this paragraph unless
proved to have been first conceived and made following such termination.
Section 8. Relief. Without intending to limit the remedies available to
the Company, the Executive acknowledges that a breach of any of the covenants
contained in Section 7 hereof may result in material irreparable injury to the
Company or its subsidiaries or affiliates, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, a reasonable estimation of such damages is U.S.
$250,000; thus, if the Executive breaches any of the provisions of Section 7,
the Executive shall pay to the Company liquidated damages of U.S. $250,000,
provided that prior to being liable for such amount he shall have received
written notice of such violation from the Company describing in reasonable
detail the activities alleged to constitute the violation and stating that those
activities constitute a violation for which relief may be sought under this
Section 8, and the Executive shall have failed to cure such violation within
fifteen (15) days from such notice.
Section 9. Extension of Restricted Period. In addition to the remedies
the Company may seek and obtain pursuant to Section 8 of this Agreement, the
Restricted Period shall be extended by any and all periods during which the
Executive shall be found by a court to have been in violation of the covenants
contained in Section 7 hereof.
Section 10. Successors and Assigns; No Third-Party Beneficiaries. This
Agreement shall inure to the benefit of, and be binding upon, the successors and
assigns of each of the parties, including, but not limited to, the Executive's
heirs and the personal representatives of the Executive's estate; provided,
however, that neither party shall assign or delegate any of the obligations
created under this Agreement without the prior written consent of the other
party. Notwithstanding the foregoing, the Company shall have the unrestricted
right to assign this Agreement and to delegate all or any part of its
obligations hereunder to any of its subsidiaries or affiliates that succeeds to
the Company's business, but in such event such assignee shall expressly assume
all obligations of the Company hereunder and the Company shall remain fully
liable for the performance of all of such obligations in the manner prescribed
in this Agreement. Nothing in this Agreement shall confer upon
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any person or entity not a party to this Agreement, or the legal representatives
of such person or entity, any rights or remedies of any nature or kind
whatsoever under or by reason of this Agreement.
Section 11. Tag-Along Rights with Warburg.
(a) In the event that Warburg, Xxxxxx Ventures, L.P. ("Warburg")
intends to sell, assign, pledge, hypothecate, or otherwise dispose or encumber
("Transfer") a majority of the shares of Common Stock owned by it, Warburg shall
notify the Executive, in writing, of such proposed Transfer and its terms and
conditions. Within ten (10) business days of the date of such notice, the
Executive shall notify Warburg if he elects to participate in such Transfer.
Subject to the proviso below, if the Executive so notifies Warburg, (i) the
Company's right to repurchase any shares of Common Stock pursuant to the
Subscription Agreement shall expire immediately and (ii) the Executive shall
have the right to Transfer, at the same price and on the same terms and
conditions as Warburg, any or all of his shares of Common Stock that are not
subject to forfeiture (pursuant to the Subscription Agreement between the
Company and the Executive); provided, however, that if the purchaser of such
shares so requires, the Executive will enter into an employment agreement on
terms substantially similar to this Agreement (exclusive of any tag-along
rights) and reasonably acceptable to the purchaser.
(b) Notwithstanding anything contained in this Section 11, in the event
that all or a portion of the purchase price consists of securities and the sale
of such securities to the Executive would require either a registration under
(i) the United States Securities Act of 1933, as amended, or the preparation of
a disclosure document pursuant to Regulation D under such act (or any successor
regulation) or a similar provision of any state securities law; or (ii)
Brazilian laws and regulations or regulation of any other jurisdiction, then, at
the option of Warburg, the Executive may receive, in lieu of such securities,
the fair market value of such securities in cash, as determined in good faith by
Warburg.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of this Section 11 shall survive for a term equal to the term of that
certain Shareholders Agreement, dated December 11, 1996, among the Company,
Warburg, Paging Network International N.V., the Executive and certain other
shareholders of the Company.
Section 12. Waiver and Amendments. Any waiver, alteration, amendment or
modification of any of the terms of this Agreement shall be valid only if made
in writing and signed by the parties
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hereto; provided, however, that any such waiver, alteration, amendment or
modification is consented to on the Company's behalf by the Board of Directors.
No waiver by either of the parties hereto of their rights hereunder shall be
deemed to constitute a waiver with respect to any subsequent occurrences or
transactions hereunder unless such waiver specifically states that it is to be
construed as a continuing waiver.
Section 13. Severability and Governing Law. The Executive acknowledges
and agrees that the covenants set forth in Section 7 hereof are reasonable and
valid in geographical and temporal scope and in all other respects. If any of
such covenants or such other provisions of this Agreement are found to be
invalid or unenforceable by a final determination of a court of competent
jurisdiction (a) the remaining terms and provisions hereof shall be unimpaired
and (b) the invalid or unenforceable term or provision shall be deemed replaced
by a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
BRAZIL.
Section 14. Notices.
(i) All communications under this Agreement shall be in writing and
shall be delivered by hand, internationally recognized air courier or facsimile
transmission, charges prepaid:
(1) if to the Executive, at R. Amauri,513 - Apt. 906, Jardim Paulista,
CEP 01448-000, Sao Paulo, Brazil (with a copy to Battle Xxxxxx, 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number (000) 000-0000, Attn: Xxxx
Xxxxxxxx), or at such other address as the Executive may have furnished in
writing to the Company,
(2) if to the Company, at Xxxxxxx xxx Xxxxxx Xxxxxx, 00,000 World Trade
Center, 17th Floor, Suite 26, Sao Paulo, Brazil, facsimile number
011-55-11-521-1814, marked for the attention of the President, (with a copy to
Xavier, Bernardes, Braganca, Xx. Xxxxxx 0000, Xxx Xxxxx, Xxxxxx, facsimile
number 011-55-11-282-5580, Attn: M. Xxxxxx Xxxxx), or at such other address as
it may have furnished in writing to the Executive, with copies to:
(a) Warburg, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
facsimile number (000) 000-0000 marked for attention Xxxxxxx X. Xxxx (with a
copy to Xxxxxxx Xxxx & Xxxxxxxxx, One Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, facsimile number (000) 000-0000, Attn: Xxxxxx X.
Xxxxxxx),
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or at such other address as Warburg may have furnished in writing to the
Company, and
(b) PageNet, at 0000 Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx, Xxxxx 00000,
facsimile number (000) 000-0000, marked for attention of Xxxxx X. Xxxxxxxx (with
a copy to Xxxxxxx, Xxxx & Xxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000-0000, facsimile number (000) 000-0000 Att: Xxxxx X. Xxxxxxx), or at such
other address as PageNet may have furnished in writing to the Company.
(ii) Any notice so addressed shall be deemed to be given: if delivered
by hand, on the date of such delivery; if mailed by courier, on the first
business day following the date of such mailing; and if mailed by registered or
certified mail, on the third business day after the date of such mailing.
Section 15. Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof, affect the meaning or interpretation of
this Agreement or of any term or provision hereof.
Section 16. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto regarding the employment of
the Executive. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Agreement.
Section 17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PAGING NETWORK DO BRASIL S.A.
By: /s/ Xxxxx Xxxxxxxx
Title: Vice President
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxx
Section 11 is
Accepted and Agreed to:
WARBURG, XXXXXX VENTURES, L.P.
By: WARBURG, XXXXXX & CO.,
General Partner
By: /s/ Xxxxxxx X. Xxxx
Title: Partner
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