EXHIBIT 10.13
AGREEMENT OF EMPLOYMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement"), as of December 20, 1999
("Effective Date") by and among INDEPENDENT WIRELESS ONE CORPORATION, a Delaware
Corporation ("IWO"), IWO HOLDINGS, INC., a Delaware Corporation ("Holdings" and
together with IWO the "Corporation") and XXXXX XXXXXX, residing at 000 Xxxxxxx
Xxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, hereinafter called the ("Employee"),
RECITALS
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WHEREAS, the Corporation desires to induce and secure the employment of the
Employee as President and Chief Executive Officer and Employee desires to be so
employed by the Corporation,
AGREEMENTS
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1. Employment and Term. Subject to the provisions for earlier
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termination and extension as hereinafter provided in Paragraph 7 below, the
Corporation hereby employs the Employee and the Employee agrees to serve the
Corporation for a term commencing upon the Effective Date and extending until
December 31, 2002.
2. Duties of Employee.
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(a) The Employee shall serve on the Board of Directors of the
Corporation and as President and Chief Executive Officer of the Corporation, and
of any subsidiary or affiliated corporation if elected by the appropriate Board
of Directors, and shall perform such duties as are appropriate to such office as
may be assigned to him by such Board of Directors. Subject to the direction of
the Board of Directors, the Employee shall be responsible for the establishment
of the policies, plans and strategic goals of the Corporation, and shall have
primary authority and responsibility for the direction of the day to day
business of the Corporation, including, but not limited to its operating
divisions and performance of work and contracts; supervision of general,
administrative, financial, and human resources support staff; and reportee for
employee general supervision, performance appraisals and operations functions.
The Corporation agrees that the duties assigned to the Employee shall not be
inconsistent therewith and that the Employee shall have such powers, authority
and facilities at his disposal as are suitable to his position and as shall
reasonably be required to enable him to discharge his duties in an efficient
manner.
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(b) So long as this Agreement shall continue in effect, the Employee
shall devote substantially his full business time and energies to the business
and affairs of the Corporation, and to any subsidiary or affiliate of the
Corporation as directed by the Corporation, and use his best efforts, skills and
abilities to promote its interests.
3. Compensation.
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(a) Basic Salary. The Corporation shall pay the Employee from the
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Effective Date until December 31, 2000 for all services to be rendered
hereunder a basic salary at the rate of THREE HUNDRED THOUSAND DOLLARS
($300,000.00) per annum (to be paid in such regular installments as are applied
generally to salary period payments to other employees of the Corporation but in
no event less than twice monthly) before appropriate payroll deductions; and
provided that effective January 1, 2001 the basic salary shall be at the rate of
THREE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($325,000) per annum; and that
effective January 1, 2002 the basic salary shall be THREE HUNDRED FIFTY
THOUSAND DOLLARS ($350,000) per annum. Basic compensation as earned pursuant to
this subparagraph is hereinafter referred to as "Base Compensation".
(b) Cash Bonus Compensation. As an added inducement for the Employee
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to use his best efforts to enhance the business of the Corporation, the
Corporation shall pay to the Employee, as additional compensation hereunder,
annual cash bonuses in the following amounts and subject to the following terms
and conditions:
(i) for and in respect of each fiscal year (or partial fiscal
year) of the Corporation during the term of Employee's
employment by the Corporation whether or not such employment
is under this Agreement or any extension hereof, commencing
with the portion of the fiscal year beginning January 1,
2000, which succeeds the effective date hereof, amounts,
payable as provided below, equal to
(A) A Target Bonus in an amount equal to between 75% and
100% of 90% the Base Compensation described in subparagraph
(a) above, payable to Employee in the event, and only in the
event, that business plan targets (including by way of
example only, such targets as Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA"), revenue,
and/or target service levels), developed by the
Corporation's Board of Directors in consultation with
Employee and issued within forty-five (45) days after the
commencement of the relevant fiscal year of the Corporation
(or portion thereof) (these goals collectively referred to
as the "Target"), have been exceeded or met by at least 75%
and paid pro rata with respect to the relevant fiscal year
(or portion of the relevant fiscal year) of the Corporation.
It is understood and
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agreed that the amount of the Target Bonus for any year
shall be calculated at the same percentage (ranging between
75% and 100%) of 90% of Base Compensation as the percentage
of the agreed upon business plan targets which the
Corporation and Employee actually achieve in that year; and
(B) An Achievement Bonus in an amount up to 90% of the Base
Compensation defined in subparagraph (a) above, based upon
the Board of Directors' reasonable discretionary evaluation
of Employee's individual management performance, such
performance criteria to be developed in consultation with
Employee and issued within forty-five (45) days after the
commencement of each relevant fiscal year of the Company (or
portion thereof) during the term of Employee's employment.
Individual management performance criteria may include, by
way of example only, strategic goals and plans of the
Corporation as well as a reward for exceeding the goals of
(A) above.
(ii) for any partial fiscal year of the Corporation during which
Employee is employed by the Corporation and in respect of
which cash bonuses are payable to Employee hereunder, the
amount of such bonuses payable to Employee (and calculations
of business plan target achievement and individual
performance, as the case may require) shall be appropriately
prorated for such portion of such partial fiscal year as
shall fall within the operation of this provision.
(iii) on the date hereof, Employee shall be paid a bonus for
the year ending December 31, 1999 in the sum of Five Hundred
Thousand Dollars ($500,000) representing an Achievement
Bonus and Target Bonus as if Employee had completed a full
twelve months of employment. Employee shall be entitled to
be paid Base Compensation, including Achievement Bonus and
Target Bonus for the remainder of the Term of the Agreement
as earned.
(c) Other Emoluments and Benefits. The Employee shall be entitled to
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participate in all rights and benefits for which he shall be eligible under any
stock option plan, bonus, participation or extra compensation plans, pensions,
group insurance or other benefits which the Corporation may provide for its
executive employees generally from time to time during the term of this
Agreement, provided further that commencing the Effective Date and until formal
Company plans are in place, suitable temporary arrangements shall be made for
the Employee, including but not limited to paying current COBRA payments on his
behalf. Employee shall also be entitled to:
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(i) an allowance of One Thousand Five Hundred Dollars
($1,500.00) per month, payable monthly on the first day of
each month, during the term hereof to defray the costs of
the use of an automobile for business purposes;
(ii) An allowance to defray the cost of estate planning,
financial planning, and investment advisory services not in
excess of $10,000 per annum during the term hereof; and
(iii) In lieu of deferring employee's relocation costs, the
Corporation will lease on Employee's behalf an executive
residential quarters at a cost no greater than $2,000 per
month or, alternatively, the monthly costs of a residential
purchase including mortgage purchase costs of a residence,
limited to a $300,000 purchase price amortized over a 30-
year period plus monthly taxes and insurance payments.
(iv) Reimbursement of up to $5,000 for legal expenses incurred in
conjunction with the negotiation of this Employment
Agreement.
(d) Vacation. As of the Effective Date, Employee shall be entitled
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annually to 312 hours of time-off from the Employee Paid Time Off Pool as such
computation is customarily administered by the Corporation. Time-off or
vacation time not used during the calendar year or partial calendar year in
which earned may be carried forward to subsequent calendar years or partial
calendar years ("Carry Forward Time"). However, Employee may not carry over
more than 40 hours of Carry Forward Time in any one year and may not aggregate
more than 160 hours of Carry Forward Time in total.
(e) Stock Incentive Payments. Corporation shall provide Employee with
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equity compensation pursuant to the terms and conditions of Stock Option
Agreement as set forth on Exhibit A. The Discounted Vested Options as defined
in the Stock Option Agreement are in exchange of the Option Shares previously
granted to and vested in Employee pursuant to an Employment Agreement dated
effective May 1, 1999 between Employee and IWO, and more particularly described
therein at Exhibit A, Section (i) (a) and having an exercise price of
$489,000.00.
4. Expenses. The Corporation shall provide Employee with a Corporate
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credit card, and further shall pay or reimburse the Employee for all reasonable
traveling and other expenses incurred or paid by the Employee in connection with
the performance of his services under this Agreement upon presentation of
expense statements or vouchers and any such other supporting information in such
form as the Corporation may from time to time request; provided, however, that
the amount available for such traveling and other expenses shall be consistent
with general corporate policy guidelines established by Employee in his capacity
as the Chief Executive Officer of the Corporation.
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5. Payment. Expenses, benefits and allowances due Employee hereunder
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shall be paid not later than thirty (30) days following Employee's entitlement
to same, which, in the case of expenses, shall commence with the Employee's
request for reinbursement. Employee bonuses shall be paid within forty-five
(45) days following year end.
6. Restrictive Covenants. In consideration of the payment to Employee of
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the compensation specified in Paragraph 3 above, Employee hereby covenants and
agrees as follows:
(a) Employee shall treat either as trade secrets or as confidential or
proprietary information of the Corporation (i) any data or information acquired
during the course of or as a result of his employment, which is not otherwise
available to Employee except by reason of his employment, including but not
limited to such items as reports or findings from tests, investigative studies,
consultations or the like, and methodology, proposals, systems, programs or
marketing techniques, and strategies developed by but not generally released by
the Corporation or peculiar to the business of any customer or client of the
Corporation and all particularized information relating thereto; (ii) names or
lists of the Corporation's clients or information, data or services made
available to such clients not made public by the Corporation and non-public
information relating to the operating methods or plans or requirements of any
customer or client of the Corporation; and (iii) any other data or information
designated either by the Corporation or by any of its customers or clients as
confidential or proprietary.
(b) All improvements, discoveries, programs, processes, innovations,
and inventions (whether or not deemed patentable) conceived, devised, made,
developed or perfected by Employee during any period of his employment by the
Corporation or any period prior to the effective date hereof during which
Employee was in the service of any entity acquired by the Corporation or any
period prior to the effective date hereof during which Employee was in the
service of any entity acquired by the Corporation and related in any material
way to the business, including development and research of the Corporation,
shall be fully and promptly disclosed to the Corporation and the same shall be
the sole and absolute property of the Corporation. Upon request of the
Corporation, the Employee will execute all documents reasonably deemed
appropriate by the Corporation to secure the foregoing rights and for obtaining
the grants of patents, both domestic and foreign, with respect to such
improvements, discoveries, programs, processes, innovations or inventions and
for vesting title to such patents in the Corporation, provided however, that
Employee shall not be required to incur any costs or legal expenses in
conjunction with the compliance of any such request..
(c) Employee agrees to refrain, except as properly required in the
business of the Corporation, or as authorized in writing by the Corporation, (i)
from using for Employee's own benefit any matters to be treated as trade secrets
or as confidential or proprietary information under Paragraph (a) above; (ii)
from using these matters for the benefit of any other person, firm or
corporation; (iii) from disclosing these matters to any other person, firm or
corporation; and (iv) from authorizing or permitting such disclosure during the
term of his employment or thereafter.
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(d) Employee agrees to surrender to the Corporation at any time upon
request and in any event upon termination of employment, except as the
Corporation may otherwise consent in writing, all written documents, sketches,
records or information whether copyrighted or patented or not, or any copies of
imitations thereof, whether made by Employee or not, which embody or contain or
describe in any way those matters to be treated as trade secrets or as
confidential or proprietary information under Paragraph (a) above. The
Corporation shall not unreasonably withhold authorization for Employee to retain
any matters covered by this Paragraph 6, the continued possession of which by
Employee will not, in the Corporation's sole but reasonable, opinion, be
detrimental to the best interest of the Corporation.
(e) Employee agrees, during the term of his employment and for a
period of two (2) years after the termination thereof, whether such termination
be voluntary or not, that the Employee will not, except at the direction of the
Corporation, either directly or indirectly, for himself as a proprietor,
principal partner, director, officer, employee, agent or other representative
acquire or attempt to acquire the business then conducted by the Corporation
with any customer of the Corporation under any contracts existing or proposals
submitted on or before the date of termination of his employment.
The term "customer of the Corporation" for purposes hereof shall
mean any individual or entity which is the ultimate user or recipient of the
Corporation's (or any subsidiary of the Corporation) services and products
whether the same be made available directly to such entity or through an
intermediate purchaser of such services and products.
(f) Employee agrees to refrain, during the term of his employment and
for eighteen (18) months thereafter, from hiring or offering to hire, except
with the written permission of the Corporation, any employee of the Corporation
or from enticing away or in any other manner persuading or attempting to
persuade any employee of the Corporation to discontinue his relationship with
the Corporation, provided however, that nothing herein shall prohibit Employee
from hiring or offering to hire, any employee of the Corporation where the
initial hiring inquiry was solely initiated by any such employee or a third
party without direction from Employee.
(g) No provision of this paragraph 6 is intended to limit Employee's
right to use or disclose information which is in the public domain or a matter
of common knowledge, or which is generally known in the industry, or acquired by
him from a third party not prohibited from making such disclosure to him, or
which information was already known to Employee other than by breach of this
Agreement; nor is it intended to limit the Employee's obligation to comply with
lawful subpoenas or other lawful process.
(h) No act or failure to act shall be a waiver of any right conveyed
hereunder, except an express waiver in writing. The rights reserved to the
Corporation under this Paragraph 6 of this Agreement are necessarily of a
special, unique, unusual and extraordinary character, which gives them a
peculiar value, the loss of which cannot reasonably or adequately be
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compensated for in damages in an action at law, and the breach by Employee of
any of the provisions in this Paragraph 6 will cause the Corporation irreparable
injury. Therefore, in addition to any other available remedies, the Corporation
shall be entitled to an injunction to restrain any violation of this Agreement
by Employee, his agents, servants or employees and all persons, firms, or
corporations acting for or with him. The obligations of the Employee under the
covenants herein contained shall not cease upon termination of his employment
for whatever reason, except where otherwise limited in time above.
These covenants contained in this Paragraph 6 on the part of the
Employee shall each be construed as an agreement independent of any other
provision in this Agreement, and the existence of any claim or cause of action
of Employee against the Corporation, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Corporation
of such covenants. It is the intention of both parties to make the covenants of
this Paragraph 6 binding only to the extent that it may be lawfully done under
existing applicable laws. In the event that any part of any covenant of this
Paragraph 6 is determined by a court of law to be overly broad thereby making
the covenant unenforceable, the parties hereto agree, and it is their desire,
that such court shall substitute a reasonable judicially enforceable limitation
in place of the offensive part of the covenant, and that as so modified the
covenant shall be as fully enforceable as set forth herein by the parties
themselves in the modified form.
7. Terms and Earlier Termination.
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(a) Subject to the provisions for earlier termination as herein
provided, the term of this Agreement shall commence and terminate as specified
above, but shall continue in full force and effect thereafter until either party
shall have given the other thirty (30) days' prior written notice of such
party's intention to terminate this Agreement.
(b) This Agreement shall terminate prior to the expiration date
hereinafter set forth in the event that the Board of Directors shall determine
that the Employee has become disabled, or the Employee shall be dismissed for
cause, as hereinafter provided:
(i) The Board of Directors of the Corporation may determine that
the Employee has become disabled, for purposes of this
Agreement, in the event that the Employee shall fail,
because of illness or incapacity, to render for one hundred
twenty (120) successive days in excess of the number of days
provided for in the Corporation's then applicable sick leave
policy or for shorter periods aggregating one hundred ninety
(190) days or more in excess of the number of days provided
for in the Corporation's then applicable sick leave policy
during the term hereof, services of the character
contemplated by this Agreement, and thereupon this Agreement
and the employment of the Employee hereunder shall be deemed
to have been terminated as of the end of the calendar month
in which
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such determination was made. Any termination under this
Paragraph 7(b)(i) shall not be deemed to be a termination
"for cause" for any purpose under the Agreement or under any
other contract or arrangement between the Employee and the
Corporation relating to employment services or compensation
between them.
(ii) The Board of Directors may dismiss the Employee for cause in
the event that they determine that the Employee has
committed: (A) fraud or material dishonesty; or (B)
intentional or willful or grossly negligent injury to the
Corporation; (C) criminal conduct in relation to his
employment; or (D) continued neglect of his duties hereunder
which continues subsequent to fifteen (15) days written
notice to cure, provided that if a longer cure period is
required Employee shall diligently pursue such cure; and
thereupon, this Agreement shall terminate and the Employee
shall be removed from all positions held by him with the
Corporation and any subsidiary corporation, effective upon
the delivery to the Employee by the Board of Directors of
notice that they have made such determination; any other
termination by the Corporation shall be considered
termination without cause for purposes of this Agreement and
any other contract or arrangement between the parties
hereto. In the event that the Board of Directors shall
desire to dismiss the Employee based on any determination
referred to in the preceding sentence, such determination
shall be effective only upon the following conditions
complied with in the following order: (A) Employee shall be
furnished with a written statement specifying in reasonable
detail the actions or events supporting such determination;
(B) at the request of the Employee, there shall be convened
a Special Meeting of the Board of Directors no later than
fifteen (15) business days after Employee's receipt of the
notice referred to in (A) above at which meeting the
Employee may, with assistance of counsel or other
representation, present evidence to refute or in mitigation
of such actions or events or to establish that the actions
or events have been cured; and (C) within five (5) business
days after the adjournment of such Special Meeting the Board
of Directors shall furnish a written statement to Employee
that, based upon Employee's representations and upon other
relevant evidence such determination has either been
confirmed or rescinded.
(iii) The Board of Directors may terminate this Agreement and
dismiss the Employee, without cause and for any reason
deemed sufficient by the Board of Directors. In the event
that the Board of Directors
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shall decide to dismiss the Employee and terminate this
Agreement based on any determination referred to in the
preceding sentence, such determination shall be effective as
of such date as shall be designated by notice in writing
from the Board of Directors to the Employee (the "Effective
Termination Date"). In the event that this Agreement is
terminated pursuant to this subparagraph (iii), Employee
shall be entitled to payment on the Effective Termination
Date of an amount equal to (A) the lesser of the basic
salary due pursuant to paragraph 3(a) to accrue during the
remainder of the initial three-year term of this Agreement
or the basic salary that would be due under paragraph 3(a)
for the eighteen (18) month period following the Effective
Termination Date; provided, however, that in no event shall
the Employee be paid less than the salary which would be due
Employee under Paragraph 3(a), including any increases which
may be granted from time to time, for the six (6) month
period following the Effective Termination Date (including
but not limited to any period beyond the initial term); plus
(B) such cash bonus compensation prorated to the Effective
Termination Date otherwise due Employee pursuant to
paragraph 3(b); and (C) the benefits to be paid to Employee
pursuant to paragraph 3(c), 3(d) and 3(e) prorated to the
Effective Termination Date.
(c) Notwithstanding anything to the contrary contained herein, any
termination of Employee's employment by the Corporation pursuant to the terms of
this Paragraph, shall not affect or diminish: (i) any rights accruing to the
Employee under this Agreement prior to the effective date of such termination
and in such event Employee rights to all compensation, including, but not
limited to, Paragraphs 3 and 4 above, shall be calculated and paid for and in
respect of any period prior to such effective date; and (ii) any rights or
remedies available to the Corporation by reason of any breach or threatened
breach of the provisions of Paragraph 7 hereof, the force and effect of which
provisions shall survive the termination of this Agreement, however such
termination occurs.
(d) In the event Employee gives his notice to terminate prior to the
expiration of the Initial Term, Employee shall be entitled to any rights
accruing to the Employee under this Agreement prior to the effective date of
termination and in such event Employee rights to all compensation shall be
calculated and paid for to such effective date, including but not limited to,
his Base Compensation as described in 3 (a), his bonus compensation described in
3 (b), his emoluments and benefits as described in paragraph 3 (c), any unused
vacation as set forth in paragraph 3(d), and any incurred or paid expenses as
set forth in paragraph 4. Additionally Employee shall be entitled to any vested
Stock Options as described in his Stock Option Agreement.
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8. Partial Invalidity. All paragraphs, subparagraphs, and portions of
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this Agreement shall be considered as separate and distinct from one another,
and if, for any reason any paragraph, subparagraph or portion of this Agreement
shall be held to be invalid or unenforceable, it is agreed that the same shall
Not be held to affect the validity or enforceability of the remaining
paragraphs, subparagraphs or portions of this Agreement.
9. Notice. Any notices, requests, demands or other communications
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required or permitted under this Agreement shall be in writing and shall be
deemed to have been given when delivered personally, one (1) day after being
sent by recognized overnight courier service with all charges prepaid or charged
to the sender's account, or three (3) days after being mailed by certified mail,
return receipt requested, addressed to the party being notified at the address
of such party first set above, or at such other address as such party may
hereafter have designated by notice; provided, however, that any notice of
change of address shall not be effective until its receipt by the party to be
charged therewith. Copies of any notices or other communications to the
Corporation shall simultaneously be sent by first class mail to Independent
Wireless One Corporation, c/x Xxxx and Xxxxxxx LLP at 000 Xxxxxxxxx Xxxxxx,
Xxxxx, Xxx Xxxx 00000-0000. A copy of any notice sent to the Employee shall be
simultaneously sent to Xxxxxx X. Xxxxxx, Esq., Xxxxxxxxxx Xxxxxxx PC,
00 Xxxxxxxx Xxxxxx - Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxx 00000, facsimile no.
(000) 000-0000.
10. Corporation Defined. The term "Independent Wireless One Corporation"
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and "IWO Holdings, Inc." as used in this Agreement, shall include, respectively,
Independent Wireless One Corporation, and IWO Holdings, Inc., their respective
successors and/or assigns, any subsidiary corporations of either IWO or Holdings
and any corporation into which or which either IWO or Holdings may be merged or
consolidated or to which all, or substantially all, of their respective
businesses and/or assets are transferred.
11. Waiver of Breach. The waiver by either party, of a breach of any
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provisions of this Agreement, shall not operate or be construed as a waiver of
any subsequent breach by the same party.
12. Integration; Entire Agreement. This instrument contains the entire
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agreement of the parties with regard to the subject matter hereof and supersedes
all prior oral or written understandings, memoranda or communications with
regard to the terms or conditions of Employee's employment by the Corporation.
This Agreement may not be changed orally, but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
13. Binding Effect. Except as otherwise provided hereinabove, this
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contract shall inure to the benefit of, and be binding upon, the heirs,
executors, administrators, successors and assigns of the parties hereto.
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14. Assignment. Corporation may assign all or any portion of
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Corporation's rights or delegate all or any portion of Corporation's duties
under this Agreement to any Affiliate or to any entity that acquires all or a
substantial portion of the business of the Corporation and Affiliates. However,
any such assignment or delegation shall not relieve Corporation of its financial
obligations to Employee under this Agreement. Except in conjunction with his
estate planning or in the event of death, Employee may not assign any rights
under this Agreement or delegate any duties under this Agreement.
IN WITNESS WHEREOF, the Corporation had caused this Agreement to be signed
by their respective officers hereunto duly authorized, and the Employee has
hereunto set his hand and seal, effective as of the day and year first above
written.
EMPLOYEE
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
INDEPENDENT WIRELESS ONE
CORPORATION
By /s/ X.X. Xxxx III
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J. K Xxxx III, Secretary
IWO HOLDINGS, INC.
By /s/ X.X. Xxxx III
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X.X. Xxxx III, Secretary
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