EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") made as of November 12, 1998
(the "Effective Date") by and between the undersigned employee, residing at
the address indicated below (hereinafter referred to as "Employee") and CS
Wireless Systems, Inc., a Delaware corporation having its principal place of
business at 0000 Xxxxxx Xxxxxx, Xxxxx, Xxxxx 00000 (hereinafter referred to
as the "Company").
1. EMPLOYMENT. The Company hereby employs Employee and Employee agrees
to work for the Company with the title specified on Schedule A below during
the Term (as defined below) of and upon the terms and conditions set forth in
this Agreement.
2. COMPENSATION/BENEFITS. (a) BASE SALARY. During the Term of this
Agreement, the Company agrees to pay Employee the base annual salary
specified on Schedule A below ("Base Salary"). Such Base Salary shall be
reviewed no less frequently than annually during the term of this Agreement
and may be increased but not decreased by the Company's board of directors.
Such Base Salary shall be payable in accordance with the Company's normal
business practices or in such other amounts and at such other times as the
parties may mutually agree.
(b) BONUSES. During the Term of this Agreement, the Company shall
pay to the Employee an annual bonus of up to 25% of Base Salary, based upon
the Company's achievement of performance targets established by the Company's
board of directors. These targets will be revised annually within ninety
days of the beginning of each fiscal year in consultation with the Employee.
The bonus may be structured as a part of a deferred compensation arrangement.
(c) INCENTIVE COMPENSATION. During the Term of this Agreement,
Employee shall be entitled to participate in any pooled incentive programs
established by the Company for executive employees.
(d) BENEFITS/VACATION. During the Term of this Agreement, the
Company also shall provide Employee with such other benefits, including
medical, disability, pension and severance plans, as are made generally
available to executive employees of the Company from time to time. Employee
shall be entitled to twenty-six bank days as the vacation, personal and sick
benefit during each year of the Term in accordance with the policy set forth
in the Employee Manual of the Company. Accrued vacation may be carried over
or "sold back" to the Company to the extent permitted by, and in accordance
with, the policy set forth in the Employee Manual of the Company.
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(e) LIFE INSURANCE. Subject to Employee's submitting to any required
physical examinations, the Company shall purchase and maintain in effect a
term insurance policy with a face amount of one times Employee's Base Salary
or other greater amount as may be specified in the Company's executive
benefit policies or plans on the life of Employee and shall permit Employee
to designate the beneficiary thereof.
3. SERVICES. Employee agrees to devote substantially all of his
working time, attention and energies to the business of the Company and its
Affiliates under the general direction of the board of directors acting
through its Chairman and delegated officers. Nothing herein shall be
interpreted to preclude Employee from participating as an officer or director
of, or advisor to, any charitable or other tax exempt or civic organization.
4. TERM. The term of this Agreement (the "Term" or the "Term of this
Agreement") shall be for a period beginning on the Effective Date and
continuing until the first anniversary of the Effective Date, and shall be
automatically renewed annually thereafter for successive one year periods on
terms no less favorable than are contained herein unless either party gives
notice to the other of its intention not to renew this Agreement within sixty
days of the expiration of the Term of this Agreement.
5. EARLY TERMINATION. (a) IN GENERAL. The Employee's employment
hereunder shall be terminated and, other than the obligations listed in
Paragraph 5(b), the Company's obligations hereunder shall cease, including
the obligation to pay compensation for any period after the date of
termination, (i) without the necessity of notice, upon the death of the
Employee, or (ii) upon written notice of a finding by the Company's board of
directors that the Employee has (a) acted with gross negligence or willful
misconduct in connection with the performance of his duties hereunder,
(b) engaged in a material act of insubordination or of common law fraud
against the Company or its employees, or (c) acted against the best interests
of the Company in a manner that has or could have a material adverse affect
on the financial condition of the Company (any such finding is referred to
herein as "Cause"). Upon any termination of Employee's employment, the Term
of this Agreement shall expire. In the event of Employee's death or
Employee's termination of employment by the Company other than for Cause,
Employee shall be entitled to severance in an amount equal to his then Base
Salary under Paragraph 2 (the "Severance Amount"), payable in twelve equal
monthly installments. If, within eighteen months following the Effective
Date, (a) Employee terminates his or her employment for Good Reason, or (b)
the Company terminates Employee's employment other than for Cause, the
Company shall pay the Severance Amount in a lump sum not later than ten (10)
days after the date the Company selects as Employee's last day of active
employment (the "Effective Date"), provided, however, that at Employee's
option, the Severance Amount shall be payable to Employee in the form of
equal periodic payments ("Deferred Payment") according to the Company's
regular payroll schedule or at any other intervals elected by Employee for a
period commencing on the first regular payroll pay date beginning after the
Effective Date (the
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"Deferred Payment Period"). In order to receive Deferred Payment during a
Deferred Payment Period, Employee must elect such Deferred Payment in writing
and specify the Deferred Payment Period, which may not exceed the number of
months of Base Monthly Salary payable to Employee as the Severance Amount.
In the event of Employee's death during the Deferred Payment Period, any
unpaid Deferred Payment shall be paid in a lump sum to such beneficiary or
beneficiaries designated by Employee in writing or, failing such designation,
to Employee's spouse if Employee is married or to Employee's estate if
Employee is unmarried.
(b) PAYMENTS UPON TERMINATION. Upon termination of this Agreement for
any reason, Employee shall be entitled to all compensation and benefits
earned but not yet paid up to and including the termination date, including
Base Salary, bonus and any other incentive compensation. Unless otherwise
specified in this Agreement, unused vacation shall be treated in accordance
with the policy set forth in the Employee Manual of the Company.
(c) GOOD REASON. For purposes of this Agreement, Good Reason shall
mean, with respect to Employee, (i) the assignment to Employee of any
material duties materially inconsistent with Employee's position, authority,
duties or responsibilities immediately before the Effective Date, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken
in bad faith and that is remedied by the Company promptly after receipt of
notice thereof given by Employee; (ii) any material reduction in Employees
Base Salary, opportunity to earn annual bonuses or other compensation or
employee benefits, other than as a result of an isolated and inadvertent
action not taken in bad faith and that is remedied by the Company promptly
after receipt of notice thereof given by Employee; (iii) the Company's
requiring Employee to relocate his or her principal place of business to a
place that is more than thirty-five miles from his or her previous principal
place of business, or (iv) any purported termination of this Agreement
otherwise than as expressly permitted by this Agreement.
(d) DISABILITY. If Employee shall become unable efficiently to
perform the essential functions of his job, even with reasonable
accommodation, as a result of a disability or illness, as such terms are
defined by the Americans with Disabilities Act, he shall be entitled to his
regular compensation until the total period of disability or illness (whether
or not continuous and whether or not the same disability or illness) shall
exceed 60 days during any calendar year in the Term hereunder. This
Agreement may thereafter be terminated by the Company and, if such
termination is not within two years of the Effective Date, the Company's
obligations hereunder shall cease, including the obligation to pay
compensation for any period after the date of termination. Any amounts
payable as compensation during the period of disability or illness shall be
reduced by any amounts paid during such period under any disability plan or
similar insurance of the Company.
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6. EMPLOYER'S AUTHORITY. Employee agrees to observe and comply with the
rules and regulations of the Company as adopted by the Company's President or
Chief Executive Officer or by the Company's board of directors respecting the
performance of his duties and to carry out and perform orders, directions and
policies communicated to him from time to time.
7. EXPENSES. During the Term of this Agreement, the Company shall
reimburse Employee for the reasonable business expenses incurred by Employee
in the course of performing his duties for the Company hereunder in
accordance with the procedures then in place for such reimbursement.
8. AUTOMOBILE ALLOWANCE. During the Term of this Agreement, Employee
shall be entitled to an automobile allowance as specified on Schedule A
below, payable monthly in arrears.
9. NON-DISCLOSURE/NON-COMPETITION. (a) Employee has executed a
Nondisclosure Agreement of the Company. Said agreement shall survive
termination of employment hereunder.
(b) Because Employee's services to the Company are special and
because Employee has access to the Company's confidential information,
Employee covenants and agrees that if (i)(x) Employee's employment is
terminated by the Company for Cause or (y) Employee voluntarily terminates
his employment relationship hereunder with the Company other than for Good
Reason, for a period of six (6) months following the termination of this
Agreement, or (ii) Employee's employment is terminated and Employee is
receiving the Severance Amount, for the period during which Employee is
receiving such Severance Amount under Paragraph 5 hereof, whichever is
applicable, he will not, directly or indirectly, either on his own behalf or
on behalf of any person, partnership, corporation or otherwise, (a) engage in
any business or undertaking in a capacity that is directly competitive with
any business (each a "Related Business") being carried on by the Company or
any Affiliate thereof at the time of Employee's termination of employment, or
(b) be employed by or provide consulting services to or be an investor,
partner, member or shareholder in, any entity or other person in a Related
Business within 25 miles of any city in which the Company or any Affiliate
thereof, does business at time of execution or any other city or community in
which the Company or any Affiliate thereof, has a transmission license at the
time of termination, without the prior written consent of the Company's board
of directors. The parties agree that the time period and geographical area
of non-competition specified above are reasonable and necessary in light of
the transactions entered into in this Agreement. If, however, it shall be
determined at any time by a court of competent jurisdiction that either the
time period restriction or the geographical area restriction, or both, are
invalid or unenforceable, the parties agree that any such restriction
determined to be invalid or unenforceable shall be deemed so amended as to
make such restriction valid and enforceable in the
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determination of said court, and such restriction, as so amended, shall be
enforceable between the parties to the same extent as if such amendment had
been made as of the date of this Agreement. This subparagraph 9(b) shall
survive the termination of this Agreement.
10. EXECUTION, DELIVERY AND PERFORMANCE. To the best of Employee's
knowledge, the execution, delivery and performance by Employee of this
Agreement or any other agreement, instrument or document contemplated herein
or hereby will not result in a breach of or conflict with any terms of any
other agreement, instrument or document to which Employee is a party or by
which Employee or his property is bound. No consent or approval of any
person or entity, other than those that have been obtained by Employee, is
required for Employee to execute, deliver and perform its obligations under
this Agreement or any agreement, instrument or document contemplated herein
or hereby.
11. NOTICES. Any notice permitted or required hereunder shall be deemed
sufficient when hand-delivered or mailed by certified mail, postage prepaid,
and addressed if to the Company at the address indicated above and if to the
Employee at the address indicated below (or to such other address as may be
provided by written notice received at least five (5) business days prior to
the hand delivery or mailing of any such notice).
12. MISCELLANEOUS. (a) This Agreement (i) constitutes the entire
agreement between the parties concerning the subjects hereof and supersedes
any and all prior agreements or understandings, (ii) may not be assigned by
Employee without the prior written consent of the Company, and (iii) may be
assigned by the Company to any Affiliate of the Company or to the successors
or assigns of the Company, provided such successors or assigns carry on
substantially the Company's telecommunications business as conducted at the
time of assignment and shall be binding upon, and inure to the benefit of,
any such Affiliate, successor or assign.
(b) Headings herein are for convenience of reference only and shall
not define, limit or interpret the contents hereof.
(c) As used herein, the term "Affiliate" shall mean any entity
controlled by or under common control with the Company.
13. AMENDMENT. This Agreement may be amended, modified or supplemented
by the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
14. SPECIFIC ENFORCEMENT. The parties acknowledge that the Company
would be irreparably damaged and there would be no adequate remedy at law for
the Employee's
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breach of Paragraph 9 of this Agreement, and accordingly, the terms thereof
shall be specifically enforced. Employee hereby consents to the entry of any
temporary restraining order or preliminary injunction, in addition to any
other remedies available at law or in equity, to enforce the provisions
hereof, provided sufficient facts are shown to warrant such relief.
15. SEVERABILITY. The provisions of this Agreement are severable. The
invalidity of any provision shall not affect the validity of any other
provision.
16. GOVERNING LAW. This Agreement shall be construed and regulated in
all respects under the laws of the State of Texas.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
CS WIRELESS SYSTEMS, INC. EMPLOYEE:
By: By:
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Name: Xxxxx X. Xxxx Name: Xxxxxx X. XxXxxxx, Xx.
Title: Chief Executive Officer
