1
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into, effective
as of the _______ day of __________, 1999, by and between American Telecasting,
Inc., ("ATI") a Delaware corporation, and Xxx X. Xxxxxxx ("Employee").
W I T N E S S E T H:
WHEREAS, ATI and Employee wish to enter into an Employment Agreement to
reflect certain terms and conditions of ATI's employment of Employee.
NOW, THEREFORE, in consideration of the premises and mutual promises
set forth herein, the sufficiency of which is hereby acknowledged, the parties
hereby agree as follows:
1. Employment; Duties. ATI hereby agrees to employ Employee as a
Vice-President - Operations, or in any other executive capacity as ATI shall
determine is necessary or appropriate in connection with the operation of ATI,
and Employee hereby agrees to serve in such capacity. Employee's principal areas
of responsibility, subject to modification by ATI, shall be management of the
operations of certain ATI wireless cable television systems. Employee shall
perform such additional duties of a responsible nature and not inconsistent with
his position with ATI as shall be designated from time to time by ATI. Employee
agrees to use his best efforts to promote the interests of ATI and to devote his
full business time and energies to the business and affairs of ATI.
2. Term of Agreement. The term of this Agreement shall commence on the
date first written above (the "Effective Date") and such term and the employment
hereunder shall continue, unless earlier terminated in accordance with the terms
of Paragraph 4, until the Expiration Date (the "Term of Employment"). The
Expiration Date shall be _________, 2001, subject to annual extensions as
provided below. The Expiration Date shall be automatically extended for
additional one year periods unless, at least one year before the then-effective
Expiration Date, either the Company or the Employee provides written notice to
the other that it intends to terminate this Agreement on the then-effective
Expiration Date.
3. Compensation.
(a) Base Salary. As compensation for Employee's services rendered by
the Employee hereunder, ATI shall arrange to have Employee paid a base salary at
an annual rate equal to $102,500 per year ("Base Salary"), which shall be
increased by at least 5% at the beginning of each calendar year. The Base Salary
to be paid by ATI shall be payable to the Employee in accordance with ATI's
standard policies for management personnel.
2
(b) Bonus. Employee shall be eligible to participate in the executive
bonus program established by the Compensation Committee of the Board of
Directors.
(c) Benefits. Employee shall be entitled to participate in all benefit
programs established by ATI and generally applicable to ATI's executive
employees. Employee shall be reimbursed for legitimate business expenses
incurred in the course of his employment with ATI pursuant to ATI policies as
established from time to time. Employee shall be provided with the use of, or an
allowance for, a car as determined by the Board of Directors.
4. Termination of Employment Relationship.
(a) Death or Incapacity. This Agreement shall terminate immediately
upon the death or incapacity of Employee.
(b) Termination by ATI. This Agreement may be terminated by ATI with or
without cause and, in such event, the Term of Employment shall terminate at the
termination date designated by ATI. For the purpose of this Agreement,
"Termination for Cause" or "Cause" shall include, but is not limited to, any
conduct involving dishonesty or moral turpitude or failure of the Employee to
devote full business time and energies to the business and affairs of ATI. ATI
may terminate Employee with or without Cause without prior notice.
(c) Termination by Employee. Employee may terminate this Agreement for
any reason and at any time upon giving thirty (30) days prior notice; provided,
however, that Employee's obligations under Paragraph 5 shall survive any
termination of this Agreement by Employee, by ATI or otherwise.
(d) Payment Upon Termination. If this Agreement is terminated by
Employee or by ATI for Cause prior to the completion of the Term of Employment,
the employee shall not be entitled to severance pay of any kind but shall be
entitled to all reasonable reimbursable expenses incurred by Employee and the
Base Salary earned by Employee prior to the date of termination, and all
obligations of ATI under Paragraph 3 hereof shall terminate upon the termination
date designated by ATI, except to the extent otherwise required by law. In the
event that Employee is terminated without Cause, ATI shall pay Employee, as
severance pay an amount equal to 12 months of Base Salary, to be paid in
accordance with ATI's standard policies for management personnel. In the event
Employee is terminated without Cause, Employee's group health insurance coverage
shall be continued, to the extent permitted by ATI's group health insurance plan
at that time, for a period of 12 months, or until Employee is eligible for
coverage under a different group health plan, whichever occurs first, and
Employee shall pay the portion of the premium allocable to other employees of
ATI generally, which allocable amount shall be deducted from payments made
pursuant to the prior sentence. If Employee is terminated without Cause after
the first calendar quarter of any year, Employee shall also be entitled to
receive, with respect to work performed in such calendar year, the bonus
described in Paragraph 3(b) which shall be pro-rated for the number of days in
the year worked by Employee. If Employee is terminated without Cause within the
first calendar quarter of any year, Employee will not be
-2-
3
entitled to receive such bonus with respect to work performed in such calendar
year.
Notwithstanding any other provision in this Agreement to the contrary,
in the event Employee terminates his employment following a Change in Employment
Conditions, as defined below, the Employee shall be entitled to receive all the
benefits he would have received under this Agreement if he had been terminated
without Cause. For purposes of this Agreement, a Change in Employment Conditions
shall be:
i) a change by ATI in the Employee's function to a new position that is
not an executive officer position with executive officer
responsibilities; and
ii) the Employee's principal place of employment is relocated to a
place located outside the State of Colorado.
5. Non-Competition Agreement. Employee acknowledges that his services
to be rendered hereunder have a unique value to ATI, for the loss of which ATI
cannot be adequately compensated by damages in an action at law. In view of the
unique value to ATI of the services of Employee, and because of the Confidential
Information to be obtained by or disclosed to Employee, and as a material
inducement to ATI to enter into this Employment Agreement and to pay to Employee
the compensation referred to in Paragraph 3 hereof, Employee covenants and
agrees that:
(a) While Employee is employed by ATI, and for a period of one (1) year
thereafter, the Employee will not, either personally, whether as principal,
partner, employee, agent, distributor, representative, stockholder or otherwise,
or with or through any other person or entity, operate or participate in the
wireless cable business or any other business which competes with ATI as of the
date of Employee's termination date (for purposes of Paragraph 5 hereof, ATI
shall be deemed to include all subsidiaries and joint ventures of ATI whether
now or hereafter affiliated with ATI) nor will Employee directly or indirectly
(i) solicit any person who has been a supplier or customer of ATI during the
period of one (1) year prior to the termination of employment, or (ii) solicit
or acquire wireless cable television channel licenses or leases of wireless
cable television channel licenses; provided, however, that during the period of
one (1) year following termination of his employment with ATI Employee may own
up to 1% of the stock of another company in the wireless cable business which is
traded on a national stock exchange or on the NASDAQ National Market System.
This non-competition clause shall apply in the geographic territory comprised of
the entire United States and any other geographic area in which ATI is engaged
in business.
(b) It is agreed that the Employee's services are unique, and that any
breach or threatened breach by the Employee of any provisions of this Paragraph
5 may not be remedied solely by damages. Accordingly, in the event of a breach
or threatened breach by the Employee of any of the provisions or this Xxxxxxxxx
0, XXX shall be entitled to injunctive relief, restraining the Employee and any
business, firm, partnership, individual, corporation, or entity participating in
such breach or attempted breach, from engaging in any activity which would
constitute a
-3-
4
breach of this Paragraph 5. Nothing herein, however, shall be construed as
prohibiting ATI from pursuing any other remedies available at law or in equity
for such breach or threatened breach, including the recovery of damages.
(c) In the event Employee's employment by ATI is terminated for any
reason during the Term of Employment, the provisions of this Paragraph 5 shall
survive the termination of this Agreement and the termination of Employee's
employment. The provisions of this Paragraph 5 shall not otherwise survive.
6. Assignability. Neither party may assign its rights and obligations
under this Agreement without the prior written consent of the other party, which
consent may be withheld for any reason or for no reason; provided that (i) ATI
may assign its rights and obligations under this Agreement to any entity which
is the successor or assign of ATI's entire business, and (ii) in the event ATI
is reorganized or restructured, ATI may assign its rights and obligations under
this Agreement without restriction or limitation to any assignee which continues
to conduct substantially the same business as ATI and in which ATI controls,
directly or indirectly, 50% or more of the voting power. This Agreement is
binding upon and inures to the benefit of all successors and permitted assigns
of the parties.
7. Severability. In the event that any of the provisions of this
Agreement shall be held to be invalid or unenforceable, the remaining provisions
shall nevertheless continue to be valid and enforceable as though invalid or
unenforceable parts had not been included therein. Without limiting the
generality of the foregoing, in the event that any provision of Paragraph 5
relating to time period and/or areas of restriction shall be declared by a court
of competent jurisdiction to exceed the maximum time period or area(s) such
court deems enforceable, said time period and/or area(s) of restriction shall be
deemed to become, and thereafter be, the maximum time period and/or area for
which such are enforceable.
8. Entire Agreement. This Agreement constitutes the entire agreement
between the parties relating to the subject matter hereof and supersedes all
prior agreements or understandings among the parties hereto with respect to the
subject matter hereof.
9. Amendments. This Agreement shall not be amended or modified except
by a writing signed by both parties hereto.
10. Miscellaneous. The failure of either party at any time to require
performance of the other party of any provision of this Agreement shall in no
way affect the right of such party thereafter to enforce the same provision, nor
shall the waiver by either party of any breach of any provision hereof be taken
or held to be a waiver of any other or subsequent breach, or as a waiver of the
provision itself. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Colorado, without regard to the
conflict of laws of such State. The benefits of this Agreement may not be
assigned nor any duties under this Agreement be delegated by the Employee
without the prior written consent of ATI, except as contemplated in this
Agreement.
-4-
5
11. Survival. The rights and obligations of the parties shall survive
the Term of Employment to the extent that any performance is required under this
Agreement after the expiration or termination of such Term of Employment.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same document.
13. Notices. Any notice to be given hereunder by either party to the
other may be effected in writing by personal delivery, or by mail, certified
with postage prepaid, or by overnight delivery service. Notices sent by mail or
by an overnight delivery service shall be addressed to the parties at the
addresses appearing following their signatures below, or upon the employment
records of ATI but either party may change its or his address by written notice
in accordance with this paragraph.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first written above.
AMERICAN TELECASTING, INC. EMPLOYEE
By:
---------------------------- --------------------------
Xxx X. Xxxxxxx
-5-
