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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") made and entered into by and between
XXXXXX X. XXXXXX (the "Executive") and CT COMMUNICATIONS, INC. (collectively
defined and referred to as the "Parties");
WITNESSETH:
WHEREAS, Executive has served as Senior Vice President of the Company
for more than four years and is highly knowledgeable about the business and
operations of its organization and the customers that it serves;
WHEREAS, the Company desires to continue to employ Executive, and
Executive desires to continue to be employed, in the new position of Executive
Consultant as he transitions from his overall employment with the Company,
subject to the terms and conditions set forth in this Agreement;
WHEREAS, the Parties acknowledge and agree that this Agreement is
supported by valuable consideration and is entered into voluntarily by the
Parties;
NOW, THEREFORE, in exchange for the premises and mutual covenants
contained in this Agreement, the Parties, intending legally to be bound, agree
as follows:
1. EMPLOYMENT. The Company agrees to employ Executive during the
Employment Term (as defined in Section 3 below), and Executive hereby accepts
such employment and agrees to serve the Company subject to the general
supervision and direction of the President of the Company (the "Company
President").
2. DUTIES. During the Employment Term, Executive shall be employed as
an Executive Consultant of the Company and shall perform such general consulting
services and other duties required of his new position as the Company President
may from time to time designate commensurate with Executive's past positions,
experience and expertise with the Company. Executive further agrees to abide by
the general employment policies and procedures applicable to his position as
established from time to time by the Company. However, the Parties agree that
Executive may also be engaged as an employee or otherwise in other
non-competitive business, commercial or non-profit activities during the
Employment Term, provided that such engagements: (a) are specifically authorized
in advance by the Company President (whose authorization shall not be
unreasonably withheld); and (b) do not prevent or unduly limit Executive's
ability to perform his ongoing obligations with the Company.
3. TERM. Unless sooner terminated as provided in Section 6 below, the
Parties agree that Executive shall be employed by the Company pursuant to this
Agreement for a period beginning March 15, 2000 and ending September 15, 2000
(the "Employment Term"), at which time Executive agrees that he shall
permanently retire from his employment with the Company in accordance with
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the Company's early retirement provisions contained in its Supplemental
Executive Retirement Plan (SERP). Executive further agrees that after execution
of this Agreement by him, he will not apply for other employment, expanded
employment, reemployment or contract work with the Company in the future except
as otherwise set forth in this Agreement.
4. COMPENSATION.
A. BASE SALARY. During the Employment Term, the Company will
pay Executive a base salary as compensation for Executive's services
hereunder at a monthly base rate of $11,833.33, equivalent to
$142,000.00 per year (the "Base Salary"), payable to Executive by the
Company in monthly installments, less applicable deductions required by
law.
B. OTHER BENEFITS. During the Employment Term, and except as
set forth in Section 4.c. below, the Company will continue to provide
to Executive those general benefits that he received and/or in which he
participated with the Company immediately prior to his employment as
Executive Consultant, including all pension, SERP and other retirement
plans, and all group health, hospitalization and permanent disability
plans or other employee welfare benefit plans, as may be amended from
time to time and provided Executive otherwise remains eligible to
participate in such plans by their terms.
C. BONUS/LEAVE. Executive will not be eligible to receive or
participate in any Annual Incentive Program Bonus, Long-Term Incentive
Plan (LTIP) Bonus or other bonuses or executive compensation plans for
2000 if and as may be awarded to other employees from time to time by
the Board of Directions of the Company, in its absolute and sole
discretion. The Parties, however, agree that Executive shall remain
entitled to receive and shall not forfeit any vested Annual Incentive
Program Bonus, Long-Term Incentive Plan Bonus or other executive
compensation plan pay earned or accrued by him for 1999. In addition,
Executive agrees that he will not be eligible for any paid or unpaid
vacation, sick leave or personal days for 2000.
D. CELLULAR PHONE/ COMPUTER. During the Employment Term,
Executive shall continue to have the use of the Company cellular phone
and computer currently assigned to him for use in connection with the
performance of his duties under this Agreement. Executive agrees that
he shall be responsible for the cost of all cellular telephone use,
roaming charges, fees, taxes and services (excluding the current
monthly base charge which shall be paid by the Company) associated with
his use of the Company cellular telephone for non-Company business.
Executive further agrees that he shall be responsible for the cost of
all software packages, Internet service charges and any other expenses
associated with his use of the Company computer for non-Company
business. In addition, Executive agrees that he shall return the
Company cellular phone and computer to the Company upon or before the
end of the Employment Term. Executive also acknowledges and agrees that
his authorization for business-related costs and other expenses
associated with the use of the Company cellular phone and computer
shall be discontinued as of the end of the Employment Term.
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5. REIMBURSEMENT OF EXPENSES. Subject to prior approval of the Company
President, and upon submission of proper vouchers to the Company, the Company
shall pay or reimburse Executive for all normal and reasonable business expenses
incurred by Executive during the Employment Term in accordance with the
Company's policy then in effect concerning the same.
6. TERMINATION.
A. TERMINATION EVENTS. The Employment Term shall terminate
immediately upon the occurrence of any of the following events: (i)
upon the death of Executive; (ii) upon the effective date of
Resignation by Executive (as defined below); or (iii) upon the close of
business on the date the Company gives Executive notice of Termination
for Just Cause (as defined below).
B. RESIGNATION. For purposes of this Agreement, "Resignation
by Executive" shall mean any voluntary termination or resignation by
Executive of his employment with the Company. Executive is required to
give at least thirty (30) days advance written notice of resignation to
the Company, and the Company is entitled upon receiving such notice, in
its discretion, to accept such resignation as effective on: (i) the
resignation date proposed by Executive, or (ii) such other earlier date
designated by the Company. In addition, the Company will be required to
pay Executive his regular salary and benefits only through Executive's
final resignation date as agreed to or revised by the Company,
regardless of whether Executive is actually permitted to perform any
services for the Company during that period.
C. TERMINATION FOR JUST CAUSE. For purposes of this Agreement,
"Termination for Just Cause" shall mean termination of the employment
of Executive by the Company as the result of: (i) any conviction,
guilty plea, confession or plea of nolo contendere by Executive for any
crime involving moral turpitude or for any felony; or (ii) any act of
fraud or dishonesty by Executive in connection with Executive's
employment with the Company or against any of the Company's customers;
or (iii) the breach or threatened breach of any provision of this
Agreement by Executive; or (iv) the refusal of Executive to follow
specific lawful instructions given by the Board of Directors of the
Company or the Company President.
D. EFFECT OF TERMINATION. If termination of the Employment
Term is due to the death of Executive, Executive's estate or legal
representative shall be paid Executive's then remaining, unpaid Base
Salary (as defined in Section 4.a. above) through the end of the
Employment Term, payable in monthly installments commencing immediately
upon the death of Executive, less applicable deductions required by
law. Otherwise, following the Employment Term, except for the payment
of any earned but unpaid Base Salary and Executive's opportunity to
obtain continuation medical coverage as allowed by and pursuant to
COBRA, Executive's rights to his regular salary and benefits with the
Company shall cease, and Executive shall not be entitled to receive any
additional severance, wages, compensation, commissions, bonuses,
incentive compensation, and/or benefits of any kind
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from the Company, except that Executive shall not forfeit any vested
401(k), SERP or LTIP benefits with the Company, if any.
E. STOCK OPTIONS AND RESTRICTED STOCK. In exchange for the
release set forth in Section 7 below and the other terms and conditions
of this Agreement, the Company agrees that upon Executive's upcoming
separation from employment effective September 15, 2000, following the
Effective Date of this Agreement (as defined in Section 13 below):
(i) All outstanding, non-lapsed options to
purchase the Company's stock granted to
Executive under the Company's 1995
Comprehensive Stock Option Plan, and, except
as provided in (ii) following, outstanding,
non-lapsed options to purchase the Company's
stock under the Company's Omnibus Stock
Compensation Plan which were granted as part
of the Company's Annual Incentive Program
Bonus and the LTIP for all measurement and
performance periods ending before January 1,
2000, may be exercised by Executive within
ninety (90) days following the Employment
Term;
(ii) Outstanding, nonlapsed options to purchase
the Company's stock under the Company's
Omnibus Stock Compensation Plan which were
granted as part of the Company's Annual
Incentive Program Bonus and the LTIP for all
measurement and performance periods ending
after December 31, 1999, may be exercised by
Executive under the terms and conditions
applicable for such options and as provided
in the grant documents; and
(iii) All restrictions on shares of Company's
stock granted to Executive under the
Company's Restricted Stock Award Program and
the Company's Omnibus Stock Compensation
Plan, including all restricted shares
granted at any time as part of the Company's
Annual Incentive Program Bonus and the LTIP,
shall lapse.
7. RELEASE. In exchange for the Company's agreement to continue to
employ Executive pursuant to the terms outlined in this Agreement, the stock and
stock option vesting and payment terms set forth in Section 4.e. above, and the
other consideration to Executive set forth in this Agreement, Executive hereby
agrees to release and discharge the Company, as well as its officers, directors,
shareholders, employees, agents, successors and assigns, of and from any and all
claims, actions, damages or demands of any kind whatsoever, whenever or wherever
they arose, including but not limited to any claims that Executive has, may have
or may have had at the time of or prior to his execution of this Agreement
arising out of or related to Executive's entering into this Agreement,
Executive's past employment and transition as Senior Vice President of the
Company, Executive's planned early retirement from the Company, any claims
arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act, 29 U.S.C. 621, et seq., the Americans with Disabilities Act,
the Family and Medical Leave Act, the North Carolina Equal Employment Practices
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Act, and any and all other state or federal claims, whether under tort or
contract, or under statute or otherwise. Executive further agrees not to file,
institute or pursue any lawsuit, claim or administrative action against such
entities and individuals relating to those claims. It is also expressly
understood that this release is and shall continue to be enforceable regardless
of whether there is a subsequent dispute between the Parties concerning any
alleged breach of this Agreement.
8. AGREEMENT CONFIDENTIALITY. The Parties agree that the terms of this
Agreement shall remain confidential. The Parties, however, agree that: (a) the
Company may disclose the terms of this Agreement to officers, directors and
management level employees of the Company, to professionals representing it, to
its insurance agents and carriers, and to affiliates and employees of the same
with a need to know or in order to give effect to this Agreement; and (b)
Executive may disclose the terms of this Agreement to his spouse, children,
accountant and attorney; provided that such third parties comply with the
confidentiality requirements set forth above. In addition, the Parties agree
that they are permitted to disclose the terms of this Agreement to the IRS and
the North Carolina Department of Revenue, if necessary, and as otherwise
required by law. The Parties further agree that the Company may also disclose
the terms of this Agreement in its proxy statements or other public securities
filings as required by law.
9. ADDITIONAL ONGOING OBLIGATIONS. Executive hereby acknowledges and
agrees that he will honor all confidentiality, non-compete, return of records,
and similar post-employment obligations previously agreed to by the Parties
during his employment with the Company, including but not limited to the terms
of Section II and III of his Change in Control Agreement attached as Exhibit A,
and that such obligations shall continue to remain in full force and effect.
Executive also acknowledges and agrees that any breach by him of those
post-employment obligations, including but not limited to the terms of Sections
II and III of his Change in Control Agreement attached as Exhibit A, shall be
deemed to be a breach by Executive of this Agreement.
10. BREACH. Executive agrees to submit to the jurisdiction of the
courts of North Carolina and agrees that, in the event of any breach or
threatened breach of Section 9 of this Agreement by Executive, the Company shall
be entitled to an injunction, without bond, restraining such breach. In
addition, Executive and the Company agree that the prevailing party in any legal
action to enforce the terms of this Agreement, including but not limited to
Section 9, shall be entitled to costs and attorneys' fees relating to any such
proceeding, but nothing herein shall be construed as prohibiting the Parties
from pursuing other remedies available to them for any breach or threatened
breach.
11. ACKNOWLEDGMENT BY EXECUTIVE. The Company specifically advises
Executive to consult a lawyer before signing this Agreement concerning the terms
of this Agreement and his rights under the Age Discrimination in Employment Act,
29 U.S.C. 621 et seq. Executive acknowledges that he has carefully read this
Agreement, that he knows and understands the contents of this Agreement, that he
has had ample opportunity to review the terms of this Agreement, that he is
under no pressure to execute this Agreement, that he has consulted with or had
the opportunity to consult with a lawyer regarding this Agreement, and that he
executes this Agreement of his own free will.
12. WAITING PERIOD. Executive hereby acknowledges and understands that
after receiving this Agreement from the Company, he shall have at least
twenty-one (21) days to consider signing
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this Agreement, and is further aware of his right to consult with an attorney
prior to signing this Agreement. If Executive elects not to take twenty-one (21)
days to sign this Agreement, Executive acknowledges that the period of time used
by him prior to signing this Agreement was ample time to consider and review
this Agreement, it being expressly understood that the Company is imposing no
requirement or duress on Executive to take less than twenty-one (21) days to
consider signing this Agreement. If Executive does not sign this Agreement
within twenty-one (21) days of presentation by the Company, he further
acknowledges that the Company has the option to withdraw its offers set forth in
this Agreement.
13. REVOCATION RIGHTS. Executive acknowledges and understands that he
shall have seven (7) days from the date this Agreement is signed by him to
revoke this Agreement by advising the Company in writing of the revocation. If
the Agreement is not revoked within seven (7) days from the signing of this
Agreement by Executive, this Agreement shall become effective and enforceable as
to all Parties on the eighth day following the signing of this Agreement by all
Parties (the "Effective Date").
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors,
assigns, heirs and personal representatives; provided, however, that Executive
may not assign any of his rights, title or interest in this Agreement. Executive
further acknowledges and agrees that in the event of the transfer and/or
assignment of this Agreement to a successor or assignee of the Company, this
Agreement shall remain valid and be fully enforceable by such entity.
15. APPLICABLE LAW. The Parties agree that this Agreement shall be
construed in accordance with the laws of the State of North Carolina.
16. DISSOLUTION OR MERGER. In the event that the Company consolidates
or merges into or with, or transfers all or substantially all of its assets to,
another entity and such other entity assumes this Agreement, the term "Company"
as used herein shall mean such other entity, and the Parties agree that this
Agreement shall continue in full force and effect without any further action on
the part of either the Company, its successor or assign, or Executive.
17. WAIVER OF BREACH. No waiver of any breach of this Agreement shall
operate or be construed as a waiver of any subsequent breach by any party. No
waiver shall be valid unless in writing and signed by the party waiving any
particular provision.
18. SEVERABILITY. The Parties understand and agree that every provision
of this Agreement is severable from each other provision of this Agreement.
Thus, the Parties agree that if any part of the covenants or provisions
contained in this Agreement is determined by a court of competent jurisdiction
or by any arbitration panel to which a dispute is submitted to be invalid,
illegal or incapable of being enforced, then such covenant or provision, with
such modification as shall be required in order to render such covenant or
provision not invalid, illegal or incapable of being enforced, shall remain in
full force and effect, and all other covenants and provisions contained in this
Agreement shall, nevertheless, remain in full force and effect to the fullest
extent permissible by law. The Parties further agree that, if any court or panel
makes such a determination, such court or panel
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shall have the power to reduce the duration, scope and/or area of such
provisions and/or delete specific words and phrases by "blue penciling" and, in
its reduced or blue penciled form, such provisions shall then be enforceable as
allowed by law.
19. COUNTERPARTS. This Agreement may be executed in duplicate
counterparts, each of which shall be deemed an original and all of which shall
constitute but one and the same instrument.
20. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the Parties pertaining to the subject matter contained herein and
supersedes any and all prior and contemporaneous agreements, representations and
understandings of the Parties, including but not limited to Executive's
September 10, 1998 Employment Agreement with the Company and CT Global
Telecommunications, Inc. In addition, the Parties agree that nothing in this
Agreement shall impact or have any effect on any agreements or understandings
Executive has or may have had with Maxcom Telecomunicaciones, S.A. de C. V. or
Amaritel. Moreover, this Agreement shall not be modified or amended unless
executed in writing by each of the Parties. Notwithstanding the foregoing,
nothing contained herein shall prevent or restrain in any manner the Company
from instituting an action or claim in court, or such other forum as may be
appropriate, to enforce the terms of the post-employment confidentiality
obligations of Executive set forth and/or referenced in this Agreement or any
similar agreement relating to the Company's confidential or proprietary business
information or trade secrets.
IN WITNESS WHEREOF, the undersigned hereto set their hands and seals as
of the dates set forth below.
Executed and presented for consideration to Executive by the Company,
this the ____ day of __________, 2000.
CT COMMUNICATIONS, INC.
By:________________________________
President
Accepted and signed by Executive, this the ____ day of ___________,
2000.
________________________________________(SEAL)
Xxxxxx X. Xxxxxx
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