EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made November 12, 1999, by and between TE MERGER
CORPORATION (the "Company"), a Pennsylvania corporation, and XXX X. XXXXXXXXXXX
(the "Employee"), of State College, Centre County, Pennsylvania.
BACKGROUND
Pursuant to an Agreement and Plan of Merger dated November 3, 1999, by and
among Conestoga Enterprises, Inc. ("CEI"), TeleBeam, Incorporated ("TeleBeam")
and the Company, TeleBeam in the near future will be merged with and into the
Company, which will be the surviving corporation. Pursuant to such plan of
merger (the "Plan of Merger"), as of the Effective Date of the merger specified
therein (the "Effective Date"), the corporate name of the Company will become
"TeleBeam, Incorporated". The Employee is currently President and Chief
Executive Officer of TeleBeam and the parties have agreed that he shall be
employed by the Company as of the Effective Date under the terms and provisions
contained in this Agreement.
AGREEMENT
Therefore, each intending to be legally bound hereby, the parties agree as
follows:
1. Employment and Employment Duties. Subject to the consummation of
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the Merger (as defined in the Plan of Merger) and as of the Effective Date,
under the terms and conditions contained in this Agreement, the Company employs
the Employee as President and Chief Executive Officer and the Employee accepts
such employment. The Employee's employment duties shall be those duties,
commensurate with his position, assigned by the Board of Directors of the
Company (the "Board"). The Employee shall report directly to the Board. The
Employee's employment shall be on a full-time basis and he shall not be engaged
or employed in other business activities (whether for pecuniary advantage or
not) during the term of this Agreement, except that the Employee shall be
permitted to serve on the boards of directors of business or charitable
organizations and devote nominal amounts of business time to his relationship
with Sunrise Homes, provided such services do not materially affect the
performance of his duties hereunder. The Employee shall discharge his
employment duties in a diligent and conscientious fashion. The principal
location at which the Employee shall perform his duties hereunder shall be at
TeleBeam's offices in State College, Pennsylvania. The principal location of
the Employee's duties shall not be transferred without the Employee's consent.
2. Term. The Employee's employment hereunder shall be for a period of
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three (3) years, commencing upon the Effective Date. Notwithstanding the
foregoing: (i) the Company may terminate the Employee's employment at any time
(A) upon fifteen (15) days prior written notice for any reason or for no reason,
or (B) without prior notice for cause (as defined below); and (ii) the Employee
may terminate the Employee's employment at any time without prior notice for any
reason or for no reason. For purposes of this Agreement, the Employee's
employment shall be deemed to have been terminated for cause in the event the
Company terminates it as a result of:
(a) the Employee's breach of his confidentiality obligations
specified in Section 5;
(b) the willful failure or refusal by the Employee to perform any
of his material employment duties or his material obligations under this
Agreement which shall not have ceased or been corrected within fifteen (15) days
following a written warning from the Company; or
(c) the commission of any act or the failure to act by the Employee
which constitutes a crime or offense involving money or other property of any of
the CEI Companies (as defined in Section 5) or which constitutes a felony in the
jurisdiction involved.
3. Severance Compensation.
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3.1 General Rule. Unless the provisions of Section 3.2 apply,
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in the event of the termination of the Employee's employment by the Company
other than for cause prior to the expiration of the three (3) year term referred
to in Section 2, the Company shall be obligated to pay to the Employee, within
fifteen (15) days after the date of termination, an amount equal to the greater
of: (i) fifty percent (50%) of the Employee's annual salary determined as of
the date of termination of employment, or (ii) the aggregate salary otherwise
payable to the Employee for the balance of the three (3) year term referred to
in Section 2, determined as of the date of termination of employment.
3.2 Change of Control. If, during the term of this Agreement,
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the Employee's employment with the Company is terminated after a change of
control (as defined below), either by the Employee or by the Company other than
for cause, the Company shall pay to the Employee, within fifteen (15) days of
the date of termination of employment, an amount equal to the greater of: (i)
the amount payable to the Employee as
determined by the application of the provisions of Section 3.1, or (ii) two (2)
times the amount of the Employee's annual salary, determined as of the date of
termination of employment. The Company shall be obligated to make such payment
in lieu of, and not in addition to, the Company's payment obligations under
Section 3.1. For purposes of this Agreement, a change of control shall be deemed
to have occurred in the event of: (i) the acquisition, directly or indirectly,
by any person or entity, or persons or entities acting in concert, whether by
purchase, merger, consolidation or otherwise, of voting power over that number
of voting shares of the capital stock of either the Company or CEI which, when
combined with the existing voting power of such persons or entities, would
enable them to cast fifty percent (50%) or more of the votes which all
shareholders of the Company or CEI, respectively, would be entitled to cast in
the election of directors of either the Company or CEI, or (ii) the sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company to a
transferee other than CEI or a company or entity of which a controlling interest
is owned by CEI.
3.3 Termination for Cause. In the event of the termination of
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the Employee's employment at any time by the Company for cause, the Company
shall have no obligation to pay the Employee any sums following the termination
of his employment.
4. Compensation. As compensation for the performance of his
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employment duties, during the term hereof the Company shall pay or provide to
the Employee the following:
(a) A salary in the annual amount of One Hundred Thirty
Thousand Dollars ($130,000.00), payable in accordance with the Company's normal
payroll practices in effect from time to time. The Employee's salary shall be
reviewed by the Board at the same time and in the same manner as is customary
for the employees of CEI and its subsidiaries and may be increased, in the sole
discretion of the Board, based upon the Employee's satisfactory performance of
his employment duties.
(b) The provision of those fringe benefits which were provided
to the Employee in his position as President and Chief Executive Officer of
TeleBeam as of the Effective Date under plans or insurance policies maintained
by the Company from time to time. Such fringe benefits include four (4) weeks
paid vacation, personal use of a Company automobile, medical health and
disability insurance coverage, inclusion in the Company's 401(k) profit sharing
plan, and reimbursement of business expenses under policies similar to those in
effect with TeleBeam.
(c) Maintenance of a life insurance policy insuring the
Employee's life in accordance with CEI's current policies.
(d) Participation in CEI's Executive Incentive Compensation
Plan and Stock Option Plan.
5. Confidentiality. The Employee acknowledges that he has had, and in
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fulfilling his duties under this Agreement he will have, access to confidential
information regarding the business and financial affairs of the Company, CEI,
and/or the other subsidiaries of CEI (collectively, the "CEI Companies"). The
Employee hereby agrees to hold all such information in the strictest confidence,
to discuss such information only with authorized personnel of the CEI Companies,
and, except as required by law or compelled by legal process, to refrain from
disclosing such information to any other party, both during the term of this
Agreement and after the termination hereof. The provisions of this Section 5
shall not apply to information, which is or becomes generally available to or
known by the public other than as a result of disclosure by the Employee.
6. Covenant Not to Compete. The Employee agrees that, in order to
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protect the legitimate interests and property rights of the Employer and in
consideration of the payment of Fifty Thousand Dollars ($50,000.00) by the
Company to the Employee on the Effective Date, for a period of one (1) year
after the termination of the Employee's employment with the Company (regardless
of the reason for the termination), the Employee shall not:
(a) Engage, directly or indirectly, either as owner, partner,
agent, employee, consultant, member, or shareholder, or otherwise operate,
control, join or participate in, lend money to, or be connected with any
commercial enterprise or business which is engaged within the Territory (as
defined below) in any facet of the telecommunications business carried on by any
of the CEI Companies as of the date of termination of the Employee's employment;
(b) Approach, solicit, contact, or otherwise establish a
business relationship with any customer of any of the CEI Companies or any
prospective customer of any of the CEI Companies with whom any of such companies
has had significant contact on or before the date of termination of the
Employee's employment, for a purpose related to the business carried on by any
of the CEI Companies as of the date of termination of the Employee's employment;
(c) Assist any other person, partnership, corporation, limited
liability company, or other entity in the pursuit of the activities from which
the Employee is prohibited in engaging under the provisions of Subsections (a)
and (b) above; or
(d) Induce by active solicitation any present or future
employees or agents of the Company or the other CEI Companies to directly or
indirectly engage in any competitive business or to terminate their employment
with any of the CEI Companies.
For purposes of this Agreement, the term "Territory" shall mean those
geographical areas encompassed by the State College, Reading, Pottsville,
Sunbury, and Williamsport Basic Trading Areas, as defined by the Federal
Communications Commission for the issuance of personal communication services
licenses. Nothing contained in this Section 6 shall prohibit the Employee from:
(i) investing in and owning securities issued by any publicly-held company which
are traded on any recognized securities exchange or in the over-the-counter
market; or (ii) accepting employment, after termination of his employment with
the Company, with a customer of the Company which is not a significant customer.
7. Equitable Relief. The Employee recognizes and agrees that, in the
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event of a breach or threatened breach of his covenants and obligations
contained in Section 5 and/or Section 6 of this Agreement, the Company will
suffer irreparable harm and damage, that such harm and damage may be extremely
difficult or impossible to quantify, and that therefore the Company shall be
entitled to injunctive relief. Nothing contained herein, however, shall be
construed as precluding the Company from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of damages at
law.
8. Restrictions Excessive. In the event the restrictions imposed by
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the covenant contained in Section 6 are deemed by any court having jurisdiction
to be unreasonable or otherwise unenforceable by reason of their duration,
territory or the scope of the activities prohibited, it is agreed by the parties
that such court may construe and enforce this Agreement by reducing the time
period, territory, or scope of activities to an extent which such court deems to
be reasonable and enforceable.
9. Arbitration. Except as otherwise provided in Section 7 hereof, any
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claim or controversy between the parties arising out of or relating to this
Agreement shall be settled by a single arbitrator in an arbitration held in
Harrisburg, Pennsylvania in accordance with the then-governing commercial rules
of the American Arbitration Association. The judgment of the arbitrator shall
be final and binding on the parties, and may be entered and enforced in any
court of competent jurisdiction.
10. Severability. If any provision or provisions of this Agreement
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shall be deemed to contravene or be invalid under the laws of any jurisdiction
where this Agreement is in force, the parties agree that such contravention
or invalidity shall not invalidate the entire Agreement, but it shall be
construed as not containing the particular provision or provisions held to be
invalid and the rights and obligations of the parties shall be construed and
enforced accordingly.
11. Notices. All notices, consents, waivers or other communications
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which are required or permitted hereunder shall be sufficient if given in
writing and delivered personally, by overnight mail service, by facsimile
transmission (which is confirmed) or by registered or certified mail, return
receipt requested, postage prepaid, as follows (or to such other addressee or
address as shall be set forth in a notice given in the same manner):
If to the Company:
c/o Conestoga Enterprises, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, President
(000) 000-0000 (Fax)
With a required copy to:
Barley, Snyder, Xxxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx
P. O. Xxx 000
Xxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esquire
(000) 000-0000 (Fax)
If to the Employee:
Xxx X. Xxxxxxxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
(000) 000-0000 (Fax)
With a required copy to:
Saul, Ewing, Xxxxxx & Xxxx
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esquire
(000) 000-0000 (Fax)
All such notices shall be deemed to have been given three business days
after mailing if sent by registered or certified mail, one business day after
mailing if sent by overnight courier service or on the date transmitted if sent
by facsimile transmission.
12. Miscellaneous.
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(a) This Agreement shall be construed, interpreted and enforced in
accordance with the laws (but not the law of conflict of laws) of the
Commonwealth of Pennsylvania.
(b) This Agreement and its provisions shall be binding upon and
inure to the benefit of the respective legal representatives, successors, heirs,
and permitted assigns of the parties. The Employee shall not assign any of his
rights nor delegate any of his duties under this Agreement without the prior
written consent of the Company.
(c) This Agreement constitutes the entire Agreement between the
parties and supersedes all prior negotiations, understandings and agreements of
any nature whatsoever, whether oral or written, with respect to the subject
matter hereof. No amendment, waiver or discharge of any provision of this
Agreement shall be effective against any party, unless that party shall have
consented thereto in writing.
(d) The headings to the sections of this Agreement are inserted
only for convenience of reference and are not intended, nor shall they be
construed, to modify, define, limit or expand the intent of the parties as
expressed in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
WITNESS: TE MERGER CORPORATION
____________________________________ By:_________________________________
Xxxxxx X. Xxxxxx, Chairman of the Board
____________________________________ By:__________________________(SEAL)
Xxx X. Xxxxxxxxxxx
INTENDING TO BE LEGALLY BOUND HEREBY, CONESTOGA ENTERPRISES, INC. hereby
guarantees the performance of all of the obligations of and payment of all sums
due from TE Merger Corporation under the foregoing Employment Agreement.
CONESTOGA ENTERPRISES, INC.
By:_________________________________
President
