EXHIBIT 1(d)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 11th day
of December, 1996 by and between BTS ACQUISITION CORP., a Delaware corporation
having its principal offices at 0000 Xxxx Xxxx Xxxxxxx, Xxxxx 0000, Xxxxxxxx,
Xxxxxxxx 00000 (the "Company"), and XXXXXX XXXXXXX, an individual residing at
0000 Xxxx Xxxxx, Xxxxx Xxxxx, XX 00000 (the "Employee" or "Xxxxxxx").
W I T N E S S E T H :
WHEREAS, the Employee is presently a senior executive officer and
principal stockholder of Broadcast Tower Sites, Inc. ("BTS") and has extensive
knowledge with respect to the business of BTS;
WHEREAS, BTS has entered into an agreement and plan of merger (the "Merger
Agreement") with American United Global, Inc. ("AUGI") and the Company, which is
a wholly-owned subsidiary of AUGI, pursuant to which the Company and BTS will
merge (the "Merger") and the Company will be the surviving corporation of such
Merger;
WHEREAS, the Company and AUGI desire that the Company have access to the
services of the Employee after the Merger is consummated;
WHEREAS, the Employee is willing and able to render his services to the
Company on the terms and conditions of this Agreement; and
WHEREAS, it is understood that this Agreement shall become effective as of
December 10, 1996 (the "Effective Date");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and intending to be legally bound thereby, the parties hereby
agree as follows:
1. Nature of Employment.
(a) Subject to the terms and conditions of this Agreement, the
Company shall, throughout the term of this Agreement, retain the Employee, and
the Employee shall render services to the Company, in the capacity and with the
title of Vice President and Chief Financial Officer, and such additional titles
as may be assigned to the Employee from time to time by the Board of Directors
of the Company (the "Board"), which titles the Employee may be willing to
accept. In such capacity, the Employee shall have and exercise responsibility
for overseeing
and actively participating in all aspects of the Company's business throughout
the world, together with such other similar or related duties customarily
afforded a Chief Financial Officer as may be assigned to the Employee from time
to time by the Board.
(b) Throughout the period of his employment hereunder, the Employee
shall: (i) devote his full business time, attention, knowledge and skills,
faithfully, diligently and to the best of his ability, to the active performance
of his duties and responsibilities hereunder on behalf of the Company; (ii)
observe and carry out such rules, regulations, policies, directions and
restrictions as may be established from time to time by the Board, including but
not limited to the standard policies and procedures of the Company as in effect
from time to time; and (iii) do such traveling at the Company's expense as may
reasonably be required in connection with the performance of such duties and
responsibilities; provided, however, that the Employee shall not be assigned to
regular duties that would reasonably require him to relocate his permanent
residence from that first set forth above. The Employee may engage in
charitable, educational, religious, civic and similar types of activities (all
of which shall be deemed to benefit the Company), speaking engagements,
membership on the board of directors of other organizations, and similar
activities to the extent that such activities do not inhibit or prohibit the
performance of his duties hereunder or inhibit or conflict in any material way
with the business of the Company.
2. Term of Employment.
(a) Subject to prior termination in accordance with Section 2(b)
below, the term of this Agreement and the Employee's employment hereunder shall
commence as of the Effective Date and shall continue through November 30, 2000,
and shall thereafter automatically renew (except to the extent otherwise
provided in this Agreement) for additional terms of one (1) year each unless
either party gives written notice of termination to the other party not less
than ninety (90) days prior to the end of any term (in which event this
Agreement shall terminate effective as of the close of such term), as the same
may be renewed (the "Term").
(b) This Agreement may be terminated:
(i) upon mutual written agreement of the Company and the
Employee;
(ii) at the option of the Employee, upon thirty (30) days'
prior written notice to the Company, in the event that (A) the Company shall (1)
fail to make any payment to the Employee required to be made under the terms of
this Agreement within thirty (30) days after payment is due, or (2) fail to
perform any other material covenant or agreement to be performed by it hereunder
(including the failure to re-appoint or re-elect Employee to the offices
described in Section 1(a) of this Agreement or other material change in the
duties of the Employee which reduces the scope or importance of such position)
or take any action prohibited by this Agreement, and fail to cure or remedy same
within thirty (30) days after written notice thereof to the Company; provided,
however, that if any periodic salary payment is not paid within ten (10) days of
its due date, the Employee shall only be required to provide fifteen (15)
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days prior written notice of termination; or (B) the Company is declared
insolvent, liquidates, dissolves or discontinues the Company Business (as
hereinafter defined).
(iii) at the option of the Company, upon written notice to the
Employee, "for cause" (as hereinafter defined);
(iv) at the option of the Company in the event of the
"permanent disability" (as hereinafter defined) of the Employee; or
(v) upon the death of the Employee, or as a result of the
voluntary resignation by the Employee for any reason other than as specified in
Section 2(b)(ii) above.
(c) As used herein, the term "for cause" shall mean and be limited
to:
(i) any breach of any of the material covenants and agreements
of the Employee (A) contained in this Agreement, (B) contained in
the Non-Competition Agreement among the Company, AUGI and the
Employee, dated of even date herewith, (C) contained in the
Registration Rights Agreement between the Employee, certain other
persons and AUGI, dated of even date herewith, or (D) contained in
Section 5 below, which, in any case, is not corrected in all
material respects (if so correctable) within thirty (30) days after
written notice of same from the Company to the Employee;
(ii) any material breach by the Employee of his fiduciary
duties and obligations to the Company which is not corrected in all
material respects (if so correctable) within thirty (30) days after
written notice of same from the Company to the Employee;
(iii) the habitual (meaning more than two (2) breaches of the
same covenant or agreement) and material breach by the Employee of a
material provision of this Agreement (regardless of any prior cure
thereof, but provided that Employee shall have received the notice
and opportunity to cure provided by clause (i) above); or
(iv) conduct constituting fraud or embezzlement or gross
dishonesty by Employee in connection with the performance of his
duties under this Agreement, or a formal charge or indictment of
Employee for or conviction of Employee of a felony or, if it shall
materially and adversely damage or bring into disrepute the
business, reputation or goodwill of the Employer, any crime
involving moral turpitude.
The notice pursuant to clause (i) above shall specify with particularity
the covenant or agreement alleged to have been breached by Employee and action
necessary to be taken by Employee to cure the breach to the satisfaction of the
Company. Termination for cause pursuant
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to clauses (ii), (iii) or (iv) above shall be effective upon delivery of written
notice to Employee specifying the covenants or agreements alleged to have been
breached by Employee.
(d) As used herein, the term "permanent disability" shall mean, and
be limited to, any physical or mental illness, disability or impairment that
prevents the Employee from continuing the performance of his normal duties and
responsibilities hereunder for a period in excess of four (4) consecutive months
or one hundred eighty (180) non-consecutive days within any period of three
hundred sixty five (365) working days. For purposes of determining whether a
"permanent disability" has occurred under this Agreement, the written
determination thereof by two (2) qualified practicing physicians selected and
paid for by the Company (and reasonably acceptable to the Employee) shall be
conclusive.
(e) Upon any termination of this Agreement as hereinabove provided,
the Employee (or his estate or legal representatives, as the case may be) shall
be entitled to receive any and all earned but unpaid Base Salary (as defined
hereby) prorated through the effective date of termination, and any other
amounts and benefits then accrued or due and payable to the Employee hereunder;
provided, that the Employee's participation in any benefit or welfare plans of
the Company (including, without limitation, the Stock Options described below
and any profit-sharing plans) shall terminate upon the effective date of
termination of employment except to the extent otherwise required by law or
provided under the express terms of the applicable plan. All such payments shall
be made on the next applicable payment date therefor (as provided in Section 3
below) following the effective date of termination. Except when termination is
(x) by the Employee pursuant to Section 2(b)(ii) above, or (y) by the Company
other than "for cause" (as defined in Section 2(c) hereof (any termination
described in clauses (x) or (y) being sometimes hereinafter referred to as a
"Non-Cause Termination"), the foregoing constitutes all amounts to which the
Employee shall be entitled upon termination of this Agreement. In the case of a
Non-Cause Termination, the amount to which the Employee shall be entitled is not
so limited and shall include the Option Benefit (defined below).
(f) In the event that there shall be a dispute among the parties
hereto as to whether or not a termination shall constitute a Non-Cause
Termination, during the pendency of such dispute the Company will place in
escrow with a third party attorney or financial institution in an interest
bearing escrow account all such periodic Base Salary payments and the value of
the Option Benefit (as hereinafter defined) and fringe benefits which shall be
disbursed to the appropriate party or parties upon the final resolution or
settlement of such dispute from which no appeal can or shall have been taken. As
use herein, the term Option Benefit means all the Option Shares vested pursuant
to Section 3(d)(iii) of this Agreement.
3. Compensation and Benefits.
(a) Base Salary. As compensation for his services to be rendered
hereunder, the Company shall pay to the Employee a base salary at the rates per
annum set forth below (the "Base Salary"), payable in periodic installments in
accordance with the standard payroll practices of the Company in effect from
time to time, but not less than twice each month:
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From the Effective Date through November 30, 1997 $180,000
From December 1, 1997 through November 30, 1998 $200,000
From December 1, 1998 through November 30, 1999 $225,000
From December 1, 1999 through November 30, 2000 $250,000;
provided, that the contemplated increase for the period commencing December 1,
1999 is expressly made subject to the Company achieving its "1999 Target Income"
(described below).
(b) Fringe Benefits. The Company shall also make available to the
Employee, throughout the period of his employment hereunder, such benefits and
perquisites as are generally provided by the Company to its other senior
management employees (which benefits shall, in the aggregate, be at least as
generous as those supplied by AUGI to the senior executive officers of its
subsidiaries other than the Company), including but not limited to eligibility
for participation in any group life, health, dental, disability or accident
insurance, pension plan, 401(k) plan, profit-sharing plan, or other such benefit
plan or policy, if any, which may presently be in effect or which may hereafter
be adopted by the Company for the benefit of its employees generally; provided,
however, that, except as specified on Exhibit "A" annexed hereto, nothing herein
contained may be deemed to require the Company to adopt or maintain any
particular plan or policy; and provided, further, that the Company shall not be
obligated to permit the Employee to participate in any stock option plans it may
provide to its employees from time to time, other than the stock option plan
established for the Employee pursuant to this Agreement and described below or
established pursuant to the Merger Agreement. Participation in such benefit
plans may be subject to standard waiting periods following the commencement of
full-time employment. Notwithstanding the foregoing, throughout the term of this
Agreement, the Employee shall be entitled to receive the minimum fringe benefits
listed on Exhibit "A" annexed hereto and made a part hereof.
(c) Expenses. Throughout the period of the Employee's employment
hereunder, the Company shall also reimburse the Employee, reasonably promptly
after presentment by the Employee to the Company of appropriate receipts and
vouchers therefor and related information in such form and detail as the Company
may reasonably request, for any reasonable out-of-pocket business expenses
incurred by the Employee in connection with the performance of his duties and
responsibilities hereunder.
(d) Stock Options. The Employee has been awarded options (the
"Options") to purchase a maximum aggregate of Two Hundred and Sixty Thousand
(260,000) shares of the common stock, $0.01 par value per share, (the "AUGI
Common Stock"), of AUGI (the "Option Shares") at an exercise price equal to
$5.25 per share, being the closing price per share of AUGI Common Stock, as
traded on The Nasdaq National Market on October 7, 1996, the day such Options
were approved by the Board of Directors of AUGI (subject to adjustment for
subdivisions or splits, combinations, or reclassifications of the AUGI common
stock); provided, however, that all Options awarded hereunder are subject to the
terms and conditions hereinafter set forth including, without limitation, the
forfeiture provisions set forth below.
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(i) Term of Options. The Options shall have a term expiring on
a date which shall be the earlier to occur of: (x) five (5) years from the
"vesting" of the last to vest of the Options, as hereinafter described, or (y)
November 30, 2005 (the "Option Expiration Date").
(ii) Financial Performance. Except as provided in Section
3(e)(iii) below, the Options will only be exercisable, and shall vest only upon
the Company's achieving the following financial results:
(A) In the event that the "Pre-Tax Income" (as
hereinafter defined) of the Company for the period commencing
as of December 10, 1996 (the "Effective Date") and ending
November 30, 1997 (the "1997 Measuring Period") shall equal or
exceed $2.0 million (the "1997 Target Income"), a maximum of
65,000 Option Shares may be immediately exercised. In the
event that the actual Pre-Tax Income for the 1997 Measuring
Period shall be less than $2.0 million, then the number of
Option Shares which may be exercised shall be the sum of:
(x) 21,667 Option Shares multiplied by a fraction, the
numerator of which shall be the actual 1997 Pre-Tax
Income and the denominator of which shall be the 1997
Target Income; and
(y) as to the remaining 43,333 Option Shares, if, and
only if, the actual Pre-Tax Income for such Measuring
Period shall be equal to or greater than $0.5 million,
but less than the 1997 Target Income, the remaining
43,333 Option Shares exercisable for the 1997 Measuring
Period shall be pro-rated to the extent of the
percentage of the short-fall below the 1997 Target
Income in the manner described in the example set forth
below. If the actual 1997 Pre-Tax Income is less than
$0.5 million, none of such 43,333 Option Shares may be
exercised pursuant to this subsection (A).
(B) In the event that the "Pre-Tax Income" (as
hereinafter defined) of the Company for the period commencing
as of December 1, 1997 and ending November 30, 1998 (the "1998
Measuring Period") shall equal or exceed $2.5 million (the
"1998 Target Income"), a maximum of 65,000 Option Shares may
be immediately exercised. In the event that the actual Pre-Tax
Income for the 1998 Measuring Period shall be less than $2.5
million, then the number of Option Shares which may be
exercised shall be the sum of:
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(x) 21,667 Option Shares multiplied by a fraction, the
numerator of which shall be the actual 1998 Pre-Tax
Income and the denominator of which shall be the 1998
Target Income; and
(y) as to the remaining 43,333 Option Shares, if, and
only if, the actual Pre-Tax Income for such Measuring
Period shall be equal to or greater than $1.0 million,
but less than the 1998 Target Income, the remaining
43,333 Option Shares exercisable for the 1998 Measuring
Period shall be pro-rated to the extent of the
percentage of the short-fall below the 1998 Target
Income in the manner described in the example set forth
below. If the actual 1998 Pre-Tax Income is less than
$1.0 million, none of such 43,333 Option Shares may be
exercised pursuant to this subsection (B).
(C) In the event that the "Pre-Tax Income" (as
hereinafter defined) of the Company for the period commencing
as of December 1, 1998 and ending November 30, 1999 (the "1999
Measuring Period") shall equal or exceed $3.0 million (the
"1999 Target Income"), a maximum of 65,000 Option Shares may
be immediately exercised. In the event that the actual Pre-Tax
Income for the 1999 Measuring Period shall be less than $3.0
million, then the number of Option Shares which may be
exercised shall be the sum of:
(x) 21,667 Option Shares multiplied by a fraction, the
numerator of which shall be the actual 1999 Pre-Tax
Income and the denominator of which shall be the 1999
Target Income; and
(y) as to the remaining 43,333 Option Shares, if, and
only if, the actual Pre-Tax Income for such Measuring
Period shall be equal to or greater than $1.5 million,
but less than the 1999 Target Income, the remaining
43,333 Option Shares exercisable for the 1999 Measuring
Period shall be pro-rated to the extent of the
percentage of the short-fall below the 1999 Target
Income in the manner described in the example set forth
below. If the actual 1999 Pre-Tax Income is less than
$1.5 million, none of such 43,333 Option Shares may be
exercised pursuant to this subsection (C).
(D) In the event that the "Pre-Tax Income" (as
hereinafter defined) of the Company for the period commencing
as of December 1, 1999 and ending November 30, 2000 (the "2000
Measuring Period") shall equal or exceed $3.5 million (the
"2000 Target Income"), a maximum of 65,000 Option Shares may
be immediately exercised. In the event that the actual
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Pre-Tax Income for the 2000 Measuring Period shall be less
than $3.5 million, then the number of Option Shares which may
be exercised shall be the sum of:
(x) 21,667 Option Shares multiplied by a fraction, the
numerator of which shall be the actual 2000 Pre-Tax
Income and the denominator of which shall be the 2000
Target Income; and
(y) as to the remaining 43,333 Option Shares, if, and
only if, the actual Pre-Tax Income for such Measuring
Period shall be equal to or greater than $2.0 million,
but less than the 2000 Target Income, the remaining
43,333 Option Shares exercisable for the 2000 Measuring
Period shall be pro-rated to the extent of the
percentage of the short-fall below the 1999 Target
Income in the manner described in the example set forth
below. If the actual 2000 Pre-Tax Income is less than
$2.0 million, none of such 43,333 Option Shares may be
exercised pursuant to this subsection (D).
(E) In the event that the accumulated Pre-Tax Income for
all four (4) Measuring Periods referred to in clauses (A)
through (D) above shall equal or exceed $11.0 million, all of
the remaining 260,000 Option Shares shall be immediately and
fully exercisable, irrespective of the actual Pre-Tax Income
earned in any or all of the 1997 Measuring Period, 1998
Measuring Period or 1999 Measuring Period; provided, that
unless the Board of Directors of the Company and AUGI shall
(i) effect an expansion program not approved by the Employee,
or (ii) violate the provisions of Section 7.4(c) of the Merger
Agreement, either of which shall reduce anticipated Pre-Tax
Income of the Company in the 2000 Measuring Period, the
provisions of this clause (E) shall only be applicable if the
actual Pre-Tax Income in the 2000 Measuring Period shall equal
or exceed $2.0 million.
Example: As an example of the application of the pro-ration
provisions as to the 43,333 Option Shares contained in subclauses
(y) of each of clauses (A) through (D) above, the 43,333 Option
Shares shall be multiplied by a fraction: (x) the numerator of which
shall be the amount by which the actual Pre-Tax Income earned in a
Measuring Year shall exceed the minimum base Pre-Tax Income required
in such Measuring Year, and (y) the denominator of which shall be
the difference between the Target Income for such Measuring Year and
the minimum base Pre-Tax Income in such Measuring Year. Accordingly,
if the Company's actual Pre-Tax Income in the 1997 Measuring Year is
$1.0 million, 43,333 Option Shares shall be multiplied by 1/3, the
fraction resulting from dividing $500,000 ($1.0 million actual
Pre-Tax Income less the $500,000
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minimum base Pre-Tax Income for the 1997 Measuring Year) by
$1,500,000 (the $2.0 million Target Pre-Tax Income less the $500,000
minimum base Pre-Tax Income).
(iii) Immediate Vesting on Certain Events. All Options shall
immediately vest if:
(A) prior to November 30, 2000, AUGI shall effect a sale
of all or substantially all of the shares of the capital stock
or assets of the Company to any unaffiliated third party,
whether by merger, consolidation, stock sale, asset sale or
like transaction,
(B) prior to November 30, 2000, the Company consummates
an initial public offering of its securities,
(C) the Company materially violates (and fails to
promptly cure such material violation) its covenants and
agreements contained in Section 7.4(c) of the Merger
Agreement, or
(D) the Employee's employment pursuant to this Agreement
is terminated by the Company or terminates for reasons other
than "for cause" (as defined in this Agreement) or pursuant to
Section 2(b)(i) of this Agreement.
(iv) Termination of Options. Options not previously vested and
immediately exercisable pursuant to their terms shall immediately terminate:
(A) effective as of December 1, 2000, with respect to
any Options that shall not have vested in accordance with the
provisions of Section 3(d)(ii) above; or
(B) if the Employee's employment with the Company shall
terminate "for cause" (as defined herein), or
(C) if the Employee shall resign or otherwise
voluntarily terminate (except arising from constructive
termination) his full-time employment with the Company prior
to November 30, 2000 for any reason other than a breach by the
Company of its obligations to the Employee hereunder.
(v) Definition. As used herein, the term "Pre-Tax Income"
shall mean the net income of the Company after deduction of all expenses paid or
accrued for the appropriate Measuring Period in question in accordance with
generally accepted accounting principles, but before application of all federal,
state and local income taxes for such Measuring
9
Period, all as determined by AUGI subject only to the right of the Employee to
engage his own accountant or financial advisor to review the calculations of
such Pre-Tax Income for the applicable Measuring Period at the Employee's
expense. Disputes shall be resolved in accordance with Section 10(f) of this
Agreement. Notwithstanding the foregoing, the term "Pre-Tax Income" shall be
calculated before deduction of all legal fees and disbursements of counsel to
the Employee paid by the Company, but after deduction of (i) all interest paid
or accrued on money borrowed by the Company from any unaffiliated third party,
and (ii) all interest or dividends paid, accrued or payable with respect to any
cash advances made to the Company by AUGI (whether evidenced by notes or
preferred stock), subject to reduction pursuant to the provisions of Section
7.5(e) of the Merger Agreement.
(vi) Provisions Governing Registration. The Option Shares are
subject to the provisions governing registration thereof, set forth in the
Registration Rights Agreement between the parties.
(vii) Assignment of Options. The Options may not be
transferred, assigned or otherwise disposed of by the Employee unless and until
they have become vested and are then immediately exercisable into Option Shares;
provided, that the Employee shall have the right to assign all or any portion of
his Options to any member of his family; provided, further, that any such
permitted assignee shall execute a joinder or similar agreement with AUGI and
the Company agreeing to be bound by all of the terms and conditions of this
Section 3(d).
(viii) Reservation of Option Shares; Registration of Options.
AUGI hereby covenants and agrees to:
(A) take all steps necessary and appropriate to keep a
sufficient number of Option Shares reserved for issuance upon
exercise of the Options; and
(B) to the extent that the same have vested and are then
currently exercisable in accordance with this Agreement, AUGI
shall, at its sole cost and expense, include the Options and
underlying Option Shares in any one or more Form S-8
Registration Statements filed by AUGI with the Securities and
Exchange Commission to register stock options for any
executive officers, directors or key employees of AUGI or any
of its subsidiaries, including the Company.
(ix) Cashless Exercise. The Employee shall have the right to
exercise his Options upon vesting pursuant to a "cashless" exercise. Pursuant to
such cashless exercise, vested Options shall, at the request of the Employee, be
deemed to have been exercised by the Employee, to the extent of such number of
Option Shares resulting from dividing the aggregate amount by which all such
vested Options are then "in the money" by the closing price of the AUGI's Common
Stock, as traded on the Nasdaq National Market (or other national securities
exchange). In such event, the number of vested Options resulting from such
calculation shall
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be deemed exercised in full by the Employee, all such vested Options shall be
cancelled, and the underlying Option Shares resulting from such "cashless"
exercise may be sold without payment to the Company or AUGI.
Example: By way of example, if 100,000 Options shall have
vested at an exercise price of $7.50 per share and the closing price of AUGI's
publicly traded Common Stock shall be $15.00 per share: (A) the 100,000 Options
shall be deemed to be "in the money" to the extent of $750,000 (100,000
multiplied by the excess of the $15.00 closing price over the $7.50 exercise
price), and (B) the Employee shall, upon exercise of all 100,000 vested Options,
receive 50,000 shares of AUGI Common Stock, as a result of dividing $750,000 by
the $15.00 per share closing price.
4. Vacation.
The Employee shall be entitled to take, from time to time, normal
and reasonable vacations with pay, consistent with the Company's standard
policies and procedures in effect from time to time (provided that such policies
and procedures shall be no less favorable than those set forth on Exhibit "A"
annexed hereto), at such times as shall be mutually convenient to the Employee
and the Company, and so as not to interfere unduly with the conduct of the
business of the Company.
5. Restrictive Covenants.
(a) The Employee hereby acknowledges and agrees that (i) the
business contacts, customers, suppliers, technology, product designs and
specifications, know-how, trade secrets, marketing techniques, promotional
methods and other aspects of the business of BTS have been of value to BTS and
will be of value to the Company, and have provided BTS and will hereafter
provide the Company with substantial competitive advantage in the operation of
its business, and (ii) the Employee has and will continue to have detailed
knowledge and possesses and will possess confidential information concerning the
business and operations of BTS and the Company.
(b) Unless otherwise approved in writing by AUGI or its Chairman of
the Board after full disclosure by the Employee to AUGI's Board of Directors of
all relevant facts and circumstances, the Employee shall not, directly or
indirectly, for the Employee or through or on behalf of any other person or
entity, at any time during the "Restrictive Period" (as defined in clause (ii)
below):
(i) divulge, transmit or otherwise disclose or cause to be
divulged, transmitted or otherwise disclosed, any clients or customer lists,
technology, know-how, trade secrets, marketing techniques, contracts or other
confidential or proprietary information of the Company of whatever nature,
whether now existing or hereafter created or developed (provided, however, that
for purposes hereof, information shall not be considered to be confidential or
proprietary if (A) the information, and its relevance in the applicable
instance, is a matter of
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common knowledge or public record, (B) the information, and its relevance in the
applicable instance, is generally known in the industry, or (C) the information
is disclosed to Employee after termination of his employment by another person
not prohibited from making such disclosure, (D) the information is required to
be disclosed by law pursuant to court order or subpoena, or (E) the Employee can
demonstrate that such information, and its relevance in the particular instance,
was already known to the recipient thereof other than by reason of any breach of
any obligation under this Agreement or any other confidentiality or
non-disclosure agreement); and/or
(ii) unless the Employee's employment with the Company shall
be terminated by reason of a Non-Cause Termination, at any time during the
period commencing on the date hereof through and including the date which shall
be three (3) years following the voluntary resignation by the Employee of his
employment with the Company or his termination by the Company "for cause", but
in no event longer than one (1) year following the end of the Term (the
"Restrictive Period"), invest, carry on, engage or become involved, either as an
employee, agent, advisor, officer, director, stockholder (excluding ownership of
not more than 5% of the outstanding shares of a publicly held corporation if
such ownership does not involve managerial or operational responsibility),
manager, partner, joint venturer, participant or consultant in any business
enterprise (other than AUGI (so long as it is an affiliate of the Company), the
Company or any of their respective subsidiaries, affiliates, successors or
assigns) which derives any material revenues from the offer or sale in the
United States from time to time during the Restrictive Period of all aspects of
providing site acquisition, zoning, architectural and engineering services to
the wireless telecommunications industry (the "Company Business"), or which
engages in any other business substantially similar to and directly competitive
with the Company Business.
(c) The Employee and the Company hereby acknowledge and agree that,
in the event of any breach by the Employee, directly or indirectly, of the
foregoing restrictive covenants, it will be difficult to ascertain the precise
amount of damages that may be suffered by the Company by reason of such breach;
and accordingly, the parties hereby agree that, as liquidated damages (and not
as a penalty) in respect of any such breach, the breaching party or parties
shall be required to pay to the Company, on demand from time to time, cash
amounts equal to any and all gross revenues derived by the Employee or his
affiliate, directly or indirectly, from any and all violative acts or
activities. The parties hereby agree that the foregoing constitutes a fair and
reasonable estimate of the actual damages that might be suffered by reason of
any breach of this Section 5 by the Employee, and the parties hereby agree to
such liquidated damages in lieu of any and all other measures of damages that
might be asserted in respect of any subject breach.
(d) The Employee and the Company hereby further acknowledge and
agree that any breach by the Employee, directly or indirectly, of the foregoing
restrictive covenants will cause the Company irreparable injury for which there
is no adequate remedy at law. Accordingly, the Employee expressly agrees that,
in the event of any such breach or any threatened breach hereunder by the
Employee, directly or indirectly, the Company shall be
12
entitled, in addition to the liquidated damages provided for in Section 5(c)
above), to seek and obtain injunctive and/or other equitable relief to require
specific performance of or prevent, restrain and/or enjoin a breach under the
provisions of this Section 5, in any such case without the necessity of proving
actual damages or posting bond.
(e) In the event of any dispute under or arising out of this Section
5, the prevailing party in such dispute shall be entitled to recover from the
non-prevailing party or parties, in addition to any damages and/or other relief
that may be awarded, its reasonable costs and expenses (including reasonable
attorneys' fees) incurred in connection with prosecuting or defending the
subject dispute.
(f) Upon the termination of the Employee's employment with the
Company, the Employee shall immediately surrender and deliver to the Company all
notes, drawings, diagrams, models, prototypes, lists, books, records, documents
and data of every kind or description, in whatever written or other media
(including, without limitation, electronic, tape, or other form of storage)
relating to or connected with the business contacts, client or customer lists,
technology, know-how, trade secrets, marketing techniques, contracts or other
confidential or proprietary information of the Company, its business, its
properties, or its customers referred to in Section 5(b)(i) above.
6. Inventions; Intellectual Property.
(a) The Employee shall promptly communicate to the Company and
disclose to the Company in such form as the Company requests from time to time,
all drawings, sketches, models, records, information, details and data (in
whatever media the same may be created or recorded including, without
limitation, print, tape, electronic, or otherwise) pertaining to all ideas,
processes, trademarks, inventions, improvements, discoveries and improvements,
product designs and specifications, and other intellectual property, whether
patented or unpatented, and copyrightable or uncopyrightable, made, conceived,
developed, acquired or implemented by the Employee, solely or jointly, during
the term of this Agreement (the "Development Term"), whether or not conceived
during regular working hours through the use of Company time, material or
facilities or otherwise (each of the foregoing hereinafter referred to,
individually and collectively, as a "Development"). The Employee hereby assigns,
transfers, conveys and sells to the Company all right, title and interest in and
to all Developments, whether now existing or hereafter existing during the
Development Term, and acknowledges that the same, whether now existing or
hereafter existing during the Development Term, are the sole and exclusive
property of the Company for which the Employee is being adequately compensated
hereunder. At any time and from time to time, upon the request of the Company,
and at its expense, the Employee will execute and deliver to the Company any and
all applications, assignments, instruments, documents and papers, give evidence
and do any and all other acts which, in the opinion of the Company, are or may
be necessary or desirable to document such transfer or to enable the Company to
file and prosecute applications for and to acquire, maintain and enforce any and
all patents, trademark or tradename registrations, copyrights or other rights
under United States, foreign, state or local law with respect to any such
Developments or to
13
obtain any extension, validation, reissue, continuance, division or renewal of
any of the same, in whole or in part, and otherwise to establish, protect and
enforce the Company's rights in and to such intellectual property.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the foregoing Section 6(a) shall only apply and be effective to the
extent permitted under applicable law. In this regard, the provisions of Section
6(a) of this Agreement which provide that the Employee shall assign or offer to
assign any of the Employee's rights in an invention to the Company shall not
apply to any invention for which no equipment, supplies, facility, or trade
secret information of the Company was used and which was developed entirely on
the Employee's own time, unless (a) the invention relates (i) directly to the
business of the Company, or (ii) to the Company's actual or demonstrably
anticipated research or development, or (b) the invention results from any work
performed by the Employee for the Company.
7. Right to Exchange AUGI Securities for Company Common Stock.
(a) In the event that the Board of Directors of the Company and AUGI
shall elect at any time during the term of this Agreement to effect an initial
public offering of securities of the Company pursuant to a registration
statement filed with the Securities and Exchange Commission (an "IPO") or a
merger or consolidation of the Company with or into another publicly traded
corporation or other entity (a "Public Merger"), then and in such event, the
Employee shall have the right and option, but not the obligation (the "Exchange
Option") to exchange (i) all shares of AUGI Merger Stock received by him as
partial merger consideration under the Merger Agreement, and (ii) all Options
granted to him under this Agreement (whether or not then exercisable) and (iii)
all Option Shares issued upon prior exercise of vested Options (collectively,
the "Exchanged AUGI Securities") for that number of shares of Common Stock of
the Company as shall represent eight and one-third (8.333%) percent of the
fully-diluted shares of Common Stock of the Company which are issued and
outstanding (the "Exchanged Company Securities"), before giving effect to the
issuance of any equity type securities in connection with the IPO or any private
placement or bridge financing effected by the Company with any unaffiliated
third party prior to such IPO, or in connection with the Public Merger. The
Employee shall not be assessed any costs or fees associated with the exercise of
the Exchange Option hereunder, all of which shall be borne by AUGI and/or the
Company.
(b) In the event that the Employee shall elect the Exchange Option
provided in Section 7(a) above, Simantov Moskona ("Moskona") and Xxxxx X. Xxxxxx
("Xxxxxx") shall also have the right to receive the same number of Exchanged
Company Securities as the Employee; provided, that in no event shall Xxxxxxx,
Moskona and Xxxxxx have the right to receive in excess of an aggregate of 25% of
the fully-diluted shares of Common Stock of the Company in exchange for all AUGI
Exchanged Securities issued pursuant to Section 3 of the Merger Agreement, a
separate Agreement and Plan of Merger, dated December, __, 1996 between Arcadia
Consulting Services, Inc., Xxxxxx and AUGI, and all Options and underlying
Option Shares provided for in the employment agreements of even date among the
Company and Moskona and Xxxxxx.
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(c) In the event that the Employee shall elect to exercise his
exchange rights pursuant to this Section 7, such election shall be only with
respect to all, and not less than all, of the Exchanged AUGI Securities, unless
otherwise agreed to in writing by AUGI.
8. Non-Assignability.
In light of the unique personal services to be performed by the
Employee hereunder, it is acknowledged and agreed that any purported or
attempted assignment or transfer by the Employee of this Agreement or any of his
duties, responsibilities or obligations hereunder shall be void.
9. Notices.
Any notices, requests, demands or other communications 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 will 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 forth 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 Company shall
simultaneously be sent by first class mail to American United Global, Inc.,
00000 00xx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X.
Xxxxx, Chairman.
10. General.
(a) Neither this Agreement nor any of the terms or conditions hereof
may be waived, amended or modified except by means of a written instrument duly
executed by the party to be charged therewith. Any waiver or amendment shall
only be applicable in the specific instance, and shall not constitute or be
construed as a waiver or amendment in any other or subsequent instance. No
failure or delay on the part of either party in respect of any enforcement of
obligations hereunder shall in any manner affect such party's right to seek or
effect enforcement at any other time or in respect of any other required
performance.
(b) The captions and Section headings used in this Agreement are for
convenience of reference only, and shall not affect the construction or
interpretation of this Agreement or any of the provisions hereof.
(c) This Agreement, and all matters or disputes relating to the
validity, construction, performance or enforcement hereof, shall be governed,
construed and controlled by and under the laws of the State of Delaware
applicable to contracts entered into and performed wholly within Delaware.
15
(d) This Agreement shall be binding upon and shall inure to the sole
and exclusive benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and permitted
assigns, and no other person or entity shall have any right to rely on this
Agreement or to claim or derive any benefit herefrom absent the express written
consent of the party to be charged with such reliance or benefit; provided, that
neither this Agreement nor any rights or obligations hereunder may be assigned
by either party without the express prior written consent of the other party.
(e) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original hereof, but all of which
together shall constitute one and the same instrument.
(f) Except for any legal or judicial proceeding which may be brought
for injunctive and/or any other equitable relief as contemplated by Section 5(d)
above, any dispute involving the interpretation or application of this Agreement
shall be resolved by final and binding arbitration in accordance with the terms,
conditions and procedures set forth in the Merger Agreement.
(g) This Agreement constitutes the sole and entire agreement and
understanding between the parties hereto as to the subject matter hereof, and
supersedes all prior discussions, agreements and understandings of every kind
and nature between them as to such subject matter.
(h) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed modified only
to the extent necessary to render same valid, or not applicable to given
circumstances, or excised from this Agreement, as the situation may require; and
this Agreement shall be construed and enforced as if such provision had been
included herein as so modified in scope or application, or had not been included
herein, as the case may be.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the date first set forth above.
BTS ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxx, Ch.
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
/s/ Xxxxxx Xxxxxxx
---------------------------------------
XXXXXX XXXXXXX
16
Only as to Section 2(f), Section 3(d) and Section 7 of the foregoing Agreement:
AMERICAN UNITED GLOBAL, INC.
By: /s/ Xxxxxx X. Xxxxx, CEO.
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
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