Exhibit 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
1st day of August, 1996 by and between Mobile Telecommunication Technologies
Corp., a Delaware corporation (hereinafter referred to as the "Company"), and
Xxxx X. Xxxxxx (hereinafter referred to as "Executive").
WHEREAS, the Company is desirous of retaining Executive as President and
Chief Executive Officer of the Company; and
WHEREAS, Executive is willing to serve the Company in such capacities on
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by Executive and the Company, the
parties hereto agree as follows:
ARTICLE 1
EMPLOYMENT
1.1 Term of Employment. The Executive shall be employed by the Company as
------------------
President and Chief Executive Officer for a period of four years commencing as
of the date hereof and terminating on July 31, 2000, unless earlier terminated
as provided in this Agreement (the "Term"); provided, however, that commencing
on the first anniversary of the date of this Agreement and on each anniversary
date thereafter, the Term shall automatically be extended for an additional year
unless the Company or Executive shall have given written notice not later than
120 days preceding such anniversary date, that the Company or the Executive, as
the case may be, does not wish to have the Term so extended.
1.2 Duties of Executive. The Executive shall be employed on a full time
-------------------
basis to hold the office of President and Chief Executive Officer of the
Company, and shall perform such duties as are normally performed by the
president and chief executive officer of a publicly-traded corporation in the
telecommunications industry. The Executive hereby accepts such employment and
undertakes to use his best efforts to discharge his duties and responsibilities.
During the Term, the Executive shall devote his full business time to the
discharge of his duties and responsibilities under this Agreement.
1.3 Compensation. During the Term, the Executive shall be entitled to a
------------
base salary equal to $400,000 per year payable bi-weekly, subject to any future
increases authorized by the Compensation Committee of the Board of Directors of
the Company.
In the event that the Compensation Committee of the Board of Directors fails to
authorize an annual increase in the Executive's base salary, the Executive shall
be entitled to a cost of living adjustment for such year as of the anniversary
date of this Agreement in an amount determined by multiplying Executive's then
annual base salary (inclusive of any previous increases and cost of living
adjustments pursuant to this Section 1.3) by the percentage annual increase from
the preceding anniversary date in the Bureau of Labor Statistics, U.S.
Department of Labor, 1982 Revised consumer Price Index (1967 = 100), it being
the intention of the parties hereto that the annual base salary of Executive
shall be increased (but at no time decreased) by a percentage equal to the
increase from the prior year in the aforementioned Bureau of Labor Statistics,
U.S. Department of Labor, 1982 Revised Consumer Price Index (1967 = 100).
1.4 Expense Reimbursements. The Company shall reimburse the Executive for
----------------------
business expenses reasonably incurred in connection with his employment in
accordance with the Company's reimbursement practice for executive officers upon
presentation of adequate documentation.
1.5 Benefits.
--------
a) The Executive shall be entitled to four weeks annual paid vacation in
accordance with the Company's vacation policy applicable to executive
personnel as in effect from time to time.
b) The Executive shall be eligible for bonuses from time to time in
accordance with the Company's Short-Term Management Incentive Plan and
Long-Term Management Incentive Plan (or any successor plans) as may be
established or granted by the Compensation Committee of the Board of
Directors of the Company.
c) The Executive shall be granted options to purchase 500,000 shares of
Common Stock of the Company pursuant to the 1990 Executive Incentive
Plan at an exercise price equal to $12.00 per share which shall vest
over a period of four years at the rate of 25% per year.
d) The Executive shall be awarded 62,500 shares of Restricted Stock
pursuant to the 1990 Executive Incentive Plan which shall vest over a
period of four years at the rate of 25% per year.
e) The Executive shall be entitled to receive all other employee benefits
and to participate in any employee benefit plans or programs as are
generally offered to or provided for executive officers of the Company
from time to time during the Term, including, without limitation, the
following: (i) Section 401(k) Plan; (ii) automobile allowance of
$1,200 per month, (iii) cellular telephone; (iv) initiation and
monthly dues for one club; (v) medical insurance for the Executive and
dependents and disability
2
insurance for the Executive; and (vi) life insurance coverage for the
Executive in the amount of $1,000,000.
f) The Company will make available to the Executive an interest free loan
in the principal amount of $2 million in accordance with the terms of
the promissory note attached hereto as Exhibit A, the proceeds of
which shall be used by the Executive for the purchase of Mtel Common
Stock.
g) The Executive acknowledges and agrees that he will relocate his
primary residence to Jackson, Mississippi in order to perform his
duties and responsibilities as President and Chief Executive Officer
of the Company, and the Company agrees to reimburse Executive for
customary relocation expenses in accordance with the Company's
relocation policy, which shall be grossed up for all applicable income
taxes. In addition to the above, the Company will provide Executive a
temporary living allowance in the amount of $40,000.
1.6 Disability of Executive. The Company has secured (or will secure, as
-----------------------
soon as practicable after the date hereof) disability income insurance for the
benefit of Executive such that, should Executive become totally disabled during
the Term, and, by reason of such total disability be unable to perform his
duties and responsibilities pursuant to this Agreement for a period of three
consecutive months, the Executive will receive monthly disability income
payments through such disability income insurance program in the amount of
$6,000 per month, commencing at the end of said three month period and
continuing until the termination or discontinuance of such disability or the
period provided for in the insurance program, whichever is longer. The
Executive's compensation provided for in Section 1.3 shall continue until the
commencement of disability payments provided in this Section 1.6. If and to the
extent disability income payments are not payable to the Executive through such
disability income insurance program by reason of the amendment or termination
thereof, then the Company shall itself pay such disability income payments to
Executive.
ARTICLE II
COVENANTS OF EXECUTIVE
2.1 Confidentiality. The Executive recognizes the interest of the Company
---------------
and its subsidiaries in maintaining the confidential nature of their proprietary
and other business and commercial information. During the Executive's
employment with the Company and following termination thereof for any reason,
the Executive shall not (except as authorized in writing by the Board of
Directors of the Company) publish, disclose or use for his own benefit or for
the benefit of a business or entity other than the Company, its subsidiaries or
otherwise, any secret, confidential, proprietary or other information not
generally known to public which was acquired by the Executive during
3
his employment relating to the Company's or any of its subsidiaries' businesses,
operations, customers, suppliers, products, employees, financial affairs, trade
or industrial practices, trade secrets, technology, know-how or intellectual
property. All records, files, data, documents and the like relating to
suppliers, customers, costs, prices, systems, methods, personnel, technology and
other materials relating to the Company or its subsidiaries shall be and remain
the sole property of the Company and such subsidiaries. Upon termination of the
Executive's employment hereunder, Executive shall not remove from the Company's
premises or retain any of the materials described in this Section 2.1, and all
such materials in the Executive's possession shall be returned promptly to the
Company.
2.2 Non-Competition. During the Executive's employment with the Company,
---------------
and for the two-year period following the termination of Executive's employment
with the Company for any reason, Executive shall not, without the prior written
consent of the Board of Directors of the Company, which consent may be withheld
at the sole discretion of such Board of Directors, engage or participate in,
assist or have an interest in, directly or indirectly, whether as an officer,
director, partner, owner, employee, consultant, agent or otherwise, the
operation, management or conduct of any business or enterprise that directly
competes in the same geographical area with any primary line of business in
which the Company or any of its subsidiaries is now engaged or hereafter
engages; provided, however, that nothing in this Section 2.2 shall prohibit the
Executive from acquiring or holding, for investment purposes, securities of any
corporation which may compete directly or indirectly with the Company.
ARTICLE III
TERMINATION OF EMPLOYMENT
3.1 Termination for Cause. The Executive's employment with the Company
---------------------
and this Agreement may be terminated by the Company during the Term upon the
occurrence of one or more of the following events:
a) The Executive's death;
b) If the Executive shall become totally disabled (within the meaning of
Section 1.6 hereof) and begins to receive disability income payments
as provided in Section 1.6 hereof; or
c) For cause, which for purposes of this Agreement shall mean that the
Executive shall have committed:
(i) an act of fraud, embezzlement or theft in connection with his
duties or in the course of his employment with the Company;
4
(ii) intentional wrongful damage to property of the Company or any of
its subsidiaries; or
(iii) intentional wrongful disclosure of secret processes or
confidential information of the Company or any of its
subsidiaries;
and any such act shall have been materially harmful to the Company. For
purposes of this Agreement, no act, or failure to act, on the part of Executive
shall be deemed "intentional" if it was due primarily to an error in judgment or
negligence, but shall be deemed "intentional" only if done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company. If the Executive's
employment with the Company is terminated upon the occurrence of one or more of
the events specified in clauses (a), (b), or (c) of this Section 3.1, then the
Executive shall only be entitled to receive Executive's then unpaid base salary
prorated to the date of termination, and the Executive shall not be entitled to
any other compensation or benefits for any period after the date of termination,
except as provided in Section 1.6 of this Agreement.
3.2 Termination by Company. The Executive's employment with the Company
----------------------
and this Agreement may be terminated by the Company at any time during the Term
for any reason other than the occurrence of one or more of the events specified
in clauses (a), (b) or (c) of Section 3.1; provided that in the event of
termination for any reason other than the occurrence of one or more of the
events specified in clauses (a), (b) or (c) of Section 3.1, the Executive shall
be entitled to receive his base salary and automobile allowance for the
remainder of the Term, which shall be in full satisfaction of the Company's
obligations hereunder, and Executive shall not be entitled to any other
compensation or benefits during such period arising out of or in connection with
this Agreement or the Executive's employment with the Company. In addition, in
the event that Executive's employment with the Company and this Agreement are
terminated by the Company pursuant to this Section 3.2, the provisions of
Section 2.2 hereof will not be applicable to the Executive.
3.3 Termination by Executive. This Agreement may be terminated by
------------------------
Executive at any time subsequent to the twelfth month following a filing
pursuant to any federal or state law in connection with any tender offer for
shares of the Company (other than a tender offer by the Company) or upon the
signing of any agreement for the merger or consolidation of the Company with
another corporation or for the sale of all or substantially all of the assets of
the Company or upon the adoption of any resolution of reorganization or
dissolution of the Company by the stockholders or upon the occurrence of any
other event or series of events, which tender offer, merger, consolidation,
sale, reorganization, dissolution or other event or series of events, in the
opinion of the Board of Directors of the Company, will, or is likely to, if
carried out, result in a change of control of the Company, or if during any
period of two consecutive years, individuals who at the beginning of such period
constituted the directors of the Company cease for any reason to constitute a
majority thereof (unless the election, or the nomination for
5
election by the Company's stockholders, of each director elected during any
such period was approved by the vote of at least two-thirds of the directors
then still in office who were directors of the Company at the beginning of any
such period). In the event this Agreement is terminated by Executive pursuant to
this Section 3.3, (a) the Executive shall be entitled to receive his
base salary and automobile allowance for the remainder of the Term which shall
be in full satisfaction of the Company's obligations hereunder, and the
Executive shall not be entitled to any other compensation or benefits arising
out of or in connection with this Agreement or the Executive's employment with
the Company; and (b) the provisions of Section 2.2 hereof will not be
applicable to the Executive.
ARTICLE IV
GENERAL PROVISIONS
4.1 Withholding of Taxes. The Company may withhold from any amounts
--------------------
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or government regulation or ruling.
4.2 Notice. For purposes of this Agreement, all communications including,
------
without limitation, notices, consents, requests or approvals provided for herein
shall be in writing and shall be deemed to have been duly given when delivered
or five business days after having been mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed to the
Company (to the attention of the Secretary of the Company) at its principal
executive office and to Executive at his principal residence, or to such other
address as any party may have furnished to the other in writing and in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
4.3 Governing Law. The validity, interpretation, construction and
-------------
performance of this Agreement shall be governed by the laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such
State.
4.4 Validity. If any provisions of this Agreement or the application of
--------
any provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision to any other person or circumstances shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise
illegal shall be reformed to the extent (and only to the extent) necessary to
make it enforceable, valid and legal.
4.5 Entire Agreement. This Agreement supersedes any other agreement, oral
----------------
or written, between the parties with respect to the employment of Executive by
the Company, and contains all of the agreements and understandings between the
parties with respect to such employment. Any waiver or modification of any term
of this Agreement shall be effective only if it is signed in writing by both
parties.
6
4.6 Successors and Binding Agreements.
---------------------------------
a) This Agreement shall be binding upon and inure to the benefit of the
Company and any Successor of or to the Company, but shall not
otherwise be assignable or delegatable by the Company. "Successor"
shall mean any successor in interest, including, without limitation,
any entity, individual or group of persons acquiring directly or
indirectly all or substantially all of the business or assets of the
Company whether by sale, merger, consolidation, reorganization or
otherwise.
b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributee and legatees.
c) The Company shall require any successor to agree (by agreement in form
and substance satisfactory to Executive) within thirty (30) days after
becoming a Successor to perform this Agreement to the same extent as
the original parties would be required if no succession had occurred.
d) This Agreement is personal in nature and neither of the parties shall,
without the consent of the other, assign, transfer or delegate this
Agreement or any rights or obligations hereunder.
4.7 Captions. The captions in this Agreement are solely for convenience
--------
of reference and shall not be given any effect in the construction or
interpretation of the Agreement.
4.8 Miscellaneous. No provisions of this Agreement may be modified,
-------------
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior to subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject mater hereof
have been made by either party which are not set forth expressly in this
Agreement.
4.9 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement.
7
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
MOBILE TELECOMMUNICATION
TECHNOLOGIES CORP.
By: /s/ Xxxx X. Xxxxxx
----------------------------
Xxxx X. Xxxxxx
Chairman of the Board
/s/ Xxxx X. Xxxxxx
-------------------------------
Xxxx X. Xxxxxx
8
