Exhibit 10.37
STAY PUT BONUS AND EMPLOYMENT AGREEMENT
This Stay Put Bonus and Employment Agreement (the "Agreement") is made
and entered into as of February 1, 2002, by and between Chadmoore Wireless
Group, Inc., a Colorado corporation (the "Company"), and _____________, the
Company's current _____________ (the "Employee").
Recitals
--------
WHEREAS, the Company has entered into an Agreement and Plan of
Reorganization, dated August 21, 2000, as amended August 31, 2000, February 20,
2001, June 29, 2001, and November 16, 2001 (the "Asset Sale Agreement"), among
Nextel Communications, Inc. ("Nextel"), Nextel Finance Company, a wholly owned
subsidiary of Nextel, and the Company, under which Nextel Finance will acquire
substantially all of the Company's operating assets, together with limited
liabilities, in exchange for shares of class A common stock of Nextel or cash
(the "asset sale");
WHEREAS, following the closing of the asset sale (the "Closing Date"),
the Company proposes to dissolve and liquidate its assets pursuant to the Plan
of Liquidation of Chadmoore Wireless Group, Inc. (the "Plan of Liquidation"),
which liquidation may include the establishment of two trusts, the Creditor
Liquidating Trust and the Shareholder Liquidating Trust, as defined in the Plan
of Liquidation;
WHEREAS, the Company recognizes that the Employee possesses an intimate
and essential knowledge of the Company which is vital to the consummation of the
asset sale as well as to the orderly dissolution and liquidation of the Company,
the settlement of claims of creditors, the minimization of the Company's
liabilities and the maximization of the distributions to shareholders pursuant
to the Plan of Liquidation;
WHEREAS, the Company had previously granted certain stay-put options to
the Employee and also considered the granting of restricted stock to the
Employee in order to incentivize the Employee to remain with the Company up to
and following the closing of the asset sale, but because of a continuing decline
in the market price of Nextel common stock and certain other technical and
timing difficulties surrounding the exercise of the stay-put options or the
restricted shares, it was apparent that the Employee would not fully realize the
intended benefit of such stay-put options or restricted shares;
WHEREAS, in order to achieve the intended motivational effects, the
Board deemed it to be in the best interests of Chadmoore's shareholders to
cancel the stay-put options and instead to grant to the Employee a stay-put cash
payment, subject to forfeiture prior to the end of a period of six (6) months
from the Closing Date;
WHEREAS, the Employee's current Amended and Restated Employment
Agreement shall be terminated in accordance with its terms as of the Closing
Date and the Company and the Employee wish to establish the terms of the
Employee's continued retention by the Company;
WHEREAS, the Company and Employee desire to enter into this Agreement
in order to motivate and incentivize Employee, to resolve certain issues
regarding the previous grant of stay put options to Employee and to encourage
Employee to continue his employment with the Company leading up to and after the
asset sale and dissolution, and to memorialize the terms of Employee's
employment during the five-year liquidation period under Colorado law;
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
Agreement
---------
1. Waiver and Release. In consideration of the confirmation of the
previous grant of the Stay Put Bonus as set forth in Section 2 hereof, the
Employee hereby waives and voluntarily relinquishes and releases any and all
claims against the Company with respect to the previous grant of stay-put
options by the Company or the proposed grant of stay-put restricted shares by
the Company.
2. Stay Put Bonus. Promptly after the Closing Date, the Company shall
deposit into an escrow account as a "stay put bonus" for the Employee the amount
of $__________ (the "Stay Put Bonus"). Xxxx Xxxx Xxxx & Freidenrich, LLP,
corporate counsel to the Company, shall serve as escrow agent pursuant to a
standard form of escrow agreement with directors Xxxxxx Xxxxx and Xxxx Xxxxxxxx
serving as joint signatories for the release of funds. If Employee is still
employed by the Company on the date which is six (6) months after the Closing
Date, or upon Employee's earlier involuntary termination of employment by the
Company other than for "Cause" (as defined in Section 9(a) hereof) or upon
Employee's termination of his employment for "Good Reason" (as defined in
Section 9(b) hereof), or upon Employee's death or disability (as discussed in
Section 7(a) hereof), Employee shall be paid the Stay Put Bonus.
3. Retention, Term, And Duties.
---------------------------
(a) Retention. Effective as of the Closing Date, the Company
shall employ the Employee as its ____________________, and the Employee hereby
accepts such employment upon the terms and subject to the conditions of this
Agreement. In the event of the formation of the Creditor Liquidating Trust and
the Shareholder Liquidating Trust (together, the "Trusts"), the Employee agrees
to serve as trustee of the Trusts in accordance with the terms of the Creditor
Liquidating Trust Agreement and the Shareholder Liquidating Trust Agreement
(together, the "Trust Agreements"). In such event, the provisions of Sections
4(c), 4(d), and 4(e) hereunder shall be of no further force and effect, and the
Employee shall receive only such compensation as provided under the Trust
Agreements for his service as trustee.
(b) Initial Term. The initial term of employment of the
Employee by the Company shall be for the period commencing on the Closing Date,
and ending on the date six (6) months following the Closing Date (the "Initial
Term"), unless this Agreement is sooner terminated pursuant to Section 7 or
Section 9 hereof.
2
(c) Second Six Month Term. The term of Employee's employment
will be automatically extended for an additional six (6) month period commencing
on the day following the end of the Initial Term (the "Second Six Month Term"),
unless either party to this Agreement elects to terminate this Agreement by
providing written notice of such election to the other party not less than sixty
(60) days prior to the expiration of the Initial Term.
(d) Second Year Term. Upon the expiration of the Second Six
Month Term on the date that is one (1) year after the Closing Date, the term of
Employee's employment will be automatically extended for an additional one-year
period (the "Second Year Term"), unless either party to this Agreement elects to
terminate this Agreement by providing written notice of such election to the
other party not less than sixty (60) days prior to the expiration of the Second
Six Month Term.
(e) Terms Years Three Through Five. Upon the expiration of the
Second Year Term on the date that is two (2) years after the Closing Date, the
term of Employee's employment will be automatically extended for an additional
three (3) year period (the "Final Term"), unless either party to this Agreement
elects to terminate this Agreement by providing written notice of such election
to the other party during the sixty (60) day period prior to the expiration of
the Second Year Term.
(f) Duties. The Employee shall report only to the Company's
Board of Directors. During the term of this Agreement, the Employee shall devote
such amount of his business time, care, attention, and best efforts to the
Company's dissolution and liquidation as is reasonably necessary, as determined
by the Company's Board of Directors, with the Employee abstaining from such
determination if he is then a member of the Board. During the Initial Term and
Second Six-Month Term, Employee shall work for the Company on a full-time basis.
Thereafter, Employee's work for the Company need not be on a full-time basis.
4. Compensation.
------------
(a) Base. During the Initial Term and the Second Six-Month
Term, the Company shall pay to the Employee an annualized base salary of
$_____________ (the "Base Compensation"), payable in equal installments, but no
less often than semi-monthly. If this Agreement is terminated for any reason
during the Initial Term, the Company shall pay to the Employee his Base
Compensation earned to the date of termination.
(b) Year-end Bonus. In addition to the Base Compensation, if
Employee is still employed by the Company on the date which is one (1) year
after the Closing Date, or upon Employee's earlier involuntary termination of
employment by the Company other than for "Cause" (as defined in Section 9(a)
hereof) or upon Employee's termination of his employment for "Good Reason" (as
defined in Section 9(b) hereof), Employee shall be paid $____________ (the
"Year-end Bonus").
3
(c) Second Year Salary. During the Second Year Term, the
Employee shall be paid $5,000 per month. If this Agreement is terminated for any
reason during the Second Year Term, the Company shall pay to the Employee his
Second Year Term salary earned to the date of termination.
(d) Second Year-end Bonus. In addition to the salary for the
Second Year Term as described in paragraph 4(c) above, if Employee is still
employed by the Company on the date which is two (2) years after the Closing
Date, or upon Employee's earlier involuntary termination of employment by the
Company other than for "Cause" (as defined in Section 9(a) hereof) or upon
Employee's termination of his employment for "Good Reason" (as defined in
Section 9(b) hereof), Employee shall be paid $30,000 (the "Second Year-end
Bonus").
(e) Salary for Final Term. During the Final Term, the Employee
shall be paid $6,500 per month. If this Agreement is terminated for any reason
during the Final Term, the Company shall pay to the Employee his Final Term
salary earned to the date of termination.
5. Other Benefits.
--------------
(a) Insurance Benefits. During the Initial Term and the Second
Six Month Term, the Company shall continue to make available to the Employee any
benefits of a type, nature, and amount comparable to those benefits which have
been heretofore provided to the Employee up to this time by the Company
(including, without limitation, any disability, medical, and life insurance
benefits).
(b) Expenses. The Company shall reimburse the Employee for all
reasonable and customary ordinary course business expenses which the Employee
shall incur in connection with the Employee's services to the Company pursuant
to this Agreement, subject to Employee's providing adequate written support for
such expenses at the reasonable request of the Company. Any business expenses in
excess of $10,000 shall require the prior written approval of the Board.
6. Payment of Taxes. All payments of any kind made to Employee under
this Agreement shall be subject to withholding under applicable federal and
state law including, but not limited to, federal and state income taxes, FICA,
and other similar taxes.
7. Death or Disability of Employee.
-------------------------------
(a) Effect. This Agreement shall automatically terminate upon
the Employee's death or disability (as defined below). If Employee's death or
disability occurs during the Initial Term, the Company shall pay to the
Employee's estate or to Employee the full amount of the Stay Put Bonus. If
Employee's death or disability shall occur during the Second Six Month Term, the
Company shall pay to the Employee's estate or to Employee his salary and
4
Year-end Bonus, but prorated through the date of the Employee's death or
disability. If Employee's death or disability shall occur during the Second Year
Term, the Company shall pay to the Employee's estate or to Employee a prorated
amount of the Second Year-end Bonus through the date of the Employee's death or
disability, to the extent that Section 4(d) is in effect. Except as otherwise
specified herein, the Employee's estate and/or the Employee will not be entitled
to any other benefits or compensation arising out of the Employee's death or
disability.
(b) Determination of Disability. For purposes of this
Agreement, the Employee shall be considered disabled if, due to illness or
injury, either physical or mental, he is unable to perform his customary duties
and responsibilities as required by this Agreement for more than two (2) months
in the aggregate out of any period of four (4) consecutive months. The
determination that the Employee is disabled shall be made by the Board of
Directors of the Company (with the Employee abstaining from the decision if he
is then a member of such Board), based upon an examination and certification by
a physician based in Las Vegas, Nevada selected by the Board of Directors
subject to the Employee's approval, which approval shall not be unreasonably
withheld. The Employee agrees to submit timely to any required medical or other
examination, provided that such examination shall be conducted in Las Vegas and
that if the examining physician is other than the Employee's personal physician,
the Employee shall have the right to have such personal physician present at
such examination.
8. Indemnification And Insurance.
-----------------------------
(a) Obligation. The Company shall indemnify and hold harmless,
and in any action, suit, or proceeding, defend the Employee against all
expenses, costs, liabilities, and losses (including attorney's fees, judgments,
and fines and amounts paid or to be paid in any settlement) (collectively
"Indemnified Amounts") reasonably incurred or suffered by the Employee arising
out of the course and scope of the Employee's service as an officer of the
Company or any affiliate to the full extent permitted by the Bylaws of the
Company as in effect on the date of this Agreement, or, if greater, as permitted
by the Colorado Business Corporation Act (the "CBCA"), provided that the
indemnity afforded by the Company's Bylaws shall never be greater than permitted
by the CBCA. The Company shall advance on behalf of Employee all Indemnified
Amounts as they are incurred. To the extent a change in the CBCA (whether by
statute or judicial decision) permits greater indemnification than is now
afforded by the Bylaws and a corresponding amendment shall not be made in said
Bylaws, it is the intent of the parties hereto that the Employee shall enjoy the
greater benefits so afforded by such change.
(b) Determination. Any claims for indemnification asserted by
the Employee pursuant to Section 8(a) above shall be reviewed by independent
legal counsel selected by the Board of Directors, which counsel will determine
whether such claim is proper in a written opinion furnished to the Board of
Directors, the Company, and the Employee. In the event it is determined by such
counsel that Employee is not entitled to indemnification pursuant to this
Section 8(a) (and if contested by Employee, such determination is confirmed by
the final non-appealable order of a court of competent jurisdiction), or if a
court of competent jurisdiction determines in a final non-appealable order that
Employee is not entitled to indemnification,
5
Employee hereby agrees that he shall promptly reimburse the Company for all
advances of Indemnified Amounts made by the Company on Employee's behalf.
(c) Other Rights. The contract rights conferred by this
Section 8 shall not be exclusive of any other right which the Employee may have
or hereafter acquire under any statute, provision of the Articles of
Incorporation or Bylaws, agreement, vote of disinterested directors or
otherwise. This Section 8 shall not be deemed to affect any rights to
subrogation which may exist in any policy of directors and officers liability
insurance.
(d) Notice of Claims. The Employee shall promptly advise the
Company in writing of the institution of any action, suit, or proceeding which
is or may be subject to this Section 8, provided that Employee's failure to so
advise the Company shall not affect the indemnification provided for herein,
except to the extent such failure has a material and adverse effect on the
Company's ability to defend such action, suit, or proceeding.
(e) Indemnification Insurance. The Employee shall be covered
by insurance, to the same extent as other senior executives and directors of the
Company are covered by insurance, with respect to (a) directors and officers
liability, (b) errors and omissions, and (c) general liability insurance. The
Company shall maintain as necessary reasonable and customary insurance of the
type specified in parts (b) and (c) in the preceding sentence. The Employee
shall be a named insured or additional insured, without right of subrogation
against him, under any policies of insurance carried by the Company. The Company
will, in good faith, make efforts to maintain insurance coverage of the type
specified in part (a) above at commercially reasonable rates, but the failure to
obtain such coverage shall not constitute a breach of the Company's obligations
hereunder.
9. Termination.
-----------
(a) By the Company for "Cause." The Company may terminate this
Agreement for "Cause" at any time. For purposes of this Agreement, the term
"Cause," when used in connection with termination of the Agreement by the
Company under this Section 9(a), shall be limited to (i) the willful engaging by
the Employee in gross misconduct which is materially injurious to the Company,
(ii) conviction of the Employee of a felony involving any financial impropriety
or which would materially interfere with the Employee's ability to perform his
services required under this Agreement or otherwise be materially injurious to
the Company, or (iii) the willful refusal of the Employee to perform in a
material respect any of his material obligations under this Agreement without
proper justification after being notified with specificity by the Board of
Directors in writing of the particular respects in which the Board of Directors
asserts that Employee has not performed such material obligations.
(b) By the Employee for "Good Reason." The Employee may
terminate this Agreement for "Good Reason" at any time. For purposes of this
Agreement, the term "Good Reason," when used in connection with the termination
of the Agreement by the Employee
6
under this Section 9(b), shall be limited to the failure of the Company to
perform in a material respect any of its material obligations under this
Agreement without proper justification.
(c) Termination Without "Cause" or "Good Reason." Either the
Company or the Employee shall have the right to terminate this Agreement without
"Cause" or "Good Reason" and in its or his discretion, upon written notice to be
given to the other party not less than sixty (60) days prior to the effective
date of such termination. In such event, all amounts due and owing under this
Agreement shall be payable in accordance with their terms as set forth elsewhere
in this Agreement.
(d) Effect of Termination. If this Agreement is terminated for
any reason prior to the end of any particular term as set forth above, neither
party shall have any further obligation under this Agreement except with respect
to those provisions of this Agreement which, by their terms, require performance
by the parties subsequent to termination of this Agreement.
10. Confidentiality.
---------------
(a) Except as may be in furtherance of the Employee's
performance of his functions as the Company's chief executive officer or
otherwise with the consent of the Board of Directors, the Employee shall not,
throughout the term of this Agreement or thereafter, disclose to any third
party, or use or authorize any third party to use, any material information
relating to the material interests of the Company (or the Trusts) which Employee
knows to be confidential and valuable to the Company or the Trusts (the
"Confidential Information"). The Confidential Information is and will remain the
sole and exclusive property of the Company, and, during the term of this
Agreement, the Confidential Information, when entrusted to the Employee's
custody, shall be deemed to remain at all times in the Company's sole possession
and control. Notwithstanding the foregoing, the Employee may, after prior
written notice to the Company (to the extent such notice is possible under the
circumstances) disclose such Confidential Information pursuant to subpoena or
other legal process, and promptly, thereafter shall advise the Company in
writing as to the Confidential Information which was disclosed and the
circumstances of such disclosure.
(b) Return of Documents. Upon termination of this Agreement
for any reason whatsoever, or whenever requested by the Board of Directors of
the Company, the Employee shall return or cause to be returned to the Company
all of the Confidential Information or any other property of the Company in the
Employee's possession or custody or at his disposal, which he has obtained or
been furnished, without retaining any copies thereof.
11. Interpretation. Employee and the Company agree that this Agreement
shall be interpreted in accordance with and governed by the laws of the State of
Nevada, including all matters of construction, validity, performance, and
enforcement and without giving effect to the
7
principles of conflict of laws, except that matters of corporate and trust law
and governance shall be governed by and construed in accordance with the laws of
the State of Colorado.
12. Successors and Assigns.
----------------------
(a) Successors of the Company. The obligations under this
Agreement shall be binding upon the Company and its successors or assigns.
(b) Heirs of Employee. This Agreement shall inure to the
benefit of and be enforceable by the Employee's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devises, and legatees.
13. Notices. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
if to the Company:
Chadmoore Wireless Group, Inc.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000
Fax: 000 000 0000
With a copy to:
Xxxx Xxxx Xxxx & Freidenrich LLP
Attn: Xxxxx X. Xxxxx, Esq.
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Fax: 000 000 0000
and if to the Employee, at the address specified at the end of this Agreement.
Notice may also be given at such other address as either party may have
furnished to the other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
14. Effectiveness/Validity. If, for any reason, both the asset sale is
not consummated and the Company does not file its articles of dissolution, this
Agreement shall have no further force or effect. If any one or more of the
provisions (or any part thereof) of this Agreement shall be held invalid,
illegal, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions (or any part thereof) shall not in
any way be affected or impaired thereby.
8
15. Modification. This Agreement represents the entire agreement of the
parties with respect to the subject matter thereof and supersedes all prior
negotiations, agreements and understandings, whether written or oral. This
Agreement may only be modified or amended by a supplemental written agreement
signed by Employee and the Company.
16. Further Action. The Company and the Employee each agree to execute
and deliver such further documents and to take such further actions as may be
reasonably necessary in order to give effect to the intentions expressed in this
Agreement.
17. Counterparts. This Agreement may be executed in two counterparts,
by facsimile signature or otherwise, each of which shall be an original, and
both of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year written below.
CHADMOORE WIRELESS GROUP, INC.
Date: By:
-------------------------------- -----------------------------------
Xxxxxx X. Xxxxx
Title: Chief Executive Officer
EMPLOYEE: ___________________
Date:
-------------------------------- ---------------------------------------
Employee's Signature
Address for Notice to Employee:
-------------------------------
-------------------------------
-------------------------------
9
