[TDS LETTERHEAD]
CONFIDENTIAL EMPLOYMENT AGREEMENT
This Confidential Employment Agreement ("Agreement") is entered into by
and between Telephone and Data Systems, Inc., a Delaware corporation with its
principal place of business located in Chicago, Illinois ("TDS"), and Xxxxxx X.
Xxxxxxx, an individual currently residing at 0000 Xxxxxxxx Xx., Xxxxxxxx,
Xxxxxxxx 00000 ("Xxxxxxx").
WHEREAS, TDS and its subsidiaries are in the business of providing
local telephone, personal communication, and wireless communication services to
their customers;
WHEREAS, TDS has employed Xxxxxxx since 1981 and Xxxxxxx formerly held
the position of Executive Vice President - Finance and Chief Financial Officer
of TDS;
WHEREAS, Xxxxxxx is a member of TDS's Board of Directors;
WHEREAS, Xxxxxxx has acquired extensive knowledge of and experience
in TDS's business during his employment at TDS;
WHEREAS, Xxxxxxx and TDS desire to continue their employment
relationship until December 15, 1998, when Xxxxxxx will retire from TDS;
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement and for other good and valuable consideration, the adequacy and
receipt of which the parties expressly acknowledge, Xxxxxxx and TDS agree as
follows:
1. EMPLOYMENT PERIOD. TDS will continue to employ Xxxxxxx at his
current annual salary until December 15, 1998, on which date Xxxxxxx will retire
from employment with TDS. Xxxxxxx will complete all necessary paperwork to
establish December 15, 1998 as his official TDS retirement date. Until December
15, 1998, Xxxxxxx will make himself available to TDS personnel at reasonable
times to respond to questions regarding TDS's financial matters. Nothing in this
Agreement shall preclude Xxxxxxx from seeking, accepting, or commencing
employment with an employer other than TDS prior to December 15, 1998, provided
that such employment does not violate Paragraph 11 of this Agreement.
2. EMPLOYMENT BENEFITS. TDS will maintain all of Xxxxxxx'x current TDS
employment benefits until December 15, 1998 when they will cease in accordance
with the terms of the respective benefit plans. Thereafter, Xxxxxxx may continue
his medical and life insurance coverages on the same terms and conditions as any
other retiree under TDS's Retiree Insurance Plan. TDS will offer Xxxxxxx
continued dental and vision insurance coverage in accordance with TDS's Retiree
Insurance Plan for 18 months after his December 15, 1998 retirement date.
3. COMPANY CAR. Xxxxxxx may keep his current company car after December
15, 1998, provided that he bears the entire cost of all expenditures for the car
after that date.
4. COMPUTER EQUIPMENT. Xxxxxxx may keep the TDS computer equipment that
he now has in his home. Xxxxxxx agrees that he will not request, and TDS will
not purchase, any additional computer equipment for Xxxxxxx'x use in his home,
or elsewhere.
5. STOCK OPTIONS. On December 15, 1998, Xxxxxxx will vest in an
automatic award of 3700 stock options pursuant to the 1994 TDS Long Term
Incentive Plan. On December 15, 1998, Xxxxxxx also will vest in the 1997
performance based award of 12,950 stock options and in an automatic award of
9700 stock options pursuant to the 1998 TDS Long Term Incentive Plan. TDS shall
request its Board of Directors to xxxxx Xxxxxxx until March 15, 1999, 90 days
after his December 15, 1998 retirement date, to exercise his stock options in
accordance with terms of those respective Plans.
6. SEPARATION PAYMENT. On Xxxxxxx'x December 15, 1998 retirement date,
TDS will pay Xxxxxxx the xxxxx amount of $365,000 less (i) any amounts earned
and paid as salary for Xxxxxxx'x employment at TDS after August 31, 1998, (ii)
the $3541.67 cash advance that Xxxxxxx received when he joined TDS, and (iii)
all authorized and legally required withholding and deductions. TDS will make
such payment by check payable to Xxxxxxx and will send it to Xxxxxxx at his
address set forth in Paragraph 19 or to such other address as Xxxxxxx
subsequently notifies TDS in writing.
7. PENSION, 401(k), AND SERP PAYMENTS. As soon after Xxxxxxx'x
retirement date as feasible and provided that Xxxxxxx completes the necessary
paperwork, TDS will pay Xxxxxxx his Telephone and Data Systems, Inc. Employees'
Pension Trust I Plan, 401(k), and SERP balances in accordance with the terms of
those Plans.
8. MEMBERSHIP IN TDS, UNITED STATES CELLULAR CORPORATION, AND AERIAL
COMMUNICATIONS, INC. BOARDS OF DIRECTORS. On or before the date that Xxxxxxx
executes this Agreement, Xxxxxxx will resign his positions as a member of the
Boards of Directors of United States Cellular Corporation and Aerial
Communications, Inc. by signing the resignation forms attached to this Agreement
and returning them with the signed Agreement to TDS. Nothing in this Agreement
is intended to limit or interfere with Xxxxxxx'x ability to fully discharge his
continued responsibilities as a TDS Director.
9. EMPLOYMENT INQUIRIES. TDS will direct to TDS's President and Chief
Executive Officer all inquiries regarding Xxxxxxx'x employment with TDS.
10. NON-DISCLOSURE AND USE OF CONFIDENTIAL AND PROPRIETARY INFORMATION.
TDS's employment of Xxxxxxx has and will result in his exposure and access to
confidential and proprietary information including, but not limited to, TDS and
its subsidiaries' customer lists, price lists, manufacturing and supply costs,
customer information, business plans, financial information, and business
strategies which Xxxxxxx did not have access to prior to his employment with TDS
and which information is of great value to TDS. Xxxxxxx shall not, at any
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time, make available to any competitor or potential competitor of TDS or of
its subsidiaries, or divulge, disclose, or communicate to any person, firm,
corporation, or other business entity other than TDS authorized personnel, in
any manner whatsoever, any such confidential or proprietary information,
unless authorized to do so in writing by TDS's President and Chief Executive
Officer. Under no circumstance shall Xxxxxxx remove any confidential or
proprietary information from TDS's premises without the express written
consent of TDS's President and Chief Executive Officer. Xxxxxxx shall not at
any time utilize any of TDS's confidential or proprietary information on
behalf of himself or any entity other than TDS or its subsidiaries.
11. RESTRICTIVE COVENANT AND EMPLOYEE NON-SOLICITATION. Until June 15,
1999, Xxxxxxx shall not directly, or through any other individual or entity,
other than on TDS's behalf:
(a) provide services similar to those provided by TDS or its
subsidiaries including, but not limited to, local telephone, personal
communication, or wireless communication services, to any customer of
TDS or of any of its subsidiaries. The term "customer" is defined as
any individual or entity for whom TDS or any of its subsidiaries
provided services during the one year period from June 15, 1998 to June
15, 1999;
(b) solicit for employment any employee of TDS or of its
subsidiaries whom TDS or any of its subsidiaries employed at any time
during the one year period from June 15, 1998 to June 15, 1999.
Nothing in this Paragraph precludes Xxxxxxx from seeking, accepting, or
commencing employment with Sonera.
12. INJUNCTIVE RELIEF. Xxxxxxx acknowledges that the covenants
contained in Paragraphs 10 and 11 above are reasonable in scope and duration, do
not unduly restrict Xxxxxxx'x ability to engage in his livelihood, and are
necessary to protect TDS's legitimate business interests. Without limiting the
rights of TDS to pursue and obtain any other legal and/or equitable remedy
available to it for any breach by Xxxxxxx of the covenants contained in
Paragraphs 10 and 11 above, Xxxxxxx further acknowledges that a breach of those
covenants would cause a loss to TDS and its subsidiaries which could not
reasonably or adequately be compensated in damages in an action at law, that
remedies other than injunctive relief could not fully compensate TDS for a
breach of those covenants and that, accordingly, TDS shall be entitled to
injunctive relief to prevent any breach or continuing breaches of Xxxxxxx'x
covenants set forth in Paragraphs 10 and 11 above. Xxxxxxx and TDS intend that
if, in any action before any Court empowered to enforce those covenants, the
Court finds any term, restriction, covenant or promise to be unenforceable, then
such term, restriction, covenant or promise shall be deemed modified to the
extent necessary to make it enforceable by such Court.
13. GENERAL RELEASE. Xxxxxxx, and anyone claiming through Xxxxxxx,
agree not to xxx and release TDS and any and all parents, divisions,
subsidiaries, partnerships, affiliates and/or other related entities of TDS
(whether or not such entities are wholly owned) and each of those entities'
past, present, and future owners, trustees, fiduciaries, shareholders,
directors, officers, administrators, agents, partners, employees, attorneys, and
the predecessors, successors, and
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assigns of each of them (collectively, the "Released Parties"), from any and
all claims, whether known or unknown, which Xxxxxxx now has, has ever had, or
may ever have against any of the Released Parties arising from or related to any
act, omission, or thing occurring at any time prior to his signing this
Agreement including, but not limited to, any and all claims that in any way
result from, or relate to, Xxxxxxx'x employment or cessation of employment with
any of the Released Parties. These released claims further include, but are not
limited to, any and all claims that Xxxxxxx could assert or could have asserted
in any federal, state, or local court, commission, department, or agency under
any common law theory, or under any fair employment, employment, contract, tort,
federal, state, or local law, regulation, ordinance, or executive order
including under the following laws as amended from time to time: the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Americans With Disabilities Act, the Employee Retirement Income Security Act,
the Family and Medical Leave Act, the Illinois Human Rights Act, and the Chicago
and Xxxx County Human Rights Ordinances.
TDS agrees not to xxx and further releases Xxxxxxx from all claims that
it now has, has ever had, or may ever have against Xxxxxxx arising from or
related to any act, omission, or thing occurring at any time prior to his
signing this Agreement.
14. ACKNOWLEDGMENT OF SUFFICIENT TIME TO CONSIDER THIS AGREEMENT AND TO
CONSULT WITH A LAWYER. Xxxxxxx expressly acknowledges that he has been informed
that he may consult with a lawyer of his choice, he has consulted with his
lawyer, and he has had sufficient time to consult with his lawyer prior to
executing this Agreement. Xxxxxxx further acknowledges that he has been informed
that he is entitled to a period of at least 21 days within which to consider
this Agreement, but that he may execute this Agreement at any time prior to the
expiration of the 21-day period.
15. REVOCATION RIGHT. Within 7 days following the date of Xxxxxxx'x
execution of this Agreement, Xxxxxxx shall have the right to revoke this
Agreement by serving within such 7- day period written notice of his revocation
upon TDS's President and Chief Executive Officer. If Xxxxxxx does not revoke
this Agreement during this 7-day period, this Agreement shall become effective
on the eighth day after the date of Xxxxxxx'x execution of this Agreement and
Xxxxxxx shall have no further right to revoke this Agreement.
16. KNOWING AND VOLUNTARY RELEASE. Xxxxxxx acknowledges that in
releasing and waiving any claims and rights that he has or may have against the
Released Parties, including those under the Age Discrimination in Employment
Act, he does so knowingly and voluntarily, in exchange for consideration in
addition to anything of value to which he already is entitled.
17. RETURN OF TDS PROPERTY. Immediately upon TDS's request and no later
than December 15, 1998, Xxxxxxx shall return to TDS all of TDS's property in his
possession that does not relate to his TDS Board responsibilities. This property
includes, but is not limited to, TDS's financial records, company credit cards,
tapes, records, manuals, employee lists, customer lists, brochures, files,
catalogs, price lists, cost information, keys, equipment, and all copies
thereof.
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18. CONFIDENTIAL AGREEMENT. The existence and the terms of this
Agreement are confidential. Accordingly, Xxxxxxx shall not disclose the
existence or terms of this Agreement to anyone other than to his attorney, his
immediate family, or as required by law.
19. NOTICES. All notices and other communications required or permitted
under this Agreement shall be deemed to have been duly given and made if in
writing and if served personally on the party for whom intended or by being
deposited, postage prepaid, certified or registered mail, return receipt
requested, in the United States mail bearing the address shown below for each
such party or such other address as that party may designate in writing
hereafter:
(a) If to TDS: (b) If to Xxxxxxx:
XxXxx X. Xxxxxxx, Xx. Xxxxxx X. Xxxxxxx
President and Chief Executive Officer 0000 Xxxxxxxx Xx.
Telephone and Data Systems, Inc. Xxxxxxxx, Xxxxxxxx 00000-0000
00 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
20. WAIVER. TDS's future waiver of a breach by Xxxxxxx of any provision
of this Agreement or failure to enforce any such provision with respect to him
shall not operate or be construed as a waiver of any subsequent breach by
Xxxxxxx of any such provision or of Xxxxxxx'x right to enforce any such
provision with respect to Xxxxxxx. No act or omission of TDS shall constitute a
waiver of any of its rights hereunder except for a written waiver signed by
TDS's President and Chief Executive Officer.
21. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding of Xxxxxxx and TDS with regard to the matters described in this
Agreement, and supersedes any and all prior and/or contemporaneous agreements
and understandings, oral or written, between Xxxxxxx and TDS.
22. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Illinois without regard to its conflicts of laws rules.
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XXXXXXX AND TDS EXPRESSLY STATE THAT THEY HAVE READ THIS
AGREEMENT, THAT THEY UNDERSTAND EACH OF ITS TERMS, AND THAT
THEY INTEND TO BE BOUND THEREBY.
TELEPHONE AND DATA SYSTEMS, INC. XXXXXX X. XXXXXXX
By: /S/ XXXXX X. XXXXXXX, XX. /S/ XXXXXX X. XXXXXXX
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XxXxx X. Xxxxxxx, Xx.
President and Chief Executive Officer
Dated: October 15, 1998 Dated: October 15, 1998
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