Exhibit 10.26
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release ("Agreement") dated as of
December 13, 2002, is between AIRGATE PCS, INC., a Delaware corporation
(which, with its affiliates, is herein called "the Company"), and XXXX
XXXXXXXXX, an individual resident of Xxxxxx County, Georgia (the "Executive").
WHEREAS, Executive has been employed by the Company as Chief Financial
Officer; and
WHEREAS, the parties desire to memorialize the terms of Executive's
separation from employment with the Company.
NOW, THEREFORE, in consideration of the promises set forth below, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Termination of Employment.
(a) Effective as of October 31, 2002 (the "Separation Date"),
Executive will cease to be an employee of the Company. Further, effective
as of October 21, 2002, the Executive hereby resigns as an officer,
fiduciary or member of the board of directors of the Company or its
subsidiaries or any plan or trust sponsored by the Company.
(b) Notwithstanding the foregoing, for purposes of the AirGate
Incentive Stock Option Plan (the "Plan"), Executive's "Continuous Status as
an Employee" (as defined in the Plan) shall terminate on October 31, 2005.
2. Severance Benefits. The Company shall provide Executive the following
severance benefits:
(a) Severance Payment. The Company shall pay Executive Three Hundred
Thousand and No/100 Dollars ($300,000.00), less all applicable local, state
and federal taxes and withholdings, to be paid in biweekly amounts of
Eleven Thousand Five Hundred Thirty-Eight and 46/100 Dollars
($11,538.46)commencing on the first regular pay date of the Company after
the Separation Date and continuing for six (6) months, and at the end of
such six-month period, the remainder shall be payable in a lump sum
payment. These payments shall be in lieu of any other severance payments to
which Executive may be entitled.
(b) Bonus for FY2002. The Company shall pay to Executive a bonus with
respect to fiscal year 2002 in the same percentage of base salary equal to
the average percentage of base salary paid to all senior management who
report directly to the Chief Executive Officer as bonus with respect to
fiscal year 2002. Said bonus shall be paid to Executive in full within two
(2) weeks following the approval of bonuses for senior management by the
Company's Board of Directors.
(c) Welfare and Other Benefits. Unless otherwise specified below, upon
the Separation Date, Executive shall cease to participate in the Company's
employee benefit plans, pursuant to the terms and conditions of the plan
documents.
(i) Group Health Insurance Plans. As of the Separation Date, as
required by law, the Company shall offer Executive and his covered
dependents continuation of their coverage under the Company's group
health plans for a period of up to eighteen (18) months following the
Separation Date. If Executive and/or his covered dependents elect such
continuation coverage, the Company agrees to pay the COBRA premium on
the Executive's behalf for twelve (12) months following the Separation
Date; provided, however, that if Executive obtains comparable health
benefits from another source during such twelve (12) month period, the
Company shall cease payment of COBRA premiums on Executive's behalf.
At the end of the initial 12-month period of COBRA continuation
coverage, the Executive shall be responsible for the entire premium
under the Company's normal COBRA rates and procedures for the
remaining six (6) months of the COBRA period.
(ii) Stock Options. As of the Separation Date, Executive held
stock options under the Option Agreement to acquire shares of AirGate
PCS, Inc.'s common stock granted on July 28, 1999 (the "1999
Options"). The 1999 Options shall continue to become exercisable in
accordance with its terms. Notwithstanding the provisions of Section
1(b) of this Agreement, any unexercised incentive stock option held by
the Executive on January 30, 2003 shall automatically convert to a
nonqualified stock option as of that date.
(iii) Vested Benefits. Executive shall be entitled to any vested
benefits he may have under the AirGate PCS 401(k) Retirement Plan as
are applicable to him on the Separation Date. Such benefits will be
payable in accordance with and subject to the applicable terms and
conditions of such plans or agreements.
(iv) Unused Earned Vacation. By no later than three (3) weeks
following the date of execution of this Agreement, the Company shall
pay Executive, in a lump sum, an amount equal to his accrued but
unused 2002 vacation entitlement.
(v) Club Memberships. As of the Separation Date, any club,
association, or organization dues or expenses previously paid by the
Company on behalf of Executive shall cease.
(vi) Outplacement Services. The Company agrees to provide the
Executive with certain career transition services for a period of up
to 12 months through an outplacement service provider selected by the
Company. The outplacement services shall cease at the earlier of the
end of the 12-month period or the date the Executive accepts new
employment.
(vii) Other Benefits. Executive may retain his laptop computer,
attachments and PCS phone after the Separation Date; provided, that
the Executive shall return the laptop to the Company for the removal
of all licensed software and confidential information within ten (10)
days after the Separation Date.
(d) Acknowledgement. The parties hereto acknowledge and agree that the
payments and benefits described above may be taxable income, and each
hereby covenants to comply with all federal and state income and employment
tax requirements, including all reporting and withholding requirements,
relating thereto. Executive further acknowledges that the payments and
benefits described above are in exchange for his signing this Agreement.
3. Cooperation. Executive agrees that he will cooperate with and provide
assistance to the Company in the future regarding: (i) transition of any ongoing
matters relating to the business of Company, as may be reasonably requested by
Company from time to time; (ii) any litigation or criminal, civil or
administrative proceeding, whether currently pending or filed in the future,
arising out of or relating to matters about which Executive has knowledge or in
which Executive may be identified or called as a witness by any party; and (iii)
such other services as Company may reasonably request, as long as said services
to be rendered by Executive shall not materially impede his ability to meet any
obligations or duties he may have with his then current employer or company.
Such cooperation and assistance includes, without limitation, meeting with
Company representatives or the Company's legal counsel (or both) upon reasonable
notice and at mutually convenient times and places, providing complete and
truthful information in response to any inquiries of the Company and/or its
counsel, full disclosure and production of all documents and things that may be
relevant to any such matters (regardless of an express inquiry by the Company or
its counsel), and attendance as a witness at depositions, trials or similar
proceedings upon reasonable advance notice.
(a) Until October 31, 2003, Executive agrees to cooperate and perform
these services without additional compensation, other than actual
out-of-pocket costs incurred in connection with providing such services.
Thereafter, the Company agrees to pay the Executive an hourly rate of
compensation commensurate with his base salary with the Company as of the
Separation Date for any services performed by Executive on behalf of the
Company pursuant to the terms of this Agreement, except that no such
payment shall be made with regard to services of the Executive reasonably
requested by the Company related to any litigation filed prior to the
Separation Date. In addition and notwithstanding the foregoing, the Company
agrees to reimburse Executive for all reasonable related expenses,
including, but not limited to, transportation, lodging, meals, telephone
expenses, etc., including the same related to any litigation filed prior to
the Separation Date.
(b) Executive agrees that he will immediately notify Company of any
formal or informal inquiry or request for information directed to Executive
by any third-party that in any way relates to Executive's employment by
Company or any aspect of Company's business operation.
(c) Executive acknowledges and agrees that any and all complaints or
concerns about the Company's accounting, internal accounting controls or
auditing matters or other financial or strategic matters of which he is
aware have been disclosed to the General Counsel or the Vice President of
Human Resources as of the execution date of this Agreement. Executive is
neither aware of, nor suspects, any violation of any law, regulation,
statute, or ordinance of any kind resulting from his own conduct as an
employee of the Company or from the conduct of other employees or
operations of the Company. Executive further represents and affirms that he
has reported to the General Counsel or the Vice President of Human
Resources, any and all actual complaints communicated to him by anyone
regarding any alleged unlawful actions or omissions under the Company's
policies or law, regulation, statute or ordinance.
(d) Executive further represents and warrants that he will within 10
days of any written request therefor, provide to the Company complete,
accurate, and truthful responses to all requests made by the Company to him
for information relating to pending or future allegations against the
Company or its directors, officers and employees arising out of Xxxx
XxXxxxx vs. AirGate PCS, Inc., et al and Xxxxxx Xxxxxxx vs. AirGate PCS,
Inc. et al, and any related actions. In this regard, Executive acknowledges
his duty to provide only truthful information and to fully disclose all of
his knowledge of information responsive to the aforesaid requests, even if
he is not certain as to its accuracy or truth, provided that he so
qualifies the information.
(e) Company will not oppose Executive's efforts to obtain unemployment
compensation.
4. Restrictive Covenants. For and in consideration for the payment and
benefits provided to Executive under this Agreement, Executive agrees to the
terms of the following:
(a) Covenant Not to Compete. Executive covenants and agrees that,
during the period beginning on the Separation Date and ending one (1) year
thereafter, Executive will not, directly or indirectly (whether as owner,
partner, consultant, employee or otherwise) engage in the wireless
telecommunications business ("Business") in a senior management capacity
anywhere within the Service Area, as it is defined in the Sprint PCS
Management Agreement between SprintCom, Inc. and AirGate Wireless, L.L.C.,
dated July 22, 1998 and the Sprint PCS Management Agreement among
WirelessCo, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Illinois PCS,
LLC, dated January 22, 1999 (the "Territory"); provided that employment by
a provider of wireless telecommunications services shall not be a violation
of this Section 4(a) so long as 80% or more of the licensed POPs of the
provider in the territory in which Executive works or has responsibility
are outside the Territory. This paragraph 4(a) supersedes any other
covenants not to compete with the Company to which Executive may be a
party.
(b) Nondisclosure and Confidentiality. Executive acknowledges and
agrees that during the term of his employment, he has had access to trade
secrets and other confidential information unique to the business of the
Company and that the disclosure or unauthorized use of such trade secrets
or confidential information by Executive would injure the Company's
business. Therefore, Executive agrees that he will not, for a period of two
(2) years following the Separation Date, use, reveal or divulge any trade
secrets or any other confidential information which, while not trade
secrets or information unique to the Company's business, is highly
confidential and constitutes a valuable asset of the Company by reason of
the material investment of the Company's time and money in the production
of such information. Executive agrees that he will not use, reveal or
divulge any general confidential or customer-related information. Executive
acknowledges that he may have additional obligations with respect to the
Company's trade secrets pursuant to the Georgia Trade Secrets Act or other
applicable law.
(c) Nonsolicitation. Due to Executive's extensive knowledge of the
specifics of the Company's business, and its customers and clients,
Executive agrees that, in consideration of the payments and benefits he is
receiving hereunder, for a period of two (2) years following the Separation
Date, he will not, without the prior written consent of the Company, either
directly or indirectly, on his own behalf or in the service or on behalf of
others, solicit or contact any Restricted Customer for the purpose of
offering any product or service similar to or competitive with any product
or service sold by the Company during Executive's employment. For purposes
of this paragraph, "Restricted Customer" shall mean any person or entity
who transacted business with the Company during the year preceding the
Separation Date with whom Executive has (i) had direct contact during his
employment, (ii) been a party to marketing or sales strategies with regard
to, or (iii) been privy to marketing or sales strategies with regard to
such persons or entities.
Executive agrees that in consideration for the payments and benefits
he is receiving hereunder, for a period of two (2) years following the
Separation Date, he will not, either directly or indirectly, on his own
behalf or in the service or on behalf of others solicit, divert or hire
away, or attempt to solicit, divert or hire away any person employed by the
Company.
5. Confidentiality of Agreement. Executive and the Company understand and
agree that, due to the sensitive nature of this matter, the terms of this
Agreement are to be kept private and confidential and that the terms of this
Agreement shall not be disclosed, unless the party(ies) is (are) required by law
to do so. While not limiting the generality of the foregoing, disclosure
includes any statement, written or oral, to any person, including, but not
limited to, any current or former employees of the Company. The parties to this
Agreement acknowledge that there will be circumstances under which some or all
of the terms of this Agreement will have to be made known to some individuals in
the regular course of conducting business and personal affairs. In keeping with
that understanding, the Company agrees that Executive may discuss the terms of
this agreement with his attorneys, accountants, tax advisors and his immediate
family. Executive agrees to advise such individuals of the confidentiality
provisions of this Agreement and will advise anyone so named of the requirement
to keep the terms of this Agreement confidential. Should Executive disclose any
of the terms of this Agreement to persons (whether entities or individuals)
other than those specified in this section, then such actions shall constitute a
breach on the part of Executive.
6. Nondisparagement. Executive agrees that he shall not make any untrue
statement or criticism, written or oral, nor take any action which is adverse to
the interests of the Company or that would cause the Company, its affiliates,
subsidiaries, divisions or its current and former officers, directors,
employees, agents, or shareholders embarrassment or humiliation or otherwise
cause or contribute to such persons being held in disrepute by the public or the
Company's clients, customers, or employees. From and after the date of execution
of this Agreement, Executive shall refrain from discussing the terms and
conditions of the termination of the Executive's employment with any employee,
agent, client or customer of the Company, and except as required by any court or
any applicable law or regulation, the Company shall refrain from discussing the
terms and conditions of the termination of the Executive's employment with any
third party. The Company agrees that it shall not make any untrue statement or
criticism, written or oral, nor take any action which is adverse to the
interests of Executive or that would cause Executive embarrassment or
humiliation or otherwise cause or contribute to his being held in disrepute by
the public or the Company's clients, customers or employees. The obligations
under this Section shall survive the termination of this Agreement.
7. Return of Company Documents and Property. Executive hereby represents
and warrants that, as of the Separation Date, he has returned to the Company all
documents (including copies and computer records thereof) of any nature which
relate to or contain information concerning Company, its customers, or
employees, and any and all property of the Company which has been in his
possession, including, except as otherwise herein provided, any computers,
computer programs or limited use software licenses in his possession. Executive
confirms that all confidential information is and shall remain the exclusive
property of the Company. All business records, papers and documents kept or made
by Executive relating to the business of the Company shall be and remain the
property of the Company, except for such papers customarily deemed to be the
personal copies of Executive. Information in the public domain or information
that is commonly known by or available to the public through the Company's press
releases, public documents, annual reports, SEC filings or other public filings
shall not be considered proprietary or confidential information.
8. Remedies. Executive acknowledges and agrees that his breach of any of
the covenants contained in Sections 4, 5, 6 or 7 of this Agreement will cause
irreparable injury to the Company and that remedies at law available to the
Company for any actual or threatened breach by Executive of such covenants will
be inadequate and that the Company shall be entitled to specific performance of
the covenants or injunctive relief against activities in violation of Sections
4, 5, 6 or 7 by temporary or permanent injunction or other appropriate judicial
remedy, writ or order, without the necessity of proving actual damages. This
provision with respect to injunctive relief shall not diminish the right of the
Company to claim and recover monetary damages against Executive for any breach
of this Agreement, in addition to injunctive relief. Moreover, in the event of a
breach by Executive of one or more of the covenants contained in Sections 4, 5,
6 or 7, the Company shall have no obligation to make any further payments
specified in Section 2(a), 2(b) and 2(c)(i) hereof. The Company stipulates and
agrees that in the event that it fails to timely and fully pay to Executive all
amounts owed to Executive or fulfill and timely discharge all of the duties of
the Company pursuant to the terms of Section 2 hereinabove, then Executive shall
have no further remaining obligations or duties whatsoever to the Company
pursuant to Sections 3 and 4 of this Agreement. The Company further agrees that
in the event that a bankruptcy case is commenced by or against the Company under
the bankruptcy laws of the United States, then the Company shall forthwith file
with the bankruptcy court a motion to assume this Agreement, and all costs
related to such motion shall be borne solely by the Company. The parties
acknowledge and agree that the covenants contained herein shall be construed as
agreements independent of any other provision of this or any other contract
between the parties hereto, and that the existence of any claim or cause of
action by either party against the other, whether predicated upon this or any
other contract, shall not constitute a defense to the enforcement by either
party of said covenant.
9. Release Of All Claims And Potential Claims Against the Company and
Covenant Not To Xxx. In consideration of the payments made to him by the Company
and the promises contained in this Agreement, Executive, on behalf of himself
and his agents, heirs and assigns, hereby unconditionally releases and
discharges the Company, and its past and present successors, subsidiaries,
parent corporations, members, managers, owners, partners, lenders, advisors,
assigns, affiliated companies, agents, legal representatives, attorneys,
employees, officers, trustees and directors (the "Releasees") from all claims,
liabilities, contracts, contractual obligations, attorneys' fees, demands and
causes of action, whether known or unknown, fixed or contingent, that he may
have or claim to have against the Company or any of the Releasees for any reason
as of the date of execution of this Agreement, and hereby agrees not to file a
lawsuit or other legal claim or charge to assert any claim against any of the
Releasees except as may be required to enforce this Agreement and Release;
provided, however, that (i) nothing contained in this Agreement and Release
shall in any way diminish or impair any rights to indemnification that may exist
from time to time under the Indemnification Agreement dated May 14, 1999 (the
"Indemnification Agreement") and under the Certificate of Incorporation of the
Company and (ii) nothing contained in this Agreement and Release shall in any
way diminish or impair Executive's ability to raise an affirmative defense in
connection with any lawsuit or other legal claim or charge instituted or
asserted by the Company against Executive. This release and covenant not to xxx
includes, but is not limited to, claims for infliction of emotional distress,
claims for defamation, claims for personal injury of any kind, claims for breach
of contract, claims for harassment, claims for attorneys' fees, claims arising
under federal, state or local laws prohibiting employment discrimination and
claims growing out of any legal restrictions on the Company's rights to
terminate its employees or to take any other employment action, whether
statutory, contractual or arising under common law or case law. Executive
specifically acknowledges and agrees that he is releasing, in addition to all
other claims, any and all rights under federal and state employment laws
including without limitation the Age Discrimination in Employment Act of 1967
("ADEA"), as amended, 29 X.X.X.xx. 621, et seq., the Civil Rights Act of 1964
("Title VII"), as amended (including amendments made through the Civil Rights
Act of 1991), 42 U.S.C. ss. 2000e, et seq., 42 X.X.X.xx. 1981, as amended, the
Americans With Disabilities Act ("ADA"), as amended, 42 U.S.C. ss. 12101, et
seq., the Rehabilitation Act of 1973, as amended, 29 X.X.X.xx. 701, et seq.,
Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29
X.X.X.xx. 301, et seq., the Worker Adjustment and Retraining Notification Act,
29 X.X.X.xx. 2101, et seq., the Family and Medical Leave Act of 1993 ("FMLA"),
as amended, 29 X.X.X.xx. 2601 et seq., the Fair Labor Standards Act ("FLSA"), as
amended, 29 X.X.X.xx. 201 et seq. the Employee Polygraph Protection Act of 1988,
29 X.X.X.xx. 2001, et seq., all Georgia Code provisions and the state and
federal workers' compensation laws. This provision specifically shall not
release any claims arising under or by virtue of this Agreement.
10. Indemnification of Executive. The Executive shall be indemnified by the
Company as provided under the terms and conditions of that certain
Indemnification Agreement dated May 14, 1999, and the Certificate of
Incorporation of the Company.
11. Acknowledgment. The Company hereby advises Executive to consult with an
attorney prior to executing this Agreement. Executive expressly acknowledges and
agrees that he has read this Agreement and Release carefully, that he has had
ample time and opportunity to consult with an attorney or other advisor of his
choosing concerning his execution of this Agreement, that he fully understands
that this Agreement is final and binding, that it contains a release of
potentially valuable claims, and that the only promises or representations he
has relied upon in signing this Agreement are those specifically contained in
this Agreement itself. Executive also acknowledges and agrees that he has been
offered at least twenty-one (21) days to consider this Agreement before signing
and that he is signing this Agreement voluntarily, after having the opportunity
to consult with his attorney, with the full intent of releasing the Company from
all claims. Executive further acknowledges and agrees that he may revoke this
Agreement within seven (7) days after signing it, by delivering written notice
of revocation to the General Counsel of the Company. Accordingly, this Agreement
shall not become effective until the expiration of the seven-day revocation
period.
12. Assignment and Successors.
(a) This Agreement is personal to Executive and, without the prior
written consent of the Company, shall not be assignable by Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
13. Miscellaneous.
(a) No Admission of Wrongdoing. This Agreement does not constitute an
admission of wrongdoing or liability by either party.
(b) Waiver. Failure of either party to insist, in one or more
instances, on performance by the other in strict accordance with the terms
and conditions of this Agreement shall not be deemed a waiver or
relinquishment of any right granted in this Agreement or of the future
performance of any such term or condition or of any other term or condition
of this Agreement, unless such waiver is contained in a writing signed by
the party making the waiver.
(c) Severability. If any provision or covenant, or any part thereof,
of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability
of the remaining provisions or covenants, or any part thereof, of this
Agreement, all of which shall remain in full force and effect.
(d) Governing Law. Except to the extent preempted by federal law, and
without regard to conflict of laws principles, the laws of the State of
Georgia shall govern this Agreement in all respects, whether as to its
validity, construction, capacity, performance or otherwise. Any legal
action regarding this Agreement or the provisions hereof shall be brought
in a court of competent jurisdiction in or including Xxxxxx County,
Georgia.
(e) Entire Agreement. The parties agree that this document is their
entire agreement regarding Executive's employment, separation from
employment and Executive's release of claims. This Agreement supersedes all
other agreements between Executive and any Releasee, including the Company;
provided, however, that this Agreement does not supersede the
Indemnification Agreement.
(f) Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given if delivered personally or three days after mailing if
mailed, first class, certified mail (return receipt requested), postage
prepaid:
To Company: AirGate PCS, Inc.
Xxxxxx Tower
000 Xxxxxxxxx Xxxxxx XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
To Executive: Xx. Xxxx Xxxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Either party may change the address to which notices, requests,
demands and other communications shall be delivered or mailed by giving
notice thereof to the other party in the same manner provided herein.
(g) Amendments and Modifications. This Agreement may be amended or
modified only by a writing signed by both parties hereto, which makes
specific reference to this Agreement.
(h) Construction. Each party and his or its counsel have reviewed this
Agreement and have been provided the opportunity to revise this Agreement
and accordingly, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement. Instead, the language of
all parts of this Agreement shall be construed as a whole, and according to
its fair meaning, and not strictly for or against either party.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Separation and Release Agreement as of the date first above written.
AIRGATE PCS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxxx, President and CEO
EXECUTIVE:
/s/ Xxxx X. Xxxxxxxxx
---------------------
Xxxx X. Xxxxxxxxx
[THIS DOCUMENT HAS BEEN EXECUTED IN DUPLICATE.]
