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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of May 15, 1996 (the "Agreement")
is made by and between Metrocall, Inc., a Delaware corporation (the "Company")
and XXXXXXX X. XXXXX (the "Executive"). The employment agreement between the
Company and the Executive dated as of June 1, 1993 and amended as of January 1,
1996 is hereby canceled and replaced with this Agreement.
WHEREAS, in consideration of the Executive's service to the Company as
Chief Financial Officer of the Company and the Executive's agreement not to
compete with the Company, the Company and the Executive desire to enter into
this Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the covenants
and agreements set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:
1. Employment. The Company agrees to continue to employ the Executive
and the Executive agrees to remain employed by the Company as the
Chief Financial Officer of the Company based upon the terms and
conditions set forth in this Agreement, for the period of time
specified in Section 3. In such position, the Executive shall report
directly to the Chief Executive Officer.
2. Duties and Authority. During the term of this Agreement, as Chief
Financial Officer of the Company, under the direction and subject to
the control of the Chief Executive Officer, the Executive shall be
responsible for the financial operations of the Company and shall have
general executive charge, management, and control of financial
management of the Company, with all such powers and authority with
respect to such business, affairs, properties, and operations as may
be reasonably incident to such duties and responsibilities. During
the term of this Agreement, the Executive shall have such powers,
authority, functions, and responsibilities for the Company and
corporations affiliated with the Company as he possessed as of May 1,
1996 and such additional duties, powers, authority, functions, and
responsibilities as the Chief Executive Officer shall assign to him
that do not (except with the Executive's consent) interfere with, or
detract from, those vested in or being performed by the Executive for
the Company as of the beginning of the term of this Agreement. The
Executive shall devote the Executive's
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reasonable best efforts and full business time to the performance of
the Executive's duties and the advancement of the business and affairs
of the Company.
3. Term. The term of this Agreement and the period of employment of the
Executive by the Company hereunder shall commence on the date of this
Agreement and shall end on December 31, 1999; provided, however, that
the term shall be automatically extended for additional one (1) year
periods on each anniversary date of this Agreement, unless and until
either party notifies the other party not less than ninety (90) days
before such anniversary date that such party is terminating this
Agreement, which termination shall be effective as of the end of such
initial term or extended term, as the case may be (the "Expiration
Date"), or until sooner terminated as hereinafter set forth.
4. Salary and Expenses.
(a) In consideration for the Executive's services, the Company
shall pay to the Executive an annual base salary (the "Base
Salary") equal to Two Hundred Twenty-Five Thousand Dollars
($225,000). The Base Salary shall be payable biweekly or in
such other installments as shall be consistent with the
Company's payroll procedures. The Company shall deduct and
withhold all necessary social security and withholding taxes
and any other similar sums required by law or authorized by
the Executive with respect to the payment of the Base Salary.
The Board shall review the Executive's salary annually before
December 31 and may increase, but not decrease, his Base
Salary in any renewal, extension, or replacement of this
Agreement. The Company shall review the appropriateness of
creating additional forms of nonqualified executive
compensation to cover the Executive.
(b) To the maximum extent permitted by applicable state and
federal law, the Executive shall be eligible, at no cost to
the Executive, to participate in all of the Company's benefit
plans, including fringe benefits available to the Company's
senior executives and use of an automobile suitable for a
senior executive of a public company.
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(c) The Executive shall be entitled to (i) time off for all public
holidays observed by the Company and (ii) vacation days in
accordance with the applicable policies for the Company's
senior executives.
(d) The Company shall reimburse the Executive for all reasonable
expenses the Executive incurs in accordance with the
guidelines adopted from time to time by the Company.
5. Confidential Information.
(a) The Executive covenants and agrees that the Executive will not
at any time, without the prior written consent of the Board or
a person authorized by the Board, publish or disclose to any
third party, use for the Executive's own benefit or advantage,
or make available for others to use, any confidential
information with respect to any of the Company's products,
services, subscribers, suppliers, marketing techniques,
methods, or future plans disclosed to the Executive as a
result of the Executive's employment with the Company, to the
extent such information has heretofore remained confidential
(except for unauthorized disclosures) and except as otherwise
ordered by a court of competent jurisdiction.
(b) The Executive acknowledges that the restrictions contained in
Section 5(a) are reasonable and necessary, in view of the
nature of the Company's business, in order to protect the
legitimate interests of the Company, and that any violation
thereof would result in irreparable injury to the Company.
Therefore, the Executive agrees that in the event of a breach
or threatened breach by the Executive of the provisions of
Section 5(a), the Company shall be entitled to obtain from any
court of competent jurisdiction, preliminary or permanent
injunctive relief restraining the Executive from disclosing or
using any such confidential information. Nothing herein shall
be construed as prohibiting the Company from pursuing any
other remedies available to it for such breach or threatened
breach, including, without limitation, recovery of damages
from the Executive.
6. Covenant Not to Compete. The Executive agrees that, through
the position of Chief Financial Officer, the Executive has
established valuable and recognized expertise in the
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paging business and has had and will have access to the trade secrets
and confidential information of the Company. The Executive hereby
enters into a covenant restricting the Executive from soliciting
employees of the Company and from competing against the Company (the
"Covenant Not to Compete") upon the terms and conditions described
below:
(a) During the Executive's employment and for twelve (12) months
thereafter, the Executive agrees that the Executive will not,
without the prior written consent of the Company:
(i) induce or attempt to induce any of the Company's
employees to terminate their employment with the
Company in order to become an director, officer,
employee, consultant, or independent contractor to or
for any enterprise with which the Executive has an
interest, whether as a proprietor, partner,
shareholder, employee, agent, director, or officer;
(ii) at any time and in any state or other jurisdiction in
the United States in which the Company is engaged in
business or, during the Executive's employment, has
developed plans to engage in business: (1) engage in,
including as a director, agent, or representative, or
have any direct or indirect financial interest
(whether as a partner, shareholder, or owner) in any
enterprise that engages in, the business of owning
and operating one-way paging and wireless messaging
networks, voice mail services or data transmitting
services (the "Business"); or (2) participate as an
employee or officer in any enterprise in which the
Executive's responsibility relates to the Business.
The ownership by the Executive of less than five
percent (5%) of the outstanding equity securities of
any corporation, partnership, limited liability
company, trust, or other entity shall not be deemed a
violation of this Section 6(a)(ii).
(iii) solicit or cause or encourage any person to solicit
any Business in competition with the Company from any
person who is a client of the Company during the
Executive's employment hereunder.
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(b) The Executive agrees that the restrictions set forth in this
Section 6 are reasonable, proper, and necessitated by
legitimate business interests of the Company and do not
constitute an unlawful or unreasonable restraint upon the
Executive' ability to earn a livelihood. The parties agree
that in the event any of the restrictions in this Agreement,
interpreted in accordance with the Agreement as a whole, are
found to be unreasonable a court of competent jurisdiction,
such court shall determine the limits allowable by law and
shall enforce the same.
(c) The Executive further acknowledges that it may be impossible
to assess the monetary damages incurred by the Executive's
violation of this Agreement, and that violation of this
Agreement will cause irreparable injury to the Company.
Accordingly, the Executive agrees that the Company will be
entitled, in addition to all other rights and remedies that
may be available, to an injunction enjoining and restraining
the Executive and any other involved party from committing a
violation of this Agreement. In addition, the Company will be
entitled to such damages as it can demonstrate it has
sustained by reason of the violation of this Agreement by the
Executive and/or others. However, recourse to any remedy
hereunder shall not constitute an exclusive remedy for the
Company, but rather the Company may resort to other remedies
or a combination of remedies as it may choose. The Executive
and the Company also agree in the event that either party is
successful in whole or in part in any legal action against the
other party under this Agreement, that the successful party
will be entitled to payment of all costs, including reasonable
attorney's fees, from the other party.
7. Termination. Notwithstanding any other provision of this Agreement,
this Agreement shall terminate upon the death of the Executive, or it
may be terminated with thirty (30) days' written notice as follows:
(a) The Company may terminate this Agreement under the following
circumstances:
(i) if the Executive is unable to perform any services by
reason of illness, physical, or mental disability, or
other similar incapacity ("Disability") that
continues for more than six (6) consecutive months;
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(ii) or for "Cause." For purposes of this Agreement,
"Cause" means (A) dishonesty of a material nature
that relates to the performance of services under
this Agreement, (B) criminal conduct (other than
minor infractions and traffic violations) that
relates to the performance of services under this
Agreement, or (C) the Executive's willfully breaching
or failing to perform his duties as described in
Section 2 hereof, which act or omission results in a
material adverse effect on the Company. No act or
failure to act on the Executive's part shall be
deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without
reasonable belief that such action or omission was in
the best interests of the Company. Notwithstanding
the foregoing, the Executive shall not be deemed to
have been terminated for Cause unless and until there
shall have been delivered to the Executive a
certificate of a resolution duly adopted by the
affirmative vote of not less than seventy-five
percent (75%) of the entire membership of the Board
at a meeting of the Board called and held for such
purpose (after reasonable notice to the Executive and
an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board),
finding that in the good faith opinion of the Board,
the Executive has engaged in the conduct set forth in
this paragraph and specifying the particulars thereof
in detail.
(b) The Executive may terminate this Agreement at any time upon
sixty (60) days' prior written notice.
(c) Any purported termination of the Executive's employment by the
Company or by the Executive shall be communicated by written
Notice of Termination to the other party hereto in accordance
with Section 9. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the
specific provision of this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's
employment under the provision so indicated.
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8. Compensation Upon Termination.
(a) Death. If the Executive's employment is terminated by the
Executive's death, the Company shall pay to the Executive's
estate, or as may be directed by the legal representatives to
such estate, (i) the Executive's full Base Salary through the
Executive's date of death and all other unpaid amounts, if
any, to which the Executive is entitled as of the Executive's
date of death, under any Company fringe benefit or incentive
compensation plan or program, at the time such payments would
otherwise ordinarily be due; and (ii) the Executive's full
Base Salary that would have been payable to the Executive from
the Executive's date of death through the Expiration Date, in
a lump sum within forty-five (45) days after his death.
(b) Disability. During any period that the Executive fails to
perform the Executive's duties hereunder as a result of
incapacity due to Disability (the "Disability Period"), the
Executive shall continue to receive (i) the Executive's full
Base Salary through the Executive's date of disability and all
other unpaid amounts, if any, to which the Executive is
entitled as of the Executive's date of disability, under any
Company fringe benefit or incentive compensation plan or
program, at the time such payments are due; and (ii) the
Executive's full Base Salary that would have been payable to
the Executive from the Executive's date of disability through
the Expiration Date, at the time such payments would otherwise
ordinarily be due; provided, however, that any payments made
to the Executive during the Disability Period shall be reduced
by any amounts paid or payable to the Executive under any
Company disability benefit plans.
(c) For Cause. If the Company terminates the Executive's
employment for Cause, the Company shall pay the Executive's
full Base Salary through the date specified in the Notice of
Termination and the Company shall have no further obligations
to the Executive under this Agreement.
(d) Voluntary. If the Executive terminates his employment for
other than Good Reason, the Company shall pay the Executive
the Executive's full Base Salary through the date specified in
the Notice of Termination and from the date of termination
through the earlier of (I) one (1) year from the date of
termination or
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(ii) the Expiration Date, at the time such payments would
otherwise ordinarily be due.
"Good Reason" means the occurrence, without the Executive's
express written consent, of any of the following circumstances:
(i) the Company's failure to perform or observe
any of the material terms or provisions of
this Agreement or of the Metrocall, Inc.
Change of Control Agreement for Chief
Financial Officer dated of even date herewith
(the "Change of Control Agreement"), and the
continued failure of the Company to cure such
default within fifteen (15) days after the
Executive gives a written demand for
performance to the Company, which demand
shall describe specifically the nature of
such alleged failure to perform or observe
such material terms or provisions;
(ii) the assignment to the Executive of any duties
inconsistent with, or any substantial
diminution in, such Executive's status or
responsibilities as in effect on the date
hereof, including imposition of travel
obligations that differ materially from
required business travel as of the date
hereof;
(iii) any diminution in the status or
responsibilities of the Executive's position
from that which existed as of the date
hereof, whether by reason of the Company's
ceasing to be a public company under the
Securities Exchange Act of 1934, becoming a
subsidiary of a successor public company, or
otherwise;
(iv) (I) a reduction in the Executive's Base
Salary as in effect on the date hereof, as
that amount may be increased from time to
time; or (II) the failure to pay a bonus
award to which the Executive is otherwise
entitled under any short-term incentive plan
in which the Executive then participates, at
the time such awards are usually paid;
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(v) the termination of employment of Xxxxxxx X.
Xxxxxxx, III or Xxxxxx X. Xxxxxx (other than
a termination (I) by the Company for "Cause"
or (II) because of death or "Disability" as
those terms are defined in their respective
employment agreements), including a
termination that results from a failure by
the Company and Xxxxxxx or Xxxxxx to reach
agreement to continue Xxxxxxx' or Xxxxxx'x
employment on terms at least as favorable to
him, in the aggregate, as those in effect
when his then existing employment agreement
expired;
(vi) a change in the principal place of the
Executive's employment, as in effect on the
date hereof, or as in effect after any
subsequent change to which the Executive
consented in writing, to a location more than
thirty-five (35) miles distant from the
location of such principal place;
(vii) (I) the Company's failure to continue in
effect any incentive compensation plan or
stock option plan in which the Executive
participates, unless the Company has provided
an equivalent alternative compensation
arrangement (embodied in an ongoing
substitute or alternative plan) to the
Executive, or (II) the Company's failure to
continue the Executive's participation in any
such incentive or stock option plan on
substantially the same basis, both in terms
of the amount of benefits provided and the
level of the Executive's participation
relative to other participants, as of the
date hereof or as of any succeeding December
31;
(viii) the Company's violation of any applicable
criminal law not due to the Executive's gross
negligence or willful misconduct;
(ix) the failure of the Company or any successor
to obtain a satisfactory written agreement
from any successor to assume and agree to
perform this Agreement, as contemplated in
Section 12 below; or
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(x) any purported termination of the Executive's
employment that is not effected pursuant to a
Notice of Termination satisfying the
requirements of Sections 7(a)(ii) and 7(c) as
applicable. For purposes of this Agreement,
no such purported termination shall be
effective except as constituting Good Reason.
The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any
circumstances constituting Good Reason hereunder.
(e) Other. Except as otherwise provided in Section 8(f) for
terminations after a Change in Control, if the Company
terminates the Executive's employment other than for Cause or
Disability (under Section 8(b) hereof), or if the Executive
terminates employment with the Company for Good Reason, the
Company shall pay the Executive
(i) the Executive's full Base Salary through the date
specified in the Notice of Termination within two (2)
days after such date and all other unpaid amounts, if
any, to which the Executive is entitled as of the
date specified in the Notice of Termination, under
any Company fringe benefit or incentive compensation
plan or program, at the time such payments are due;
(ii) the full Base Salary and any other amounts that would
have been payable to the Executive hereunder from the
date specified in the Notice of Termination through
the Expiration Date within forty-five (45) days after
such date; and
(iii) in lieu of exercising or retaining any rights the
Executive may have to exercise some or all of the
outstanding stock options that he then holds
(including any rights to exercise stock options that
arise during the Term if he were to remain employed
and including any that would otherwise terminate as
result of his termination of employment), the
Executive may elect within sixty (60) days after
termination of employment to surrender such rights to
the Company and receive in exchange therefor a cash
payment equal to the aggregate difference, if
positive, between (a) the
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"fair market value" (determined as of the date of
termination using the higher of the "fair market
value" (i) as defined in the terms of the applicable
option plan or option agreement as of the date of
termination and (ii) as defined in the plan or
agreement on the date of grant) of the shares of
common stock subject to the options and (b) the
option prices of the shares subject to such
surrendered options; and the Company shall make such
payment within forty-five (45) days after the
Executive notifies the Company of his election to
surrender all or a portion of his options.
(f) Termination of Employment after a Change in Control. If,
after a Change of Control (as defined in the Change of Control
Agreement), the Company terminates the Executive's employment
other than for Cause or Disability, or if the Executive
terminates employment with the Company for Good Reason after a
Change of Control, Executive's compensation and benefits shall
be exclusively determined by the terms of the Change of
Control Agreement as then in effect.
(g) Mitigation. The Executive shall not be required to mitigate
amounts payable pursuant to this section by seeking other
employment or otherwise.
9. Notices. All notices, demands, requests, or other communications
required or permitted to be given or made hereunder shall be in
writing and shall be delivered, telecopied, or mailed by first class
registered or certified mail, postage prepaid, addressed as follows:
(a) if to the Company:
Metrocall, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, III
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with a copy (which shall not constitute notice) to
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxxx
(a) if to the Executive:
Xxxxxxx X. Xxxxx
00000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
or to such other address as may be designated by either party in a
notice to the other. Each notice, demand, request, or other
communication that shall be given or made in the manner described
above shall be deemed sufficiently given or made for all purposes
three (3) days after it is deposited in the U.S. mail, postage
prepaid, or at such time as it is delivered to the addressee (with the
return receipt, the delivery receipt, the answer back or the affidavit
of messenger being deemed conclusive evidence of such delivery) or at
such time as delivery is refused by the addressee upon presentation.
10. Severability. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement, which shall
remain in full force and effect.
11. Survival. It is the express intention and agreement of the parties
that the provisions of Section 5 shall survive three (3) years after
the termination of this Agreement.
12. Assignment; Successors. The rights and obligations of the parties to
this Agreement shall not be assignable, except that the rights and
obligations of the Company hereunder shall be assignable in connection
with any subsequent merger, consolidation, sale of substantially all
of the assets of the Company, or similar reorganization of a
successor. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company is required to perform
it. Failure
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of the Company to obtain such assumption and agreement before the
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the
Company as provided in Section 6 of the Change of Control Agreement.
13. Binding Effect. Subject to any provisions restricting assignment,
this Agreement shall be binding upon the parties and shall inure to
the benefit of the parties and their respective heirs, devisees,
executors, administrators, legal representatives, successors, and
assigns.
14. Amendment; Waiver. This Agreement shall not be amended, altered or
modified except by an instrument in writing duly executed by the both
parties. Neither the waiver by either of the parties of a breach of
or a default under any of the provisions of this Agreement, nor the
failure of either of the parties, on one or more occasions, to enforce
any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall thereafter be construed as a waiver of any
subsequent breach or default of a similar nature, or as a waiver of
any such provisions, rights, or privileges.
15. Headings. Section headings contained in this Agreement are inserted
for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction, or scope of any of the provisions of
this Agreement.
16. Governing Law. This Agreement, the rights and obligations of the
parties, and any claims or disputes arising from this Agreement, shall
be governed by and construed in accordance with the laws of the
Commonwealth of Virginia (but not including the choice of law rules
thereof).
17. Entire Agreement. This Agreement and the Change of Control Agreement
constitute the entire agreement between the parties with respect to
the subject matter hereof and thereof, and supersede all prior oral or
written agreements, commitments, or understandings with respect to the
matters provided for in this Agreement and the Change of Control
Agreement.
18. Arbitration. The Executive may designate in writing to the Company (in
which case this Section 18 shall have effect but not otherwise) that
any dispute that may arise directly or
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indirectly in connection with this Agreement, the Executive's
employment, or the termination of the Executive's employment, whether
arising in contract, statute, tort, fraud, misrepresentation, or other
legal theory, shall be determined solely by arbitration in Washington,
D.C. under the rules of the American Arbitration Association (the
"AAA"). The only legal claims between the Executive, on the one hand,
and the Company or any Subsidiary, on the other, that would not be
included in this agreement to arbitration are claims by the Executive
for workers' compensation or unemployment compensation benefits,
claims for benefits under a Company or Subsidiary benefit plan if the
plan does not provide for arbitration of such disputes, and claims by
the Executive that seek judicial relief in the form of specific
performance of the right to be paid until the termination date during
the pendency of any dispute or controversy arising under Section
7(a)(ii). If this Section 18 is in effect, any claim with respect to
this Agreement, the Executive's employment, or the termination of the
Executive's employment must be established by a preponderance of the
evidence submitted to the impartial arbitrator. A single arbitrator
engaged in the practice of law shall conduct any arbitration under the
then current procedures of the AAA and under the AAA's then current
Model Employment Arbitration Rules. The arbitrator shall have the
authority to order a pre-hearing exchange of information by the
parties including, without limitation, production of requested
documents, and examination by deposition of parties and their
authorized agents. If this Section 18 is in effect, the decision of
the arbitrator (i) shall be final and binding, (ii) shall be rendered
within ninety (90) days after the impanelment of the arbitrator, and
(iii) shall be kept confidential by the parties to such arbitration.
The arbitration award may be enforced in any court of competent
jurisdiction. The Federal Arbitration Act, 9 U.S.C. Section Section
1-15, not state law, shall govern the arbitrability of all claims.
19. Cancellation of Previous Agreements. In consideration of this
Agreement, the Executive hereby waives any and all rights under and
releases, and indemnifies and holds the Company and its successors and
assigns, harmless from any damage, loss, liability, judgment, fine,
penalty, assessment, settlement, cost, or expense including, without
limitation, reasonable expenses of investigation, reasonable
attorneys' fees and other reasonable legal costs and expenses incident
to any of the foregoing or to the enforcement of this Section, whether
or not suit is brought or, if brought, whether or not such suit is
successful, in whole or in part arising out of or relating to any and
all employment, consulting, non-competition, bonus, or other
compensatory plan, program,
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arrangement, or contract relating to the employment of the Executive,
written or oral, between the Executive and the Company or any person
affiliated with the Company, and the Executive consents to the
termination of each such agreement and arrangement effective as of the
date of this Agreement; provided, however, that nothing herein shall
constitute a termination or waiver of the Change of Control Agreement.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which
shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Agreement to be duly executed, on their behalf as of the
day and year first hereinabove written.
METROCALL, INC.
Date: May 15, 1996 By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Chairman of the Board
Date: May 15, 1996 /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
| | Executive's Copy
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| | Company's Copy
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