EXHIBIT NO. 10.2
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into on January 26,
1996 by and between XXXXXX X. XXXXX ("Employee") and PEOPLE'S CHOICE TV CORP., a
Delaware corporation (the "Company").
R E C I T A L S:
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A. The Company is in the business of developing, owning and operating
wireless cable television systems and conducting various other activities
associated therewith (the "Business").
B. The Company desires to employ Employee as its Vice President and
Employee desires to be so employed by the Company, on the terms and conditions
set forth herein.
C. The Company desires to bind Employee to certain restrictive covenants
and Employee agrees to be so bound, on the terms and conditions set forth
herein.
A G R E E M E N T:
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment Term.
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Subject to the terms and conditions set forth herein, including Section 11,
the Company will employ Employee and Employee will serve as Vice President for a
three (3) year term commencing on the date hereof (the "Effective Date") and
ending on the third anniversary of the Effective Date (the "Employment Term").
2. Employment Duties.
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During the Employment Term, Employee will serve as Vice President
subject to the terms of this Agreement and the direction and control of the
Chairman and Chief Executive Officer and President of the Company. Employee
shall, during the Employment Term, perform such duties for the Company and its
subsidiaries as may be assigned by the President from time to time and serve the
Company faithfully, diligently and competently and to the best of his ability.
Employee's duties as assigned by the President will be similar to those duties
performed by Employee in his previous capacity as President of Sat-Tel Services,
Inc. The Company will provide the Employee with a staff of employees necessary
for the Employee to efficiently and properly implement and carry our his duties
and responsibilities. During the term of this Agreement, Employee will reside
and have his permanent residence in Tucson, Arizona and shall
not be required to move his residence as part of this Agreement. Employees
primary place of work shall be located at the Company's offices in Tucson,
Arizona. Nothing in this agreement shall be construed as preventing Employee
from investing his assets in such form or manner as will not require any
services on his part in the operation of the affairs of the business
organization in which such investments are made, including, but not limited to
Employee's interest in MIS/RAY Partners.
3. Compensation.
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(a) Salary. In exchange for Employee's services hereunder, during
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the Employment Term, the Company shall pay to Employee for services rendered by
Employee under this Agreement an annual salary of One Hundred Twenty-Five
Thousand Dollars ($125,000), or such higher salary as approved by the Chairman
and President of the Company in their sole discretion. Such Salary shall be
payable in arrears not less frequently than monthly, but otherwise in accordance
with the Company's ordinary payment practices.
(b) Bonus. In addition, the Employee shall be entitled to a yearly
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bonus of up to Fifty Thousand Dollars ($50,000.00) based on the following
criteria:
(1) Completion Rate Increase
(2) Quality Control and Trouble Call Decrease
(3) Lower Cost per Install
The amount of the bonus will be determined by the Chief Executive Officer, the
President and the Chief Financial Officer based on their assessment of the
improvements made in the above three areas. The amount of bonus will be
determined on a good faith basis, based on their objective assessments.
(c) Stock Options. The Employee shall be given stock options in the
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stock of the Company, according to the terms of the Stock Option Agreement,
attached hereto as Exhibit A.
4. Benefits During the Employment Term.
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(a) Employee shall be entitled during the Employment Term to participate
in such employee benefit plans and programs, including, health
insurance plans and the Company's 401(k) plan, as described in the
Associate Handbook of People's Choice TV (the "Handbook"). For purposes
of Company benefits, including vacations, holidays and personal time,
Employee shall be given credit for the time since January, 1991 that
the Employee has been employed by Sat-Tel Services, Inc. The Company
does not promise the adoption or continuance of any particular plan or
program during the Employment Term, and Employee's (and his
dependents') participation in any such plan or program shall be subject
to the provisions, rules, regulations and laws applicable thereto. At
the sole cost and
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expense of the Company, the Employee shall be provided family medical
and hospitalization insurance coverage as agreed and described in the
Stock Purchase Agreement executed by and between the Company, Employee
and Xxxxxxx Xxxxxxxxx.
(b) Employee shall also be entitled to be paid for Company holidays and
vacation, personal, and sick days as provided in the Handbook.
(c) Employee shall receive a car allowance of Eight Thousand Dollars
($8,000) per year to be paid every other week in installments of Three
Hundred Eight Dollars ($308.00).
5. Reimbursement of Expenses. Employee shall be entitled to reimbursement
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for ordinary, necessary and reasonable out-of-pocket trade or business expenses
which Employee incurs in connection with performing his duties under this
Agreement, including reasonable travel and meal expenses. The reimbursement of
all such expenses shall be made upon presentation of evidence reasonably
satisfactory to the Company's President (or such other officer of the Company
designated thereby) of the amounts and nature of such expenses and shall be
subject to the Company's policies regarding business expenses and to the
reasonable approval of the Company's President (or such other officer of the
Company designated thereby). The reimbursement of expenses shall be paid within
thirty days after receipt by the Company. The majority of air travel and hotel
lodgings shall be billed by Company's vendors directly to the Company. The
Employee shall be provided with a written list from the Company specifically
setting forth a description of business expenses which the Company will not
reimburse.
6. Restrictive Covenants. Employee acknowledges and agrees that (i)
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through his position as an employee of the Company, he will learn valuable trade
secrets and other proprietary information relating to the Business of the
Company, (ii) Employee's services to the Company are unique in nature, and (iii)
the Company would be irreparably damaged if Employee were to provide services to
any person or entity in violation of the restrictions contained in this
Agreement. Accordingly, as an inducement to the Company to enter into this
Agreement and in consideration of his employment hereunder, Employee agrees that
during the time he is employed at the Company and for an additional one (1) year
thereafter (such period being referred to herein as the "Restricted Period"),
the Employee shall not, directly or indirectly, either for himself or for any
other person or entity:
(a) engage or participate in, or assist, advise or be connected with
(including as an employee, owner, partner, shareholder, officer,
director, advisor, consultant, agent or otherwise), or permit his name
to be used by or render services for, any person or entity engaged in
a Competing Business (as hereinafter defined) provided however, that
Employee shall not be in breach of this Agreement if the Employee
makes a passive investment in a business that later becomes a
Competing Business;
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(b) take any action which might divert from the Company or an Affiliate of
the Company any business which is within the scope of the Company's
business, including but not limited to a Competing Business;
(c) solicit or attempt to solicit (i) any then subscriber or other
customer of the Company with whom the Employee had contact and/or
knowledge during the Employment Term to purchase Competing Products or
Services (as herein defined) from any person or entity (other than the
Company) or (ii) any then subscriber, customer, supplier, licensor,
licensee or other business relation of the Company with whom the
Employee had contact and/or knowledge during the Employment Term to
cease doing business with the Company; or
(d) solicit or hire any person who is or was in the preceeding six months
a director, officer, employee or agent of the Company or any Affiliate
of the Company to perform services for any entity other than the
Company and its Affiliates.
As used herein, a "Competing Business" shall mean any company or person engaged
in, or planning to engage in, the business of providing pay or subscription
television services (whether through hard-wire, wireless or other transmissions)
to any customer in any market in which the Company or any Affiliate thereof is
providing pay or subscription television services or was planning to provide
such services as of the date of the termination of Employee's employment with
the Company, excepting that Young shall not be prohibited from owning, managing,
working for or operating a hard-wire or wireless installation company or
business regardless of its location so long as such installation company or
entity is not owned in whole or part by a "Competing Business". Such markets
currently include Albuquerque, Baltimore, Chicago, Detroit, Houston,
Indianapolis, Kansas City, Milwaukee, Phoenix, St. Louis and Tucson and other
markets may be added in the future. The products and services subject to these
restrictive covenants are herein referred to as "Competing Products and
Services". The restrictions contained herein and the Employee's obligation to
comply with this Section 6 shall not relate to products and services offered by
the Company after the execution of this Agreement which are not characteristic
of nor related to the Employee's area of expertise.
7. Disclosure of Confidential Information. Employee recognizes that he
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possesses or as a result of his employment by the Company will gain possession
of Confidential Information (as defined below). Accordingly, as an inducement
for the Company to enter into this Agreement and in consideration of Employee's
employment, Employee agrees that:
(a) for the longest period permitted by law from the date of this
Agreement, Employee and each Affiliate of Employee shall hold in
strictest confidence and shall not, other than as required by law,
without the prior written consent of the Company, use for his own
benefit or that of any third party or intentionally or negligently
disclose in a manner which could be harmful to the Company to any
person, firm or corporation except the Company, an Affiliate of the
Company or employees of the Company any Confidential Information (as
defined below). For purposes of this Agreement, intending that the
term shall be broadly construed to
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include anything protectible as a trade secret under applicable law,
"Confidential Information" shall mean all information, and all
documents and other tangible items which record information, relating
to the creation and marketing by the Company of products and services,
from time to time, which at the time or times concerned is protectible
as a trade secret under applicable law, and which has been or is from
time to time learned by, disclosed to or known by Employee including,
without limitation, the following especially sensitive types of
information relating to the creation and marketing of products and
services of the Company:
(i) product development and marketing plans and strategies;
(ii) budgetary and financial information;
(iii) wireless cable development or launch plans for new or
existing systems or services;
(iv) information concerning contractual relationships by and
among the Company, its vendors, licensors, program suppliers,
employees or subscribers or other customers; and
(v) information concerning the character and scope of
business or personal relationships between employees, directors, and
consultants of the Company.
As used herein, an "Affiliate" shall mean and include any person or
entity which controls a party, which such party controls or which is under
common control with such party. "Control" means the power, direct or indirect,
to influence or cause the direction of the management and policies of a person
or entity through voting securities, contract or otherwise;
(b) Employee and each Affiliate of Employee shall promptly following a
request therefor from the Company return to the Company, without
retaining copies, all tangible items which are or which contain
Confidential Information, it being agreed by Employee on behalf of
himself and his heirs, successors and assigns that the Company shall
be entitled to rely on any action taken by Employee or the
Representative in connection with this paragraph (b); and
(c) at the request of the Company made at any time or from time to time
hereafter, Employee and each Affiliate of Employee shall make, execute
and deliver all applications, papers, assignments, conveyances,
instruments or other documents and shall perform or cause to be
performed such other lawful acts as the Company may reasonably deem
necessary or desirable to implement any of the provisions of this
Agreement, and shall give testimony and cooperate with the Company,
its Affiliates or its representatives in any controversy or legal
proceedings involving
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the Company, its Affiliates or its representatives with respect to any
Confidential Information, provided that the Company shall promptly
reimburse Employee and each Affiliate thereof for his reasonable costs
incurred in connection with the foregoing, including but not limited
to the reasonable costs and expenses of legal counsel retained by
Employee.
8. Inventions. Employee acknowledges that in his capacity as an employee
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of the Company, he may be involved in (i) the conception or making of
improvements, discoveries, inventions or the like (whether patentable or
unpatentable and whether or not reduced to practice), (ii) the authorship of
copyrightable works, or (iii) the development of trade secrets relating to the
Business. Employee acknowledges that all such intellectual property is the
exclusive property of the Company. Employee hereby waives any rights he may have
in or to such intellectual property, and Employee hereby assigns to the Company
all right, title and interest in and to such intellectual property. At the
Company's request and at no expense to Employee, Employee shall execute and
deliver all such papers, including, without limitation, any assignment
documents, and shall provide such cooperation as may be necessary or desirable,
or as the Company may reasonably request, in order to enable the Company to
secure and exercise its rights to such intellectual property. All concepts and
inventions known to and/or utilized by the Employee prior to his employment with
the Company shall remain the sole and exclusive right and property of the
Employee and the Company shall not be entitled to claim any right, title or
interest therein.
9. Specific Performance.
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(a) Employee agrees that any violation by him of Sections 6, 7 or 8 of
this Agreement, as applicable, would be highly injurious to the
Company and would cause irreparable harm to the Company. By reason of
the foregoing, Employee consents and agrees that if he violates any
provision of Sections 6, 7 or 8 of this Agreement the Company shall be
entitled, in addition to any other rights and remedies that it may
have, to apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or
prevent any continuing violation of, the provisions of such Section.
In the event Employee breaches a covenant contained in this Agreement,
the Restricted Period applicable to Employee with respect to such
breached covenant shall be extended for the period of such breach.
(b) In the event that the Company or any Affiliate of the Company has
reason to believe that the Employee has breached this Agreement and or
has failed to perform any of the terms, conditions and covenants of
this Agreement, the Company shall deliver to the Employee a written
memorandum, acknowledged by the Employee, specifically setting forth
and describing the facts, circumstances, events and or documents which
the Company believes represent such breach and/or non-performance by
the Employee. The Employee shall thereafter have five (5) business
days to cure such breach and or events of non-performance (the "Cure
Period"). Until such time as the Company has provided notice the
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Employee and the Cure Period has run, the Employee shall not be deemed
to have breached and/or failed to perform this Agreement. If the
Employee has cured the breach or event(s) of non-performance, then the
Company shall not have the right to terminate this Agreement or the
employment of the Employee. If the alleged breach or event(s) of non-
performance represent matters which cannot by their nature by cured,
the Employee will provide the Company with written assurances that
such acts will not re-occur. If the same breach of event of non-
performance thereafter occurs as a result of the fault of Employee,
the Employee will be deemed to have waived further notice and the Cure
Period associated with the re-occurrence.
10. Enforcement. Employee acknowledges that the territorial, time and
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scope limitations set for in Section 6 and 7, as applicable, are reasonable and
are properly required for the protection of the Company and in the event that
any such territorial, time or scope limitation is deemed to be unreasonable by a
court of competent jurisdiction, the Company and Employee agree, and Employee
submits, to the reduction of any or all of said territorial, time or scope
limitations to such an area, period or scope as said court shall deem reasonable
under the circumstances. Notwithstanding anything contained herein, if the
Employee is terminated from his employment with the Company without cause or the
Company breaches this Agreement, the Employee shall be released from his
obligations to comply with Section 6(a). If the Company breaches this Agreement
or terminates the Employee without cause, the Employee shall be entitled to the
severance salary and benefits described in Section 11(b) in addition to any
other remedies to which the Employee may be entitled.
11. Termination; Severance.
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(a) Notwithstanding the provisions of Section 1 and the other provisions
of this Agreement, Employee's employment with the Company may be
terminated at any time by the Company's Chairman, Chief Executive
Officer or President for "cause," which shall include (i) Employee's
conviction for, or plea of nolo contendere to, a felony, (ii)
Employee's intentional commission of an act involving self-dealing,
fraud or personal profit materially injurious to the Company, (iii)
Employee's commission of an act of willful misconduct or gross
negligence in the conduct of his duties hereunder, (iv) habitual
absenteeism or tardiness on the part of Employee provided that the
Employee has at least received one (1) prior written reprimand for
previous incidents of absenteeism or tardiness, (v) Employee's
intentional breach or violation of any material internal policies or
rules of the Company, including those rules adopted by PCTV concerning
the purchase and sale of PCTV's common stock or other securities by
employees of the Company, and (vi) Employee's breach of any material
provision of this Agreement. Any termination by the Company under this
Section 11(a) shall be in writing and shall set forth the reason for
such termination. In the event of termination under this Section
11(a), the Company's obligations under this Agreement shall cease and
Employee shall forfeit all right to receive any other compensation or
benefits under this Agreement, except that Employee shall be
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entitled to his Salary (under Section 3) and benefits (under Section
4) for services already performed as of the date of termination of
this Agreement. Without limitation, termination of Employee pursuant
to this Section 11(a) shall not relieve Employee of his obligations
under Sections 6, 7 or 8 hereof. Notwithstanding anything else in this
Agreement, if the Employee is terminated pursuant to Section 11(a)(i),
(ii) or (iii) above, the Company shall not be obligated to comply with
Section 9.2 above.
(b) Notwithstanding the provisions of Section 1 and the other provisions
of this Agreement, one year after the anniversary date of this
Agreement, Employee's employment with the Company may be terminated at
any time for any reason or no reason by the Company's Chairman and
Chief Executive Officer, or President without cause, provided that in
the event of such a termination, Employee shall be paid within 30 days
after the termination date both (1) an amount equivalent to one
hundred eighty days of his Salary and bonus (under Section 3) and (2)
an amount equivalent to one hundred eighty days of his benefits (under
Section 4). All matters concerning Stock Options referred to in
Section 3(c) shall be determined under the Stock Option Agreement.
Except as otherwise specifically provided above, the Company's
obligations under this Agreement shall cease upon termination and
Employee shall forfeit all rights to receive any other compensation or
benefits under this Agreement. Without limitation, a termination of
Employee pursuant to this Section 11(b) shall not relieve Employee of
his obligations under Sections 6, 7 or 8 hereof.
(c) Notwithstanding the provisions of Section 1 and the other provisions
of this Agreement, after the one (1) year anniversary of the execution
of this Agreement, Employee's employment with the Company may be
terminated by Employee upon the provision of not less than ninety (90)
days prior written notice to the Company. In the event of termination
under this Section 11(c) and except as otherwise provided herein, the
Company's and Employee's obligations under this Agreement shall cease
upon the date indicated in Employee's notice, except that Employee
shall be entitled to his Salary (under Section 3) and benefits (under
Section 4) for services already performed as of the date of
termination of this Agreement. Without limitation, termination of
Employee pursuant to this Section 11(c) shall not relieve Employee of
his obligations under Sections 6, 7, or 8 hereof.
12. Death or Disability.
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(a) If Employee becomes permanently disabled (determined as provided
below) during the Employment Term, his employment may terminate at the
election of the Company as of the date such permanent disability is
determined. Employee shall be considered to be permanently disabled
for purposes of this Agreement if he is unable by reason of accident,
illness or physical condition (including mental illness) to perform
the material duties of his regular position with the Company
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and is not expected to recover from his disability within a period of
six (6) months from the commencement of the disability. If at any time
Employee claims or is claimed by the Company to be permanently
disabled, a physician acceptable to both Employee, or his
representative or guardian, and the Company (which acceptances shall
not be unreasonably withheld) shall be retained and paid for by the
Company and shall examine Employee. Employee shall cooperate fully
with the physician. If the physician determines that Employee is
permanently disabled, the physician shall deliver to the Company and
the Employee a certificate certifying both that Employee is
permanently disabled and the date upon which the condition of
permanent disability commenced. The determination of the physician may
be relied upon by the Company, unless demonstrated otherwise by the
Employee.
(b) Employee's right to his compensation and benefits under this Agreement
shall cease upon his death or disability, except that (i) Employee (or
his estate or heirs) shall be entitled to his Salary (under Section 3)
and benefits (under Section 4) for services performed as of the date
of his death or termination due to permanent disability, and (ii) in
addition, with respect to termination due solely to Employee's
permanent disability as determined pursuant to this Section 12, he
shall also be entitled to his Salary (under Section 3) and benefits
(under Section 4) for the ninety (90) day period beginning on the date
the permanent disability began; provided, however, that any such
amounts for Salary continuation shall be reduced by any amount
received by Employee under any disability insurance policy or other
benefit program such as Social Security.
13. Miscellaneous.
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(a) All notices hereunder shall be in writing and shall be deemed given
when delivered in person, or three (3) business days after being
deposited in the United States mail, postage prepaid, registered or
certified mail, or two (2) business days after delivery to a
nationally recognized express courier, expenses prepaid, addressed as
follows:
If to Employee:
Mr. Xxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
If to the Company:
People's Choice TV Corp.
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Att: General Counsel
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and/or at such other addresses and/or to such other addressees as may be
designated by notice given in accordance with the provisions hereof.
(b) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors and permitted
assigns. No party shall assign this Agreement or its rights hereunder
without the prior written consent of the other party hereto; provided,
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however, that the Company may assign this Agreement without the prior
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written consent of Employee to any person or entity acquiring all or
substantially all of the Business of the Company (whether by sale of
stock, sale of assets, merger, consolidation or otherwise).
(c) This Agreement contains all of the agreements between the parties with
respect to the subject matter hereof and this Agreement supersedes all
other agreements, oral or written, between the parties hereto with
respect to the subject matter hereof., except that this Agreement
shall not supersede or alter any of the other agreements and documents
executed as part of the transaction involving the sale and purchase of
the Employee's shares of Sat-Tel Services, Inc. by the Company.
(d) No change or modification of this Agreement shall be valid unless the
same shall be in writing and signed by all of the parties hereto. No
waiver of any provisions of this Agreement shall be valid unless in
writing and signed by the waiving party. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a
waiver of any other provision, whether or not similar, nor shall any
waiver constitute a continuing waiver, unless so provided in the
waiver.
(e) If any provisions of this Agreement (or portions thereof) shall, for
any reason, be considered invalid or unenforceable by any court of
competent jurisdiction and such provision is not subject to revision
pursuant to Section 10, such provisions (or portions thereof) shall be
ineffective only to the extent of such invalidity or unenforceability,
and the remaining provisions of this Agreement (or portions thereof)
shall nevertheless be valid, enforceable and of full force and effect.
The Company's rights and the rights of the Employee under this
Agreement shall not be exclusive and shall be in addition to all other
rights and remedies available at law or in equity, including but not
limited to statutory rights provided pursuant to legislation involving
the protection of trade secrets.
(f) The section or paragraph headings or titles herein are for convenience
of reference only and shall not be deemed a part of this Agreement.
(g) This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original and all of which when taken together
shall constitute a single instrument.
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(h) This Agreement shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other
respects by the laws of the State of Arizona applicable to contracts
made in that State (other than any conflict of laws rule which might
result in the application of the laws of any other jurisdiction).
Employee hereby expressly submits and consents in advance to the
jurisdiction of the federal and state courts of the State of Arizona
for all purposes in connection with any action or proceeding arising
out of or relating to this Agreement.
(i) Notwithstanding anything else contained in this Agreement, Employee's
right to medical benefits shall be controlled and determined pursuant
to the Stock Purchase Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
People's Choice TV Corp.
By:________________________________
Xxxxxx Xxxxxx, President
_________________________________
Xxxxxx X. Xxxxx
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