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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of the 3rd day of
November, 1997 by and between Golden Sky Systems, Inc., a Delaware corporation
(the "Company"), and Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Executive is currently providing sales and managerial
services to the Company, and the Company desires to secure the continued
employment of the Executive in accordance herewith;
WHEREAS, the Executive is willing to commit himself to be employed by
the Company on the terms and conditions herein set forth and forego
opportunities elsewhere; and
WHEREAS, the parties desire to enter into this Agreement as of the
Effective Date (as hereinafter defined), setting forth the terms and conditions
for the employment relationship of the Executive with the Company during the
Employment Period (as hereinafter defined).
NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:
1. Employment and Term.
(a) Employment. The Company agrees to employ the Executive, and the
Executive agrees to be employed by the Company, in accordance with the terms and
provisions of this Agreement during the Employment Period.
(b) Term and Extension. The term of this Agreement shall commence as of
the date hereof (the "Effective Date") and shall continue until the third
anniversary of the Effective Date (such term being referred to hereinafter as
the "Employment Period"). The Employment Period shall automatically be extended
for one year on the second anniversary of the Effective Date, and each
anniversary thereafter, unless either party gives the other written notice of
its intention not to extend the Employment Period at least 30 days prior to such
automatic extension, in which case no further extensions will occur.
(c) Non-Competition Agreement. As a condition precedent to the
execution of this Agreement by the Company, the Executive shall simultaneously
enter into a Non-Competition Agreement in form and substance satisfactory to the
Company (the "Non-Competition Agreement").
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2. Duties and Powers of Executive.
(a) Position; Location. During the Employment Period, the Executive
shall serve as Vice President, Marketing and Sales of the Company, and shall
provide such services as are from time to time requested by the Chief Executive
Officer of the Company. The title, authority, duties, and responsibilities of
the Executive may be increased from time to time, but only with the mutual
written agreement of the Executive and the Company. The Executive's services
shall be performed primarily at the Company's headquarters in the Kansas City
metropolitan area.
(b) Attention. During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
shall devote his full business time, best efforts and business judgment to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive under this Agreement, use the
Executive's best efforts to carry out such responsibilities faithfully and
efficiently. The Executive shall not engage in any other business activity,
except as may be approved by the Board of Directors; provided, however, that
nothing herein shall prevent the Executive from:
(i) investing his assets in a manner not prohibited by the
Non-Competition Agreement, and in such form or manner as shall not require the
Executive to render any material services with respect to the operations or
affairs of any company or other entity in which such investments are made;
(ii) engaging in religious, charitable or other community or
non-profit activities which do not impair his ability to fulfill his duties and
responsibilities under this Agreement;
(iii) serving on the board of directors of any company, other than
the Company, in a manner not prohibited by the Non-Competition Agreement; or
(iv) engaging in any trade and/or industry organizations or
activities, provided that such activities do not impair his ability to fulfill
his duties and responsibilities under this Agreement.
3. Compensation. The Executive shall receive the following compensation
for his services hereunder to the Company:
(a) Salary. During the Employment Period, the Executive's annual base
salary (the "Annual Base Salary"), payable in accordance with the Company's
general payroll practices and subject to withholding for federal, state aid
local taxes, in effect from time to time, shall be at the annual rate
established by the Board, but in no event less than $100,000.00. The Board may
from time to time direct such upward adjustments in Annual Base Salary as the
Board deems to be necessary or desirable, including, without limitation,
adjustments in order to reflect increases in the cost of living. The Annual Base
Salary shall not be reduced after any increase thereof. Any
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increase in the Annual Base Salary shall not serve to limit or reduce any other
obligation of the Company under this Agreement.
(b) Incentive Compensation. During the Employment Period, the Executive
shall be entitled to participate in short-term incentive compensation plans and
long-term incentive compensation plans (the latter to consist of plans offering
stock options and other long-term incentive compensation providing him with the
opportunity to earn, on a year-by-year basis, short-term and long-term incentive
compensation (the "Incentive Compensation"). Specifically, the Executive shall
be entitled to participate in the Company's 1997 Stock Option and Restricted
Stock Purchase Plan at least to the extent agreed to by he company and the
Executive and reflected in the Notice of Grant issued by the Company pursuant to
such plan.
(c) Retirement, Incentive and Welfare Benefit Plans. During the
Employment Period and so long as the Executive is employed by the Company, he
shall be eligible to participate in all other incentive, stock option,
restricted stock, performance unit, savings, retirement and welfare plans,
practices, policies, and programs applicable generally to employees or executive
officers of the Company and its subsidiaries, except with respect to any
benefits under any plan, practice, policy, or program to which the Executive has
waived his rights in writing.
(d) Expenses. The Company shall reimburse the Executive for all
expenses, including those for travel and entertainment, properly incurred by him
in the performance of his duties hereunder in accordance with policies
established from time to time by the Board.
(e) Fringe Benefits. During the Employment Period and so long as the
Executive is employed by the Company, he shall be entitled to receive fringe
benefits in accordance with the plans, practices, programs and policies of the
Company from time to time in effect, commensurate with his position and at least
the same as those received by any executive officer of the Company.
4. Termination of Employment.
(a) Death or Disability, The Executive a employment shall terminate
automatically during the Employment Period upon the Executive's death or a
determination by a majority of the Board of Directors that, due to physical or
mental disability or illness, the Executive is unable to perform substantially
all of his duties and responsibilities under this Agreement.
(b) By the Company for Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause without further liability on
the part of the Company effective immediately by a vote of a majority of tie
Board of Directors of the Company after written notice to tie Executive setting
forth in reasonable detail the nature of such Cause. For purposes of this
Agreement, "Cause" shall mean: (i) willfully, dishonest and material statements
or acts of the Executive with respect to the Company or any subsidiary thereof;
(ii) conviction of the Executive of a crime involving moral turpitude, deceit,
dishonesty or fraud; (iii)
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willful and substantial failure to perform his duties and obligations under this
Agreement, which failure continues after the Executive is given written notice
and a reasonable opportunity to cure; or (iv) material breach by the Executive
of any obligations hereunder or under this Non-Competition Agreement; provided,
however, that other than with respect to a material breach of the
Non-Competition Agreement, the Executive shall first be given written notice
from the Board of Directors of the breach and a reasonable opportunity to cure
such breach.
(c) By the Company without Cause. Notwithstanding any other provision
of this Agreement, the Company may terminate the Executive's employment other
than by a termination for Cause during the Employment Period.
(d) By the Executive for Good Reason. showing a Change of Control, the
Executive may terminate his employment during the Employment Period for Good
Reason. For purposes of this Agreement, "Good Reason" shall mean:
(i) the Company's failure to pay the Executive's Annual Base Salary
as specified in Section 3(a) of this Agreement or to fulfill any other material
obligations under this Agreement;
(ii) a material adverse change in the Executive's title, authority,
duties, or responsibilities as specified in Section 2(a) of this Agreement,
which such change constitutes a demotion; or
(iii) the Company's requiring the Executive, without his consent,
to be based at any office or location is beyond a reasonable commuting distance
from the Kansas City metropolitan area.
For purposes of this Agreement, a "Change in Control" shall be deemed to have
occurred if:
(A) any person, together with all "affiliates" and
"associates" (as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of such person, becomes a
"beneficial owner" (as such term is defined in Rule 12d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of the combined voting power of the Company's then outstanding securities;
or
(B) the persons who, as of the data hereof, were directors of
the Company (the "Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the Company's Board of
Directors; provided that any person becoming a director of the Company
subsequent to the date hereof whose election was approved by a vote of at least
a majority of the Incumbent Director shall, for purposes of this Agreement, be
considered an Incumbent Director; or
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(C) the stockholders of the Company shall approve (1) any
consolidation or merger of the Company where the stockholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own (as defined in the Exchange Act),
directly or indirectly, shares representing in the aggregate at least 50% of the
combined voting power of the outstanding securities of the combined entity, (2)
any sale, lease, exchange or other transfer (in one transaction or a series of
transactions) of all or substantially all of the assets of the Company, or (3)
any plan or proposal for the liquidation or dissolution of the Company.
(e) Notice of Termination. Any termination by the Company for Cause, or
by the Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 9(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice indicating the specific termination provision in this Agreement
relied upon, to the extent applicable, setting 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, and if the Date of
Termination (as defined in Section 4(f)) is other than the date of receipt of
such notice, specifying the termination date (which date shall not he more than
30 days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance that
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company hereunder or preclude the Executive or the Company
from asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
(f) Date of Termination. "Date of Termination" means, if the
Executive's employment is terminated by the Company for Cause or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be. If the Executive's
employment is terminated by the Company other than for Cause, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination. if the Executive's employment is terminated by reason of death
or disability, the Date of Termination shall be the date of death or the date
the determination of disability is first made.
5. Obligations of the Company Upon Termination.
(a) Termination by Company other than for Cause or by the Executive for
Good Reason. If the Executive's employment with the Company is terminated (A) by
the Company for any reason other than for Cause or the Executive's death or
disability, or (B) by the Executive for Good Reason following a Change of
Control, the Executive shall be entitled to the following benefits:
(i) continued payment of the Executive's Annual Salary at the rate
in effect on the Date of Termination, said payments to be made for six (6)
months following the Date of Termination or, in the event of termination of the
Executive for Good Reason, for twelve (12)
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months following the Date of Termination, such payments to be made on the same
periodic dates as salary payments would have been made to the Executive had the
Executive not been terminated;
(ii) Continuation of group health plan benefits to the extent
authorized by the consistent with 29 U.S.C. Sections 1161 et seq. (commonly
known as "COBRA"), with the cost of such benefits shared in the same relative
proportion by the Company and the Executive as in effect on the Date of
Termination; and
(iii) A lump sum payment equal to such position of the Executive's
cash Incentive Compensation for the then current fiscal year as shall be
prorated for a partial year based on the period worked for the Company during
such year and the satisfaction of any applicable milestones or objectives prior
to the Date of Termination.
Except as otherwise specifically provided above or otherwise required
by law, all compensation and benefits to the Executive under this Agreement
shall terminate on the date of the termination.
(b) Termination by Reason of Death or Disability. During the Employment
Period, if the Executive's employment shall terminate by reason of death or
disability, the Company shall pay to the Executive or the Executive's estate, as
appropriate, a lump sum amount in cash equal to the sum of (i) the Executive's
Annual Base Salary through the Date of Termination to the extent not theretofore
paid, (ii) such position of the Executive's cash Incentive Compensation for the
then current fiscal year as shall be pro rated for a partial year based on the
period worked for the Company during such year and the satisfaction of any
applicable milestones or objectives prior to the Date of Termination, and (iii)
any compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) and any accrued vacation pay, in each case to the
extent theretofore paid.
(c) Termination by the Company for Cause or by the Executive other than
for Good Reason. If the Executive's employment shall be terminated for Cause
during the Employment Period, or if the Executive terminates employment during
the Employment Period other than for Good Reason, the Company shall have no
further obligations to the Executive under this Agreement other than the
obligation to pay to the Executive the Annual Base Salary through the Date of
Termination plus the amount of any compensation previously deferred by the
Executive together with any accrued interest or earnings thereon), in each case
to the extent theretofore unpaid.
6. Nonexclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit plan,
program, policy or practice provided by the Company and for which the Executive,
may qualify (except with respect to any benefit to which the Executive has
waived his rights in writing), nor shall anything herein limit or
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otherwise affect such rights as the Executive may leave under any other contract
or agreement entered into after the Effective Date with the Company. Amounts
that are vested benefits or that the Executive is otherwise entitled to receive
under any benefit plan, policy, practice or program of, or any agreement entered
into with, the Company shall be payable in accordance with such benefit plan,
policy, practice or program or agreement except as explicitly modified by this
Agreement.
7. Mitigation; Miscellaneous. The termination benefits set forth in
Section 5(a)(i) above shall he reduced by one-half of the amount of any cash
compensation received by the Executive from other employment during the period
that termination benefits are payable hereunder. The Executive shall inform the
Company of any such amounts of cash compensation from other employment and shall
refund to the Company any amounts which the Company has paid which exceed the
amounts due from the Company after application of the set-off provided for in
this paragraph, Notwithstanding the foregoing and any other provision of this
Agreement, nothing in this Section 7 shall be construed to (i) impose any
obligation on the Executive to seek or accept any Employment after termination
of employment with the Company for any reason, or (ii) affect the Executive's
right to receive COBRA benefits at his cost after the expiration of the benefits
provided for herein. Notwithstanding anything in this Agreement to the contrary,
if any portion of any payments to the Executive by the Company under this
Agreement and any other present or future benefit plan of the Company or other
present or future agreement between the Executive and the Company would not be
deductible by the Company for federal income tax purposes by reason of
application of section 162(m) of the Code, then payment of that portion to the
Executive may be deferred by the Company until the earliest date upon which
payment thereof can be made to the Executive without being non-deductible
pursuant to section 162(m) of the Code. In the event of such deferral, the
Company shall pay interest to the Executive on the deferred amount at 120% of
the applicable federal rate provided for in Section 1274(d)(2) of the Code.
8. Successors.
(a) Assignment by Executive. This Agreement is personal to the
Executive and without the prior written consent of the company shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
(b) Successors and Assigns of Company. This Agreement shall inure to
the benefit of and be binding upon the Company, its successors and assigns.
(c) Assumption. The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to assume expressly
and agreed to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall. mean the Company, as
previously defined, and any successor to its businesses and/or assets as
aforesaid that assumes and agrees to perform this Agreement by operation of law,
or otherwise.
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9. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri, without reference to its
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended, modified, repealed, waived, extended, or discharged except by an
agreement in writing signed by the party against whom enforcement of such
amendment, modification, repeal, waiver, extension or discharge is sought. No
person, other than pursuant to a resolution of the Board or the appropriate
committee thereof, shall have authority on behalf of the Company to agree to
amend, modify, repeal, waive, extend, or discharge any provision of this
Agreement or anything in reference thereto.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed, in
either case, to the Company's headquarters or to such other address as either
party shall have stated to the other in writing in accordance herewith. Notice
and communications shall be effective when actually received by the addressee.
(c) Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) Taxes. The Company may withhold from any amounts payable under this
Agreement such federal, state, or local taxes as shall be required to be
withheld pursuant to and applicable law or regulation.
(e) No Waiver. The Executive's or the Company's failure to insist upon
strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Company may
have hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to Section 4(d) of this Agreement,
or the right of the Company to terminate the Executive's employment for Cause
pursuant to Section 4(b) of this Agreement shall not be deemed to be a waiver of
such provision or right or any other provision or right of this Agreement.
(f) Entire Agreement. This instrument, together with the
Non-Competition Agreement, contains the entire agreement of the Executive and
the Company with respect to the subject matter hereof, and all promises,
representations, understandings, arrangements and prior agreements are merged
herein and superseded hereby.
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IN WITNESS WHEREOF, the Executive and, pursuant to due authorization
from its Board of Directors, the Company, have caused this Agreement to be
executed as of the day and year first above written.
GOLDEN SKY SYSTEMS, INC.
/s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: President
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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