Exhibit 10.3
ARCH WIRELESS, INC.
EXECUTIVE RETENTION AGREEMENT
Amendment, Restatement
and Waiver
WHEREAS, a retention agreement was previously entered into by and between
Arch Communications Group, Inc., a Delaware corporation, now known as Arch
Wireless, Inc. (the "Company"), and ________________________ (the "Executive")
(the "Prior Agreement"); and
WHEREAS, the parties to the Prior Agreement, acting in accordance with
Section 8.9 of the Prior Agreement, have agreed to amend and restate said Prior
Agreement by executing this Amendment, Restatement and Waiver (the "Agreement").
NOW, THEREFORE, to address certain issues that have arisen in connection
with the definition of Change of Control in the Prior Agreement and for such
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereby amend and restate the Prior Agreement, in its entirety,
effective November 1, 2000, as follows:
1. Key Definitions.
As used herein, the following terms shall have the following respective
meanings:
1.1 "Acceleration Date" means the first date during the Term (as
defined in Section 2) on which an Acceleration Event occurs.
1.2 "Acceleration Event" means, except as provided in Section 1.2(c),
an event involving either subsection (a) or (b):
(a) the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 50% or more of either (x) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (y) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control Event: (i) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the Company or an underwriter or agent of the
Company), (ii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or any Acquiring Corporation (as defined in subsection (b) of this
definition), or (iii) any acquisition by any corporation pursuant to a Merger
Combination (as defined below) which fails to satisfy the condition specified in
clause (y) of subsection (b) of this Section 1.2; or
(b) the consummation of a merger, consolidation, reorganization,
recapitalization or share exchange involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a "Merger
Combination"), if immediately following such Merger Combination, neither of the
following two conditions is satisfied: (x) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Merger Combination beneficially own, directly or indirectly, more than
50% of the then-outstanding shares of common stock and the combined voting power
of the then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Merger Combination (which shall include, without limitation, a corporation which
as a result of such transaction owns the Company or substantially all of the
Company's assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the "Acquiring
Corporation") in substantially the same proportions as their ownership of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
respectively, immediately prior to such Merger Combination and (y) the
Continuing Directors (as defined below) do not constitute a majority of the
Board of Directors of the Company (the "Board") (or, if applicable, the Board of
Directors of a successor corporation to the Company), where the term "Continuing
Director" means at any date a member of the Board (i) who was a member of the
Board on the effective date of this Agreement or (ii) who was nominated or
elected subsequent to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (ii)
any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board.
(c) Notwithstanding the foregoing provisions of subsections (a)
and (b), no transaction undertaken in connection with or contemplated by the
Agreement and Plan of Merger dated November 7, 1999 among Paging Network, Inc.,
Arch Communications Group, Inc. and St. Louis Acquisition Corp., as amended from
time to time (the "Merger Agreement") shall be deemed to be an Acceleration
Event.
1.3 "Change in Control" means:
(a) the acquisition by a Person of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) more than 50% of either (i) the Outstanding Company Common Stock
or (ii) the Outstanding Company Voting Securities; provided, however, that for
purposes of this subsection (a), the following acquisitions shall not constitute
a Change in Control: (i) any acquisition directly from the Company (excluding an
acquisition pursuant to the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for common stock or voting
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securities of the Company, unless the Person exercising, converting or
exchanging such security acquired such security directly from the Company or an
underwriter or agent of the Company), (ii) any acquisition by the Company, (iii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (iv)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (c) of this Section 1.3; or
(b) individuals who, as of the date hereof, constitute the
members of the Board (the "Incumbent Directors") ceasing for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director of the Company subsequent to the date hereof
whose election, or nomination for election, by the Company's stockholders was
approved by a vote of at least a majority of the Incumbent Directors then in
office shall be deemed to be an Incumbent Director (except that this proviso
shall not apply to any individual whose initial election as a director occurs as
a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board); or
(c) the consummation of a reorganization, merger or consolidation
involving the Company or a sale or other disposition of all or substantially all
of the assets of the Company (a "Business Combination"), unless, immediately
following such Business Combination, each of the following three conditions is
satisfied: (i) all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the then-outstanding
shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such Business
Combination (which shall include, without limitation, a corporation which as a
result of such transaction owns the Company or substantially all of the
Company's assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the "Acquiring
Corporation") in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively, (ii) no
Person (excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 50% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding voting securities of such
corporation (except to the extent that such ownership existed prior to the
Business Combination) and (iii) a majority of the members of the board of
directors of the Acquiring Corporation were Incumbent Directors at the time of
the execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or
(d) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
1.4 "Change in Control Date" means the first date during the Term (as
defined in Section 2) on which a Change in Control occurs. Anything in this
Agreement to the contrary notwithstanding, if (a) a Change in Control occurs,
(b) the Executive's employment with the Company is terminated prior to the date
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on which the Change in Control occurs, and (c) it is reasonably demonstrated by
the Executive that such termination of employment (i) was at the request of a
third party who has taken steps reasonably calculated to effect a Change in
Control or (ii) otherwise arose in connection with or in anticipation of a
Change in Control, then for all purposes of this Agreement the "Change in
Control Date" shall mean the date immediately prior to the date of such
termination of employment.
1.5 "Cause" means:
(a) the Executive's willful and continued failure to
substantially perform his or her reasonable assigned duties as an officer of the
Company (other than any such failure resulting from incapacity due to physical
or mental illness or any failure after the Executive gives notice of termination
for Good Reason), which failure is not cured within 30 days after a written
demand for substantial performance is received by the Executive from the Board
which specifically identifies the manner in which the Board believes the
Executive has not substantially performed the Executive's duties; or
(b) the Executive's willful engagement in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company.
For purposes of this Section 1.5, no act or failure to act by the Executive
shall be considered "willful" unless it is done, or omitted to be done, in bad
faith and without reasonable belief that the Executive's action or omission was
in the best interests of the Company.
1.6 "Good Reason" means the occurrence, without the Executive's
written consent, of any of the events or circumstances set forth in clauses (a)
through (g) below. Notwithstanding the occurrence of any such event or
circumstance, such occurrence shall not be deemed to constitute Good Reason if,
prior to the Date of Termination specified in the Notice of Termination (each as
defined in Section 3.2(a)) given by the Executive in respect thereof, such event
or circumstance has been fully corrected and the Executive has been reasonably
compensated for any losses or damages resulting therefrom (provided that such
right of correction by the Company shall only apply to the first Notice of
Termination for Good Reason given by the Executive):
(a) any material reduction in the Executive's titles, reporting
requirements, authority or responsibilities from those in effect immediately
prior to the earliest to occur of (i) the Change in Control Date, (ii) the date
of the execution by the Company of the initial written agreement or instrument
providing for the Change in Control or (iii) the date of the adoption by the
Board of Directors of a resolution providing for the Change in Control (with the
earliest to occur of such dates referred to herein as the "Measurement Date");
(b) a reduction in the Executive's annual base salary as in
effect on the Measurement Date or as the same may be increased from time to
time;
(c) the failure by the Company to (i) continue in effect any
material compensation or benefit plan or program (including without limitation
any life insurance, medical, health and accident or disability plan and any
vacation program or policy) (a "Benefit Plan") in which the Executive
participates or which is applicable to the Executive immediately prior to the
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Measurement Date, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan or
program, (ii) continue the Executive's participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of the Executive's
participation relative to other participants, than the basis existing
immediately prior to the Measurement Date or (iii) award cash bonuses to the
Executive in amounts and in a manner substantially consistent with past practice
in light of the Company's financial performance;
(d) a change by the Company in the location at which the
Executive performs the Executive's principal duties for the Company to a new
location that is both (i) outside a radius of 35 miles from the Executive's
principal residence immediately prior to the Measurement Date and (ii) more than
20 miles from the location at which the Executive performs his or her principal
duties for the Company immediately prior to the Measurement Date; or a
requirement by the Company that the Executive travel on Company business to a
substantially greater extent than required immediately prior to the Measurement
Date;
(e) the failure of the Company to obtain the agreement, in a form
reasonably satisfactory to the Executive, from any successor to the Company to
assume and agree to perform this Agreement, as required by Section 6.1;
(f) a purported termination of the Executive's employment which
is not effected pursuant to a Notice of Termination satisfying the requirements
of Section 3.2(a), which purported termination shall not be effective for
purposes of this Agreement; or
(g) any failure of the Company to pay or provide to the Executive
any portion of the Executive's compensation or benefits due under any Benefit
Plan within seven days of the date such compensation or benefits are due, or any
material breach by the Company of any employment agreement with the.
The Executive's right to terminate his or her employment for Good Reason
shall not be affected by his or her incapacity due to physical or mental
illness.
1.7 "Disability" means the Executive's absence from the full-time
performance of the Executive's duties with the Company for 180 consecutive
calendar days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Executive or the Executive's legal
representative.
2. Term of Agreement. This Agreement, and all rights and obligations of the
parties hereunder, shall take effect upon the Effective Date and shall expire
upon the first to occur of (a) the expiration of the Term (as defined below) if
a Change in Control or Acceleration Event has not occurred during the Term, (b)
the date 12 months after the later of an Acceleration Date or a Change in
Control Date, if the Executive is still employed by the Company as of such later
date, or (c) the fulfillment by the Company of all of its obligations under
Sections 4 and 5.2 if the Executive's employment with the Company terminates
within 12 months following the later of an Acceleration Date or a Change in
Control Date. "Term" shall mean the period commencing as of the Effective Date
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and continuing in effect through December 31, 2002; provided, however, that
commencing on January 1, 2003 and each January 1 thereafter, the Term shall be
automatically extended for one additional year unless, not later than 90 days
prior to the scheduled expiration of the Term (or any extension thereof), the
Company shall have given the Executive written notice that the Term will not be
extended.
3. Employment Status; Termination Following Change in Control.
3.1 Not an Employment Contract. The Executive acknowledges that this
Agreement does not constitute a contract of employment or impose on the Company
any obligation to retain the Executive as an employee and that this Agreement
does not prevent the Executive from terminating employment at any time. If the
Executive's employment with the Company terminates for any reason and
subsequently a Change in Control shall occur, the Executive shall not be
entitled to any benefits hereunder except as otherwise provided pursuant to
Section 1.4.
3.2 Termination of Employment.
(a) If the Change in Control Date occurs during the Term, any
termination of the Executive's employment by the Company or by the Executive
within 12 months following the Change in Control Date (other than due to the
death of the Executive) shall be communicated by a written notice to the other
party hereto (the "Notice of Termination"), given in accordance with Section 7.
Any Notice of Termination shall: (i) indicate the specific termination provision
(if any) of this Agreement relied upon by the party giving such notice, (ii) to
the extent applicable, 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 and (iii) specify the Date of
Termination (as defined below). The effective date of an employment termination
(the "Date of Termination") shall be the close of business on the date specified
in the Notice of Termination (which date may not be less than 15 days or more
than 120 days after the date of delivery of such Notice of Termination), in the
case of a termination other than one due to the Executive's death, or the date
of the Executive's death, as the case may be.
(b) The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting any such fact or circumstance in enforcing the
Executive's or the Company's right hereunder.
(c) Any Notice of Termination for Cause given by the Company must
be given within 90 days of the occurrence of the event(s) or circumstance(s)
which constitute(s) Cause. Prior to any Notice of Termination for Cause being
given (and prior to any termination for Cause being effective), the Executive
shall be entitled to a hearing before the Board at which he may, at his
election, be represented by counsel and at which he shall have a reasonable
opportunity to be heard. Such hearing shall be held on not less than 15 days
prior written notice to the Executive stating the Board's intention to terminate
the Executive for Cause and stating in detail the particular event(s) or
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circumstance(s) which the Board believes constitutes Cause for termination. Any
such Notice of Termination for Cause must be approved by an affirmative vote of
the Board of Directors.
(d) Any Notice of Termination for Good Reason given by the
Executive must be given within 90 days of the occurrence of the event(s) or
circumstance(s) which constitute(s) Good Reason.
4. Benefits to Executive.
4.1 Stock Acceleration. If the Acceleration Date occurs during the
Term, then, effective upon the Acceleration Date, each outstanding option to
purchase shares of Common Stock of the Company held by the Executive shall
become ( to the extent it is not already) immediately exercisable in full.
4.2 Waiver. Execution of this Agreement by Executive constitutes a
waiver of any right to have previously granted stock options become immediately
exercisable under the terms of Section 4.1 of the Prior Agreement, or under any
other agreement concerning stock options or the Company's 1997 Stock Option
Plan, as a result of any transaction undertaken in connection with or
contemplated by the Merger Agreement. The Executive further agrees to execute
any waiver or amendment requested by the Company to incorporate substantially
similar provisions regarding the definition of Acceleration Event in this
Agreement (even if referred to by another term) and waiver with respect to any
rights to the acceleration of option exercise arising with resepct to the
transactions undertaken or contemplated by the Merger Agreement in any option
agreement issued to the Executive under the Company's 1997 Stock Option Plan.
4.3 Compensation. If the Change in Control Date occurs during the Term
and the Executive's employment with the Company terminates within 12 months
following the Change in Control Date, the Executive shall be entitled to the
following benefits:
(a) Termination Without Cause or for Good Reason. If the
Executive's employment with the Company is terminated by the Company (other than
for Cause, Disability or Death) or by the Executive for Good Reason within 12
months following the Change in Control Date, then the Executive shall be
entitled to the following benefits:
(i) the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the aggregate of the following
amounts:
(1) the sum of (A) the Executive's base salary through
the Date of Termination (to the extent not previously paid), (B) the product of
(x) the annual bonus paid or payable (including any bonus or portion thereof
which has been earned but deferred) for the most recently completed fiscal year
and (y) a fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of which is
365, and (C) the amount of 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 not previously paid (the sum of the
amounts described in clauses (A), (B) and (C) shall be hereinafter referred to
as the "Accrued Obligations"); and
(2) the amount equal to (A) |_||_||_||_||_||_| (change
to appropriate number) multiplied by (B) the sum of (x) the Executive's annual
base salary in effect on the Change in Control Date and (y) the average bonus
paid for the three calendar years immediately preceding the calendar year during
which the Change in Control Date occurs.
(ii) for 12 months after the Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue to provide benefits to the
Executive and the Executive's family at least equal to those which would have
been provided to them if the Executive's employment had not been terminated, in
accordance with the applicable Benefit Plans in effect on the Measurement Date
or, if more favorable to the Executive and his family, in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies; provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive substantially
equivalent benefits under another employer-provided plan, on terms at least as
favorable to the Executive and his family, then the Company shall no longer be
required to provide the benefits described in this clause (ii);
(iii) to the extent not previously paid or provided, the
Company shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is eligible to
receive following the Executive's termination of employment under any plan,
program, policy, practice, contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits"); and
(iv) for purposes of determining eligibility (but not the
time of commencement of benefits) of the Executive for retiree benefits to which
the Executive is entitled, the Executive shall be considered to have remained
employed by the Company until 12 months after the Date of Termination.
(b) Resignation without Good Reason; Termination for Death or
Disability. If the Executive voluntarily terminates his employment with the
Company within 12 months following the Change in Control Date, excluding a
termination for Good Reason, or if the Executive's employment with the Company
is terminated by reason of the Executive's death or Disability within 12 months
following the Change in Control Date, then the Company shall (i) pay the
Executive (or his estate, if applicable), in a lump sum in cash within 30 days
after the Date of Termination, the Accrued Obligations and (ii) timely pay or
provide to the Executive the Other Benefits.
(c) Termination for Cause. If the Company terminates the
Executive's employment with the Company for Cause within 12 months following the
Change in Control Date, then the Company shall (i) pay the Executive, in a lump
sum in cash within 30 days after the Date of Termination, the sum of (A) the
Executive's annual base salary through the Date of Termination and (B) the
amount of any compensation previously deferred by the Executive, in each case to
the extent not previously paid, and (ii) timely pay or provide to the Executive
the Other Benefits.
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4.4 Taxes.
(a) Notwithstanding any other provision of this Agreement, in the
event that the Company undergoes a "Change in Ownership or Control" (as defined
below), the Company shall not be obligated to provide to the Executive such
portion of any "Contingent Compensation Payments" (as defined below) that the
Executive would otherwise be entitled to receive as would constitute "excess
parachute payments" (as defined in Section 280G(b)(1) of the Internal Revenue
Code of 1986, as amended (the "Code")) for the Executive. For purposes of this
Section 4.4, the Contingent Compensation Payments so eliminated shall be
referred to as the "Eliminated Payments" and the aggregate amount (determined in
accordance with Proposed Treasury Regulation Section 1.280G-1, Q/A-30 or any
successor provision) of the Contingent Compensation Payments so eliminated shall
be referred to as the "Eliminated Amount."
(b) Notwithstanding the provisions of Section 4.4(a), no such
reduction in payments or benefits shall be made if (i) the Eliminated Amount
(computed without regard to this sentence) exceeds (ii) the aggregate present
value (determined in accordance with Proposed Treasury Regulation Section
1.280G-1, Q/A-31 and Q/A-32 or any successor provisions) of the amount of any
additional taxes that would be incurred by the Executive if the Eliminated
Payments (determined without regard to this sentence) were paid to him
(including, state and federal income taxes on the Eliminated Payments, the
excise tax imposed by Section 4999 of the Code payable with respect to all of
the Contingent Compensation Payments, and any withholding taxes). The override
of such reduction in payments or benefits pursuant to this Section 4.4(b) shall
be referred to as a "Section 4.4(b) Override." For purpose of the preceding
sentence, if any federal or state income taxes would be attributable to the
receipt of any Eliminated Payment, the amount of such taxes shall be computed by
multiplying the amount of the Eliminated Payment by the maximum combined federal
and state income tax rate provided by law.
(c) For purposes of this Section 4.4 the following terms shall
have the following respective meanings:
(i) "Change in Ownership or Control" shall mean a change in
the ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company determined in accordance with
Section 280G(b)(2) of the Code.
(ii) "Contingent Compensation Payment" shall mean any
payment (or benefit) in the nature of compensation that is made or supplied to a
"disqualified individual" (as defined in Section 280G(c) of the Code) and that
is contingent (within the meaning of Section 280G(b)(2)(A)(i) of the Code) on a
Change in Ownership or Control of the Company.
(d) Any payments or other benefits otherwise due to the Executive
following a Change in Ownership or Control that could reasonably be
characterized (as determined by the Company) as Contingent Compensation Payments
(the "Potential Payments") shall not be made until the dates provided for in
this Section 4.4(d). Within 30 days after the date of such Change in Ownership
or Control, the Company shall determine and notify the Executive (with
reasonable detail regarding the basis for its determinations) (i) which
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Potential Payments constitute Contingent Compensation Payments, (ii) the
Eliminated Amount and (iii) whether the Section 4.4(b) Override is applicable.
Within 30 days after delivery of such notice to the Executive, the Executive
shall deliver a response to the Company (the "Executive Response") stating
either (A) that he agrees with the Company's determination pursuant to the
preceding sentence, in which case he shall indicate, if applicable, which
Contingent Compensation Payments, or portions thereof (the aggregate amount of
which, determined in accordance with Proposed Treasury Regulation Section
1.280G-1, QA-30 or any successor provision, shall be equal to the Eliminated
Amount), shall be treated as Eliminated Payments or (B) that he disagrees with
such determination, in which case he shall indicate which Potential Payments
should be characterized as Contingent Compensation Payments, the Eliminated
Amount, whether the Section 4.4(b) Override is applicable, and, which (if any)
Contingent Compensation Payments, or portions thereof (the aggregate amount of
which, determined in accordance with Proposed Treasury Regulation Section
1.280G-1, QA-30 or any successor provision, shall be equal to the Eliminated
Amount, if any), shall be treated as Eliminated Payments. In the event that the
Executive fails to deliver an Executive Response on or before the required date,
the Company's initial determination shall be final and the Contingent
Compensation Payments that shall be treated as Eliminated Payments shall be
determined by the Company in its absolute discretion. If the Executive states in
the Executive Response that he agrees with the Company's determination, the
Company shall make the Potential Payments to the Executive within three business
days following delivery to the Company of the Executive Response (except for any
Potential Payments which are not due to be made until after such date, which
Potential Payments shall be made on the date on which they are due). If the
Executive states in the Executive Response that he disagrees with the Company's
determination, then, for a period of 60 days following delivery of the Executive
Response, the Executive and the Company shall use good faith efforts to resolve
such dispute. If such dispute is not resolved within such 60-day period, such
dispute shall be settled exclusively by arbitration in Boston, Massachusetts, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The Company shall, within three business days following delivery
to the Company of the Executive Response, make to the Executive those Potential
Payments as to which there is no dispute between the Company and the Executive
regarding whether they should be made (except for any such Potential Payments
which are not due to be made until after such date, which Potential Payments
shall be made on the date on which they are due). The balance of the Potential
Payments shall be made within three business days following the resolution of
such dispute. The amount of any payments to be made to the Executive following
the resolution of such dispute shall be increased by amount of the accrued
interest thereon computed at the prime rate announced from time to time by The
Wall Street Journal, compounded monthly from the date that such payments
originally were due.
(e) The provisions of this Section 4.4 are intended to apply to
any and all payments or benefits available to the Executive under this Agreement
or any other agreement or plan of the Company under which the Executive receives
Contingent Compensation Payments.
4.5 Mitigation. The Executive shall not be required to mitigate the
amount of any payment or benefits provided for in this Section 4 by seeking
other employment or otherwise. Further, except as provided in Section
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4.3(a)(ii), the amount of any payment or benefits provided for in this Section 4
shall not be reduced by any compensation earned by the Executive as a result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company or otherwise.
5. Disputes.
5.1 Settlement of Disputes; Arbitration. All claims by the Executive
for benefits under this Agreement shall be directed to and determined by the
Board and shall be in writing. Any denial by the Board of a claim for benefits
under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific provisions of
this Agreement relied upon. The Board shall afford a reasonable opportunity to
the Executive for a review of the decision denying a claim. Any further dispute
or controversy arising under or in connection with this Agreement shall be
settled exclusively by arbitration in Boston, Massachusetts, in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrator's award in any court having jurisdiction.
5.2 Expenses. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal, accounting and other fees and expenses which
the Executive may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by the Company, the Executive or others
regarding the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive regarding the amount of any payment or benefits
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code. Notwithstanding the preceding sentence, the Executive shall be required to
reimburse the Company for fees and expenses incurred by him (and paid by the
Company) related to a claim or contest initiated by the Executive to the extent
that the arbitrator deems appropriate based on the merits of the Executive's
claims.
6. Successors.
6.1 Successor to Company. 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 expressly to
assume and agree to perform this Agreement to the same extent that the Company
would be required to perform it if no such succession had taken place. Failure
of the Company to obtain an assumption of this Agreement at or prior to the
effectiveness of any succession shall be a breach of this Agreement and shall
constitute Good Reason if the Executive elects to terminate employment, except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "Company" shall mean the Company as defined above and any
successor to its business or assets as aforesaid which assumes and agrees to
perform this Agreement, by operation of law or otherwise.
6.2 Successor to Executive. This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amount would still be payable to
the Executive or his family hereunder if the Executive had continued to live,
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all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the executors, personal representatives or
administrators of the Executive's estate.
7. Notice. All notices, instructions and other communications given
hereunder or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or certified
mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable
nationwide overnight courier service, in each case addressed to the Company, at
0000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000 Attention: Chief
Executive Officer, and to the Executive at _____________ (or to such other
address as either the Company or the Executive may have furnished to the other
in writing in accordance herewith). Any such notice, instruction or
communication shall be deemed to have been delivered five business days after it
is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service. Either party may give any notice, instruction or
other communication hereunder using any other means, but no such notice,
instruction or other communication shall be deemed to have been duly delivered
unless and until it actually is received by the party for whom it is intended.
8. Miscellaneous.
8.1 Employment by Subsidiary. For purposes of this Agreement, the
Executive's employment with the Company shall not be deemed to have terminated
solely as a result of the Executive continuing to be employed by a wholly-owned
subsidiary of the Company.
8.2 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, which shall remain in full force and effect.
8.3 Injunctive Relief. The Company and the Executive agree that any
breach of this Agreement by the Company is likely to cause the Executive
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Executive
shall have the right to specific performance and injunctive relief.
8.4 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflicts of law principles.
8.5 Waivers. No waiver by the Executive at any time of any breach of,
or compliance with, any provision of this Agreement to be performed by the
Company shall be deemed a waiver of that or any other provision at any
subsequent time.
8.6 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but both of which together shall
constitute one and the same instrument.
8.7 Tax Withholding. Any payments provided for hereunder shall be paid
net of any applicable tax withholding required under federal, state or local
law.
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8.8 Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and cancelled.
8.9 Amendments. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
ARCH WIRELESS, INC.
By:________________________________
Title:_______________________________
-----------------------------------
[NAME OF EXECUTIVE]
