EXHIBIT 10.1
EMPLOYMENT AGREEMENT
WITH
XXXXX X. XXXXXXX
This Agreement, effective as of April 17, 2000, by and between U.S. Mobile
Services, Inc., a Delaware Corporation having a place of business at 000 Xxxxxxx
Xxxx., Xxxxx 000, Xxxx Xxxx, Xxxxxxx (the "Corporation"), and Xxxxx Xxxxxxx, an
individual residing at 000 Xxxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxx (the "Employee").
WITNESSETH:
WHEREAS, the Corporation desires to employ the Employee as Chairman of its
Board of Directors and Chief Executive Officer to perform work for the
Corporation. The Employee desires to be employed by the Corporation pursuant to
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing as well as the mutual
promises and covenants herein contained, it is hereby agreed as follows:
1. EMPLOYMENT; DUTIES
(a) The Corporation engages and employs the Employee, and the Employee
hereby accepts engagement and employment, as Chairman of the Corporation's Board
of Directors and Chief Executive Officer for the Corporation, and Employee
hereby accepts such retention by the Corporation, to undertake such services as
the Corporation shall reasonably request in connection with the Corporation's
business.
(b) The Employee shall perform his duties hereunder from the Corporation's
offices in Lake Mary, Florida.
(c) The Employee shall devote such of his time and efforts as he shall
deem necessary to properly discharge his duties and responsibilities under this
Agreement.
2. TERM
The Employee's employment hereunder shall be for a term commencing on
April 17, 2000 and continuing through April 16, 2003, unless sooner terminated
as hereinafter provided. If Employee remains as an Employee subsequent to the
term mentioned above, said employment would be under a new agreement to be
negotiated at that time. Such agreement to provide terms equal to or better than
this Agreement.
3. COMPENSATION
(a) As compensation for the performance of his duties on behalf of the
Corporation, the Corporation shall pay the Employee a base salary ("Base
Salary") of $300,000 per year, and at least $350,000 per year for the second 12
months of payments, and such equal or greater amount subsequently as may be
determined by the Board of Directors, payable in equal installments on a
bi-monthly basis in arrears. The Corporation shall withhold all applicable
federal, state and local taxes, social security and worker's compensation
contributions and such other amounts as may be required by law or agreed upon by
the parties with respect to the compensation payable to the Employee pursuant to
this section 3 (a) hereof.
(b) Employee received non-qualified stock options to purchase 1,747,253
shares of capital stock of the Company at $.01 per share as a consultant. The
aforementioned stock options allowed the Employee to acquire a 15% equity
position in the Company. The non qualified stock options vested as follows:
1/3 on May 1 1999;
1/3 on November 1, 1999;
1/3 on May 1, 2000.
Xx. Xxxxxxx'x 15% equity position was protected from dilution under the previous
agreement until the company raised approximately $20 Million in a public
offering. This provision will remain in effect as a part of this agreement. The
additional options issued to offset any dilution up to and until the public
offering is completed, will vest immediately.
In consideration for this agreement the remaining 1/3 of the shares to be vested
on May 1, 2000 will now vest as of the date of this agreement.
(c) As additional consideration for this agreement Xx. Xxxxxxx will
receive non-qualified stock options to purchase 1,000,000 shares of capital
stock of the Company at $.01 per share. Such options to vest as of the date of
this agreement.
(d) In the event of a change of control, any unvested options held by Xx.
Xxxxxxx shall vest immediately. For purposes hereof, "change of control" shall
mean the consummation by USM of a merger with another entity, or the sale of 50%
or more of the assets of the then outstanding shares of USM's capital stock
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(e) The Corporation shall reimburse the Employee for all normal, usual and
necessary expenses incurred by the Employee in furtherance of the business and
affairs of the Corporation against receipt by the Corporation of appropriate
vouchers or other proof of the Employee's expenditures and otherwise in
accordance with such Expense Reimbursement Policy as may from time to time be
adopted by the Board of Directors of the Corporation.
(f) The Employee shall accrue paid vacation at the rate of twenty (20)
business days per annum.
(g) The Corporation shall provide to the Employee and his spouse and
dependents, at the Corporation's expense, benefits of the type generally
available to the executives of similar companies, including but not limited to,
medical, life, dental, and disability insurance.
(h) The Corporation shall provide to the Employee a monthly car allowance
not to exceed six hundred and fifty dollars ($650.00) per month. The Corporation
shall also provide reimbursement for gasoline, repairs and insurance with
respect to Employee's vehicle.
(i) The expense reimbursements and benefits mentioned in paragraphs 3 (c),
3(d), 3(e) and 3(f) above shall begin on the date of this Agreement.
(j) The Employee will be entitled to participate in an annual bonus
program that will be initially targeted at 100% of his annual compensation based
on criteria established in a separate bonus plan. The employee will also be
entitled to participate in any stock option plan administered by the company.
4. RERESENTATIONS AND WARRANTIES BY THE EMPLOYEE AND CORPORATION
The employee hereby represents and warrants to the Corporation as follows:
(a) Neither the execution and delivery of this Agreement nor the
performance by the Employee of his duties and other obligations hereunder
violate or will violate any statute, law, determination or award, or conflict
with or constitute a default under (whether immediately, upon the giving of
notice or lapse of time or both) any prior employment agreement, contract, or
other instrument to which the Employee is a party or by which he is bound.
(b) The Employee has the full right, power and legal capacity to enter and
deliver this Agreement and to perform his duties and other obligations
hereunder. This Agreement constitutes the legal, valid and binding obligation of
the Employee enforceable against him in accordance with its terms. No approvals
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or consents of any persons or entities are required for the Employee to execute
and deliver the Agreement or perform his duties and other obligations hereunder.
The Corporation hereby represents and warrants to the Employee as follows:
(a) The Corporation is duly organized, validly existing and in good
standing under the laws of the State of Delaware, with all requisite corporate
power and authority to own its properties and conduct its business in the manner
presently contemplated.
(b) The Corporation has full power and authority to enter into this
Agreement and to incur and perform its obligations hereunder.
(c) The execution, delivery and performance by the Corporation of this
Agreement does not conflict with or result in a breach or violation of or
constitute a default under (whether immediately, upon the giving of notice or
lapse of time or both) the certificate of incorporation or by-laws of the
Corporation, or any agreement or instrument or by-laws of the Corporation.
(d) The Corporation does not now contemplate and will not in the future
require the performance by the Employee of acts that would conflict with his
obligations to any former employer or under applicable law.
(e) The Corporation will indemnify Employee with respect to his personal
liability for acts performed on behalf of the Corporation. This shall
specifically include indemnification for all prior liability or acts of the
company prior to his employment.
5. CONFIDENTIAL INFORMATION
(a) The Employee agrees that during the course of his employment or at any
time after termination, he will not disclose or make accessible to any other
person, the Corporation's products, services and technology, both current and
under development, promotion and marketing programs, lists, trade secrets and
other confidential and proprietary business information of the Corporation or
any of its clients. The Employee agrees: (i) not to use any such information for
himself or others; (ii) not to take any such material or reproductions thereof
from the Corporation's facilities at any time during his employment by the
Corporation, except as required in the Employee's duties to the Corporation. The
Employee agrees immediately to return all such material and reproductions
thereof in his possession to the Corporation upon request and in any event upon
termination of employment.
(b) Except with prior written authorization by the Corporation, the
Employee agrees not to disclose or publish any of the confidential, technical or
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business information or material of the Corporation, its clients or any other
party to whom the Corporation owes an obligation of confidence, at any time
during or after his employment with the Corporation.
(c) Specifically excluded from this provision, is the intellectual
property the employee brought to the company to develop its computer operating
systems. Such intellectual property will remain the sole property of the
employee.
6. COVENANT NOT TO COMPETE
The Employee hereby agrees not to compete with the Corporation while
employed by the Corporation as well as its lawful successors and assigns. The
term "not to compete" as used herein shall mean that the Employee shall not
directly or indirectly engage in a business or other activity associated with
prepaid wireless services;
Further, the Employee agrees not to compete for a period of one (1) year from
the date of termination of this Agreement in any market in which the Corporation
is then conducting business. In the event of any breach of this paragraph, the
Company shall be entitled to full injunctive relief without the need to post
bond, which rights shall be cumulative with and not necessarily successive or
exclusive of any other legal rights, that the Corporation may have.
7. TERMINATION
(a) The Employee's employment hereunder began on April 17, 2000 and shall
continue for the period set forth in Section 2 hereof unless sooner terminated
upon the first to occur of the following events:
(i) The death of the Employee or the disability of the Employee, as
defined below;
(ii) Termination of the Employee by the Board of Directors of
Corporation for just cause. Any of the following actions by the Employee shall
constitute just cause for termination:
(a) Material breach by the Employee of Section 5 or section 6
of this Agreement;
(b) Material breach by the Employee of any provision of this
Agreement other than Section 5 or section 6 which is not cured by the Employee
within thirty (30) days following written notice thereof from the Corporation;
(c) Any action by the Employee to intentionally harm the
Corporation;
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(d) Conviction of Employee of a felony involving crimes of
falsehood or moral turpitude.
(e) Willful act of fraud or malfeasance by Employee with
respect to the Corporation.
(iii) Termination by the Employee for just cause. Any of the
following actions or omissions by the Corporation shall constitute just cause:
(a) Material breach by the Corporation of any provision of
this Agreement which is not cured by the Corporation within fifteen (15) days
following written notice thereof from the Employee; or
(b) Any action by the Corporation to intentionally harm the
Employee.
(b) Upon termination pursuant to subparagraph (i) or (ii) of paragraph (a)
above, the Employee shall not be entitled to receive any additional compensation
for the term of the Agreement.
(c) Upon termination by the Corporation for any reason other than the
reasons set forth in subparagraph (i) or (ii) of paragraph (a) above or an
election by the Corporation not to renew this Agreement, or upon termination by
the Employee for any reason set forth in subparagraph (iii) of paragraph (a)
above, then the Corporation shall continue to pay the Employee, as the
Employee's sole damages for such termination, the Base Salary and previous
year's cash bonus that would have accrued for a period of twelve (12) months
following termination (hereinafter the "Severance Period"). In addition, the
Employee shall be entitled to all health and other benefits described in
paragraphs 3(d) and 3(e) above until the earlier of (i) the end of the Severance
Period or (ii) the date on which the Employee became entitled to health and
other benefits provided by a new employer. Employee will have six months to
exercise all vested options to purchase capital stock of the Company.
(d) The Employee shall have no duty to mitigate the Corporation's
obligations hereunder by seeking any other employment or consulting arrangements
during the Severance Period. If during the Severance Period the Employee becomes
entitled to health and other benefits provided by a new employer or contractor
at such new employer or contractor's expense, the Employee agrees to inform the
Corporation promptly of such entitlement and to cooperate with the Corporation
in terminating the Employee's coverage under the Corporation's benefit plan.
(e) For purposes of this Agreement, the "disability" of the Employee shall
be deemed to have occurred if, as a result of any injury, sickness or physical
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condition, the Employee is unable to perform his duties hereunder (excluding any
accrued vacation), for a period of thirty (90) days during any calendar year.
8. NOTICES
Any notice or other communication under this Agreement shall be in writing
and shall be deemed to have been given: when delivered personally against
receipt therefore; one (1) day after being sent by Federal Express or similar
overnight delivery; or three (3) days after being mailed registered or certified
mail, postage prepaid, return receipt requested, or one (1) day after being sent
telecopier (with mechanical telecopier confirmation of receipt), to either party
at the address set forth above, or to such other address as such party shall
give by notice hereunder to the other party.
9. SEVERABILITY OF PROVISIONS
If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, the remaining conditions and provisions or portions thereof
shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provision shall be deemed
dependent upon any other covenant or provision unless so expressed herein.
10. ENTIRE AGREEMENT; MODIFICATION
This Agreement contains the entire agreement of the parties relating to
the subject matter hereof and any previous agreement relating to Employee's
Employment by the Corporation are hereby considered null and void and of no
further force and effect, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
which are not set forth herein. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto.
11. BINDING EFFECT
The rights, benefits, duties and obligations under this Agreement shall
inure to, and be binding upon, the Corporation, its successors and assigns, and
upon the Employee and his legal representatives. This Agreement constitutes a
personal service agreement, and the performance of the Employee's obligations
hereunder may not be transferred or assigned by the Employee.
12. NON-WAIVER
The failure of either party to insist upon the strict performance of any
of the terms, conditions and provisions of this Agreement shall not be construed
as a waiver or relinquishment of future compliance therewith, and said terms,
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conditions and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.
13. GOVERNING LAW
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Florida without regard to the
principles of conflict of laws.
14. HEADINGS
The headings of paragraphs are inserted for convenience and shall not
affect any interpretation of this Agreement.
15. ATTORNEYS FEES, COSTS
In the event a party breaches this Agreement, the breaching party shall
pay all costs and attorneys' fees incurred by the other party in connection with
such breach, whether or not any litigation is commenced.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
U.S. MOBILE SERVICES, INC. (Corporation)
/s/ Xxxxx Xxxxxxx
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Employee
/s/ Xxxxx Xxxxxxx
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