EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made , 1997, by and between
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CI MERGER CORPORATION (the "Company"), a Pennsylvania corporation, and
XXXXXXXX X. XXXXXXX, XX. (the "Employee"), of
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, Pennsylvania.
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BACKGROUND
Pursuant to an Agreement and Plan of Merger dated March 14, 1997, by
and among Conestoga Enterprises, Inc. ("CEI"), Infocore, Inc. ("Infocore")
and the Company, Infocore in the near future will be merged with and into
the Company, which will be the surviving corporation. Pursuant to such plan
of merger (the "Plan of Merger"), as of the Effective Date of the merger
specified therein (the "Effective Date"), the corporate name of the Company
will become "Infocore, Inc.". The Employee is currently President and Chief
Executive Officer of Infocore and the parties have agreed that he shall be
employed by the Company as of the Effective Date under the terms and
provisions contained in this Agreement.
AGREEMENT
Therefore, each intending to be legally bound hereby, the parties
agree as follows:
1. Employment and Employment Duties. Under the terms and conditions
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contained in this Agreement, the Company employs the Employee as President
and Chief Executive Officer and the Employee accepts such employment. The
Employee's employment duties shall be those specified for the President of
the Company in the Company's by-laws and those additional duties,
commensurate with such position, assigned by the Board of Directors of the
Company (the "Board"). The Employee shall report directly to the Board. The
Employee's employment shall be on a full-time basis and he shall not be
engaged or employed in other business activities (whether for pecuniary
advantage or not) during the term of this Agreement, except that he shall
be permitted to serve on the boards of directors of business or charitable
organizations, provided such service does not materially affect the
performance of his employment duties for the Company. The Employee shall
discharge his employment duties in a diligent and conscientious fashion.
2. Term. The Employee's employment hereunder shall be for a period
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of two (2) years, commencing upon the Effective Date. Notwithstanding the
foregoing: (i) the Company may terminate the Employee's employment at any
time (A) upon fifteen (15) days prior written notice for any reason or for
no reason, or (B) without prior notice for cause (as defined below); and
(ii) the Employee may terminate the Employee's employment at any time
without prior notice for any reason or for no reason. For purposes of this
Agreement, the Employee's employment shall be deemed to have been
terminated for cause in the event the Company terminates it as a result of:
(a) the Employee's breach of his confidentiality obligations
specified in Section 5;
(b) the willful failure or refusal by the Employee to perform any
of his material employment duties or his material obligations under this
Agreement which shall not have ceased or been corrected within fifteen (15)
days following a written warning from the Company; or
(c) the commission of any act or the failure to act by the
Employee which constitutes a crime or offense involving money or other
property of any of the CEI Companies (as defined in Section 5) or which
constitutes a felony in the jurisdiction involved.
3. Severance Compensation.
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3.1 General Rule. Unless the provisions of Section 3.2 apply,
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in the event of the termination of the Employee's employment by the Company
other than for cause prior to the expiration of the two (2) year term
referred to in Section 2, the Company shall be obligated to pay to the
Employee, within fifteen (15) days after the date of termination, an amount
equal to the greater of: (i) fifty percent (50%) of the Employee's annual
salary determined as of the date of termination of employment, or (ii) the
aggregate salary otherwise payable to the Employee for the balance of the
two (2) year term referred to in Section 2, determined as of the date of
termination of employment.
3.2 Change of Control. If, during the term of this Agreement,
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the Employee's employment with the Company is terminated within ninety (90)
days of the date of a change of control (as defined below), either by the
Employee or by the Company other than for cause, the Company shall pay to
the Employee, within fifteen (15) days of the date of termination of
employment, an amount equal to the greater of: (i) the amount payable to
the Employee as determined by the application of the provisions of Section
3.1, or (ii) one and one-half (1.5) times the Employee's annual salary,
determined as of the date of termination of employment. The Company shall
be obligated to make such payment in lieu of, and not in addition to, the
Company's payment obligations under Section 3.1. For purposes of this
Agreement, a change of control shall be deemed to have occurred in the
event of: (i) the acquisition, directly or indirectly, by any person or
entity, or persons or entities acting in concert, whether by purchase,
merger, consolidation or otherwise, of voting power over that number of
voting shares of the capital stock of either the Company or CEI which, when
combined with the existing voting power of such persons or entities, would
enable them to cast fifty percent (50%) or more of the votes which all
shareholders of the Company or CEI, respectively, would be entitled to cast
in the election of directors of either the Company or CEI, or (ii) the
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets of the
Company to a transferee other than CEI or a company or entity of which a
controlling interest is owned by CEI.
3.3 Termination for Cause. In the event of the termination of
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the Employee's employment at any time by the Company for cause, the Company
shall have no obligation to pay the Employee any sums following the
termination of his employment.
4. Compensation. As compensation for the performance of his
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employment duties, during the term hereof the Company shall pay or provide
to the Employee the following:
(a) A salary in the annual amount of One Hundred Two Thousand
Dollars ($102,000), payable in accordance with the Company's normal payroll
practices in effect from time to time. The Employee's salary shall be
reviewed by the Board at the same time and in the same manner as is
customary for the employees of CEI and its subsidiaries and may be
increased, in the sole discretion of the Board, based upon the Employee's
satisfactory performance of his employment duties.
(b) The provision of those fringe benefits which were provided to
the Employee in his position as President and CEO of Infocore as of the
Effective Date under plans or insurance policies maintained by the Company
from time to time, but in no event having benefits less than comparable to
those of Infocore. Such fringe benefits include four (4) weeks paid
vacation, personal use of a Company automobile, medical health and
disability
insurance coverage, inclusion in the Company's 401(k) profit sharing plan
and its officers' profit sharing plan, and reimbursement of business
expenses under policies similar to those in effect with Infocore.
(c) Maintenance of a life insurance policy insuring the
Employee's life with a death benefit of Three Hundred Fifty Thousand
Dollars ($350,000.00) payable to the beneficiary or beneficiaries
designated by the Employee.
5. Confidentiality. The Employee acknowledges that he has had, and
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in fulfilling his duties under this Agreement he will have, access to
confidential information regarding the business and financial affairs of
the Company, CEI, and/or the other subsidiaries of CEI (collectively, the
"CEI Companies"). The Employee hereby agrees to hold all such information
in the strictest confidence, to discuss such information only with
authorized personnel of the CEI Companies, and, except as required by law
or compelled by legal process, to refrain from disclosing such information
to any other party, both during the term of this Agreement and after the
termination hereof. The provisions of this Section 5 shall not apply to
information which is or becomes generally available to or known by the
public other than as a result of disclosure by the Employee.
6. Covenant Not to Compete. The Employee agrees that, in order to
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protect the legitimate interests and property rights of the Employer, for a
period of one (1) year after the termination of the Employee's employment
with the Company (regardless of the reason for the termination), the
Employee shall not:
(a) Engage, directly or indirectly, either as owner, partner,
agent, employee, consultant, member, or shareholder, or otherwise operate,
control, join or participate in, lend money to, or be connected with any
commercial enterprise or business which is engaged within the Territory (as
defined below) in any facet of the wireless telecommunications business
carried on by any of the CEI Companies as of the date of termination of the
Employee's employment;
(b) Approach, solicit, contact, or otherwise establish a business
relationship with any customer of any of the CEI Companies or any
prospective customer of any of the CEI Companies with whom any of such
companies has had significant contact on or before the date of termination
of the Employee's employment, for a purpose related to the business carried
on by any of the CEI Companies as of the date of termination of the
Employee's employment;
(c) Assist any other person, partnership, corporation, limited
liability company, or other entity in the pursuit of the activities from
which the Employee is prohibited in engaging under the provisions of
Subsections (a) and (b) above; or
(d) Induce by active solicitation any present or future employees
or agents of the Company or the other CEI Companies to directly or
indirectly engage in any competitive business or to terminate their
employment with any of the CEI Companies.
For purposes of this Agreement, the term "Territory" shall mean those
geographical areas encompassed by the Reading, Pottsville, Sunbury, and
Williamsport Basic Trading Areas, as defined by the Federal Communications
Commission for the issuance of personal communication services licenses.
Nothing contained in this Section 6 shall prohibit the Employee from: (i)
investing in and owning securities issued by any publicly-held company
which are traded on any recognized securities exchange or in the over-the-
counter market; or (ii) accepting employment, after termination of his
employment with the Company, with a customer of the Company which is not a
significant customer.
7. Equitable Relief. The Employee recognizes and agrees that, in
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the event of a breach or threatened breach of his covenants and obligations
contained in Section 5 and/or Section 6 of this Agreement, the Company will
suffer irreparable harm and damage, that such harm and damage may be
extremely difficult or impossible to quantify, and that therefore the
Company shall be entitled to injunctive relief. Nothing contained herein,
however, shall be construed as precluding the Company from pursuing any
other remedies available to it for such breach or threatened breach,
including the recovery of damages at law.
8. Restrictions Excessive. In the event the restrictions imposed by
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the covenant contained in Section 6 are deemed by any court having
jurisdiction to be unreasonable or otherwise unenforceable by reason of
their duration, territory or the scope of the activities prohibited, it is
agreed by the parties that such court may construe and enforce this
Agreement by reducing the time period, territory, or scope of activities to
an extent which such court deems to be reasonable and enforceable.
9. Severability. If any provision or provisions of this Agreement
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shall be deemed to contravene or be invalid under the laws of any
jurisdiction where this Agreement is in force, the parties agree that such
contravention or invalidity shall not invalidate the entire Agreement, but
it shall be construed as not containing the particular provision or
provisions held to be invalid and the rights and obligations of the parties
shall be construed and enforced accordingly.
10. Miscellaneous.
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(a) This Agreement shall be construed, interpreted and enforced
in accordance with the laws (but not the law of conflict of laws) of the
Commonwealth of Pennsylvania.
(b) This Agreement and its provisions shall be binding upon and
inure to the benefit of the respective legal representatives, successors,
heirs, and permitted assigns of the parties. The Employee shall not assign
any of his rights nor delegate any of his duties under this Agreement
without the prior written consent of the Company.
(c) This Agreement constitutes the entire Agreement between the
parties and supersedes all prior negotiations, understandings and
agreements of any nature whatsoever, whether oral or written, with respect
to the subject matter hereof. No amendment, waiver or discharge of any
provision of this Agreement shall be effective against any party, unless
that party shall have consented thereto in writing.
(d) The headings to the sections of this Agreement are inserted
only for convenience of reference and are not intended, nor shall they be
construed, to modify, define, limit or expand the intent of the parties as
expressed in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
WITNESS: CI MERGER CORPORATION
By:
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President
(SEAL)
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Xxxxxxxx X. Xxxxxxx, Xx.
INTENDING TO BE LEGALLY BOUND HEREBY, CONESTOGA ENTERPRISES, INC.
hereby guarantees the performance of all of the obligations of and payment
of all sums due from CI Merger Corporation under the foregoing Employment
Agreement.
CONESTOGA ENTERPRISES, INC.
By:
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President
