EXHIBIT 10.9
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, dated as of September 28, 1999 by and among Madison River
Telephone Company LLC, a Delaware limited liability company ("Holdings"), and
Xxxxx X. Xxxxxx ("Executive").
RECITALS
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Holdings has two classes of equity, Class A equity and Incentive Equity further
divided as Class B equity and Class C equity, and the Class A equity will be
entitled to distributions prior to Incentive Equity of Class B equity and Class
C equity.
The parties have agreed that the aggregate fair market value of all Class C
equity to be distributed is $10,000 as of the date hereof.
In order to induce Executive to agree to serve as Managing Director - Chief
Technology Officer, Holdings desires to provide Executive with compensation and
other benefits (including the right to purchase Class C equity of Holdings) on
the terms and conditions set forth in this Agreement.
Executive is willing to enter into such employment and perform services for
Holdings on the terms and conditions set forth in this Agreement.
It is therefore hereby agreed by the parties as follows:
1. Employment.
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(a) Subject to the terms and conditions of this Agreement, Holdings agrees to
employ Executive in Madison River Communications, Inc., a subsidiary of
Holdings, ("MRCI") during the term hereof as Managing Director - Chief
Technology Officer. In his capacity as Managing Director - Chief Technology
Officer, Executive shall have the customary powers, responsibilities and
authorities of Managing Director - Chief Technology Officer of corporations of
the size, type and nature of Holdings, as they exist from time to time.
Executive shall also be Managing Director - Chief Technology Officer of
Holdings' subsidiaries as appointed by Holdings.
(b) Subject to the terms and conditions of this Agreement, Executive hereby
accepts employment as Managing Director - Chief Technology Officer and agrees to
devote his full working time and efforts, to the best of his ability, experience
and talent, to the performance of services, duties and responsibilities in
connection therewith. Nothing in this Agreement shall preclude Executive from
engaging, consistent with his duties and responsibilities hereunder, in
charitable and community affairs, from managing his personal investments or,
except as otherwise provided in Section 12 hereof, from serving as a member of
boards of directors or as a trustee of other companies, associations or
entities.
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2. Term of Employment.
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Executive's term of employment under this Agreement shall commence on the date
of the closing of Gulf Coast Services, Inc. (the "Commencement Date") and,
subject to the terms hereof, shall terminate on the fourth anniversary of the
Commencement Date ("Termination Date").
3. Compensation.
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3.1 Initial Compensation and Base Salary.
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Beginning on the Commencement Date, Executive shall be an employee of MRCI and
shall receive his pay and benefits from MRCI in accordance with the normal
business practices and policies of MRCI. Executive's base salary compensation
shall be $160,000 per year; however, may be increased or decreased based on
Executive and Holding's performance ("Base Salary"). The Base Salary shall be
payable in accordance with the ordinary payroll practices of MRCI but in no
event less often than monthly in arrears.
3.2 Adjustments to Base Salary. Base Salary shall be increased or
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decreased from time to time as the Board shall determine taking into account the
success of Holdings, the performance of Executive, the size, revenues, and
earnings of the businesses held or operated, or contemplated to be held or
operated, by Holdings and other market factors. Once so increased or decreased,
the increased amount shall constitute Executive's Base Salary hereunder.
3.3 Compensation Plans and Programs. Executive shall participate in any
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compensation plan or program, annual or long-term, maintained by Holdings and
participated in by senior executives of the Company generally on terms taking
into account Executive's title and position with the Company.
3.4 Expenses. Notwithstanding anything contained herein to the contrary
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(except the cost of the directors and officers insurance referred to in Section
13 (b) hereof, Executive is authorized to incur, and shall be reimbursed, only
for items approved by and in accordance with the policies and procedures of
MRCI.
4. Employee Benefits.
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4.1 Employee Benefit Programs, Plans and Practices. During the term of his
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employment hereunder, MRCI shall provide to Executive coverage under any
employee benefit programs, plans and practices (commensurate with his position
in Holdings and to the extent possible under any employee benefit plan), in
accordance with the terms hereof, which Holdings makes available to its senior
executive officers generally through MRCI, including but not limited to (i)
retirement, pension and profit-sharing, and (ii) medical, dental,
hospitalization, life insurance, short-and long-term disability, accidental
death and dismemberment and travel accident coverage.
4.2 Vacation and Fringe Benefits.
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(a) Executive shall be entitled to paid vacation each calendar year of no less
than 20 working days. MRCI may grant additional vacation time to Executive.
(b) In addition, Executive shall be entitled to all of the other perquisites and
fringe benefits accorded the senior officers of Holdings generally.
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5. Incentive Equity.
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5.1 Purchase Rights; Vesting.
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(a) As of the date hereof, Executive shall have the right to purchase at any
time from Holdings Class C equity of Holdings ("Incentive Equity") equal to
7.70% of the total Incentive Equity of Holdings for an aggregate purchase price
of $770. Within 30 days after each time that Executive exercises its right to
purchase Incentive Equity, the Executive will make an effective election with
the Internal Revenue Service under Section 83(b) of the Internal Revenue Code
and the regulations promulgated thereunder. The parties hereto agree that the
fair market value of the Incentive Equity allocated to Executive as of the date
hereof and for a period of at least five business days thereafter is $770 and
that they shall use that value for all Federal income tax purposes.
(b) As long as Executive is employed by Holdings, Executive's Incentive Equity
shall vest (except in the case of vesting pursuant to Section 5.3(a)) on a daily
basis over a four-year period beginning with the Commencement Date. All
unvested Incentive Equity will become fully vested immediately prior to the
occurrence of a Liquidity Event. "Liquidity Event" means (i) any sale of all or
substantially all of the assets of Holdings on a consolidated basis in one
transaction or series of related transactions (but excluding sales to
affiliates) for cash or marketable securities, (ii) any sale of 50% or more of
the Investor Equity (as defined in the LOI) in one transaction or series of
related transactions (but excluding sales to affiliates and, with respect to
individuals, related persons) for cash or marketable securities or (iii) a
merger, share exchange or similar transaction which accomplishes one of the
foregoing.
5.2 Distributions. Executive's unvested Incentive Equity outstanding at
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the time of any dividend or other distribution to Incentive Equity will be
entitled to receive the same distributions per unit as vested Incentive Equity.
5.3 Repurchase.
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(a) Executive's unvested Incentive Equity will be subject to repurchase in
whole by Holdings, at its option (which option to repurchase must be elected in
writing by Holdings within ten days of termination and, subject to such
repurchase option being suspended as provided below, consummation of such
repurchase must be effected within 80 days thereafter), at the lower of its
original cost (less all amounts distributed in respect of Executive's unvested
Incentive Equity) or its Fair Market Value at the time of termination if
Executive ceases to be employed by Holdings for any reason. Notwithstanding
anything in this agreement to the contrary, in the event that Executive's
employment is terminated for any reason including due to death or Disability
(but other than by the Executive without Good Reason) and (i) at or prior to
such termination Holdings has entered into an agreement or agreements regarding
a transaction or has publicly announced its intention to consummate a
transaction (including, but not limited to, a public announcement of an
intention to seek to consummate a transaction), which upon consummation would
trigger a Liquidity Event (as defined in the LOI), or (ii) at or within six
months prior to such termination is or was in active negotiations regarding a
transaction, which upon consummation would trigger a Liquidity Event, then in
either case Holdings' repurchase right pursuant to the foregoing sentence will
be suspended and if any such transaction is consummated then Executive's
unvested Incentive Equity shall immediately prior to the consummation of such
transaction become fully vested and all distributions that would have been
payable to Executive on account of such unvested Incentive Equity subsequent to
Executive's termination and prior to such vesting shall be made to Executive,
with interest on each such distribution at a rate per annum equal to the prime
rate in effect at the time of each
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such distribution, at such time, it being understood and agreed that, upon
exercise of the repurchase option, during such suspension and prior to any such
vesting hereunder, distributions that would have been payable to Executive on
account of such unvested Incentive Equity shall not be for the account of
Executive unless and until such Incentive Equity shall become vested; provided
that if none of such transactions is consummated within two years after
Executive's termination of employment, or within such two-year period another
transaction is consummated which constitutes a Liquidity Event, then Holdings'
above repurchase rights shall be reinstated. "Fair Market Value" shall mean,
with respect to any security, the amount that would be paid to the holder
thereof with respect to such security if all of the assets of Holdings were sold
for fair value to a willing buyer in exchange for cash, all of the debt and
other liabilities not assumed by the buyer were paid in full, all of the
convertible debt and other convertible securities were repaid or converted
(whichever yields more cash to the holders), and then Holdings were completely
liquidated.
(b) Executive's vested Incentive Equity will not be subject to repurchase in
whole or in part by Holdings.
5.4 Investors' Agreement. Holdings shall enter into an investors'
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agreement (the "Investors' Agreement"), registration agreement, and certain
other agreements with Executive and the other members of Holdings (collectively,
the "Investors") embodying the relevant terms set forth in the LOI.
5.5 Restrictions on Transfer of Incentive Equity. Other than pursuant to
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Tag-Along Rights, Registration Rights, and Other Exit Rights with respect to his
vested Incentive Equity (as such terms are defined in the LOI and as such
concepts may be incorporated in the agreements referred to in Section 5.4),
Executive may not transfer his Incentive Equity at any time (other than
transfers of Incentive Equity for estate-planning purposes to immediate family
members and trusts and/or other vehicles for the benefit of immediate family
members) without the approval of the members of the Board holding a majority of
the votes of all members of the Board who do not have pecuniary interest in such
transfer, which majority shall include approval by members of the Board holding
a majority of the votes of all of the members of the Board designated by the
Institutional Investors.
6. Termination of Employment.
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6.1 Termination Not for Cause or Termination for Good Reason.
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(a) (i) Holdings may terminate Executive's employment at any time, and
Executive may terminate his employment at any time. If Executive's employment is
terminated by Holdings other than for Cause (as defined herein) or due to
Executive's death or Disability (as defined herein) or Executive terminates his
employment for Good Reason prior to the Termination Date, Executive shall be
entitled to receive from Holdings continued Base Salary (payable in accordance
with the last sentence of Section 3.1 hereof) for three months after date of the
termination plus, on the sixtieth day following the end of the fiscal year
during which the termination of Executive's employment pursuant to this Section
6.1(a) occurs, an amount in respect of any bonus for the period employed for the
fiscal year in which Executive's employment is terminated calculated on a pro
rata basis.
(ii) In addition, Executive shall (1) be entitled to receive, within a
reasonable period of time after the date of termination, a cash lump sum equal
to (A) any compensation payments deferred by Executive, together with any
applicable interest or other accruals thereon; and (B) any unpaid amounts, as of
the date of such termination, in respect of any bonus for the fiscal year ending
before the fiscal year in which such termination occurs; (2) for the period from
the date of termination of Executive's employment until the one year anniversary
of the Termination Date (as then in effect), continue to be
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covered under and participate in Holdings' employee benefit programs, plans and
practices with respect to medical, dental, hospitalization, life insurance and
disability benefits described in Section 4.1 hereof or under such other plans of
Holdings which provide for equivalent coverage to the extent and on the terms in
effect on the Executive's last day of employment; and (3) have such rights to
payments under applicable plans or programs, accrued to Executive on date of
termination including, without limitation, those described in Section 3.3 hereof
as may be determined pursuant to the terms of such plans or programs.
(b) For purposes of this Agreement, "Good Reason" shall mean the occurrence of
any of the following events without Executive's express prior written
consent:
(i) the assignment to Executive by Holdings of duties not appropriate
to Executive's positions, responsibilities, titles and offices as set forth in
Section 1 hereof, or any material reduction by Holdings of Executive's duties or
responsibilities or any removal of Executive as the Managing Director - Chief
Technology Officer, except in connection with the termination of Executive's
employment (and not cured after 15 days prior notice to all of the members of
the Board);
(ii) a reduction by Holdings in Executive's Base Salary as in effect at
the commencement of employment hereunder or as the same may be increased from
time to time during the terms of this Agreement;
(iii) any material breach by Holdings of any provision of this Agreement
(not cured after 15 days' prior notice).
6.2 Disability. If (i) Executive shall fail for a period of six
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consecutive months during the term of his employment hereunder, because of
illness, physical or mental disability or other similar incapacity, to
effectively and actively render the services provided for by this Agreement or
(ii) at such earlier time as Executive submits satisfactory medical evidence
that he has or the Board in its reasonable judgment determines that Executive
has an illness, physical or mental disability or other incapacity which is
expected to prevent him from returning to the performance of his work duties for
six months or longer ("Disability"), Holdings or Executive may terminate
Executive's employment upon written notice thereof, setting forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
Executive's employment under this Section 6.2, and Executive shall receive or
continue to receive, as the case may be:
(a) as soon as practicable after the date of termination of Executive's
employment pursuant to this Section 6.2, a cash lump sum equal to any
compensation payments deferred by Executive, together with any applicable
interest or other accruals thereon;
(b) any unpaid amounts, as of the date of such termination, in respect of
any bonus for the fiscal year ending before such termination, which shall be
payable on the date on which such bonus would otherwise be payable;
(c) on the sixtieth day following the end of the fiscal year during which
the termination of Executive's employment pursuant to this Section 6.2 occurs,
an amount in respect of any bonus for the period employed for such fiscal year
calculated on a pro rata basis;
(d) for a period of one year after termination for Disability, amounts,
payable on Holdings' regular payroll schedule, equal to no less than 60% of
Executive's then annual Base Salary, reduced by
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any amounts received by Executive under any disability insurance policies with
respect to which Holdings paid the premiums;
(e) such rights to payments under applicable plans or programs, accrued to
Executive on the date of termination including, without limitation, those
described in Section 3.3 hereof, as may be appropriate pursuant to the terms of
such plans or programs.
6.3 Death. In the event of Executive's death during the term of his
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employment hereunder, Executive's estate or designated beneficiaries shall
receive:
(a) payments of Base Salary for a period of three months after his date of
death;
(b) as soon as practicable after the date of Executive's death, a cash
lump sum equal to any compensation payments deferred by Executive, together with
any applicable interest or other accruals thereon;
(c) any unpaid amounts, as of the date of Executive's death, in respect of
any bonus for the fiscal year ending before his death, which shall be payable on
the date on which such bonus would otherwise be payable;
(d) on the sixtieth day following the end of the fiscal year during which
Executive's death occurs, an amount in respect of any bonus during period
employed for such fiscal year calculated on a pro rata basis;
(e) any death benefits provided under the employee benefit programs, plans
and practices described in Section 4.1 hereof, in accordance with their terms;
and
(f) such other payments under applicable plans or programs accrued to
Executive on date of termination, including, but not limited to those described
in Section 3.3 hereof, as may be appropriate pursuant to the terms of such plans
or programs.
6.4 Voluntary Termination by Executive; Discharge for Cause.
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(a) In the event that Executive's employment is terminated by Holdings for
Cause, as hereinafter defined, or by Executive other than for Good Reason or
other than as a result of Disability or death, prior to the Termination Date,
Executive shall be entitled to receive all salary and benefits to which
Executive is entitled up to and including the date of Executive's termination of
employment hereunder. The obligations of Holdings under this Agreement to make
any further payments, or provide any benefits specified herein, to Executive
shall cease and terminate on the date on which Executive's employment is
terminated by Holdings for Cause or by Executive other than for Good Reason or
other than as a result of Permanent Disability or death. Termination of
Executive in accordance with this Section 6.4 shall be communicated to Executive
pursuant to a notice of a resolution of a majority of the Board determining that
Executive is subject to discharge for Cause as defined herein.
(b) As used herein, the term "Cause" shall mean commission of a felony or
crime involving moral turpitude, repeated failure to comply with the Board's
instructions (after 30 days' prior notice), and any other material breach of
this Agreement by Executive (after 30 days' prior notice).
6.5 [Deleted ].
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7. Notices. All notices or communications hereunder shall be in
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writing, addressed as follows:
To Holdings: Madison River Telephone Company LLC
P. O. Box 1167
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Board of Members
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
To Executive: Xxxxx X. Xxxxxx
Any such notice or communication shall be sent certified or registered mail,
return receipt requested, postage prepaid, or by facsimile (with confirmation of
receipt) addressed as above (or to such other address as such receiving party
may have designated in a notice duly delivered as described above), and the
actual date of mailing shall constitute the time at which notice was given
(except, in the case of facsimile, the time and date of confirmation shall be
the time at which notice was given).
8. Separability; Legal Fees; Arbitration. If any provision of this
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Agreement shall be declared to be invalid or unenforceable, in whole or in part,
such invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or claim
arising out of or relating to this Agreement or the breach of this Agreement
(other than Section 12 hereof) that cannot be resolved by Executive on the one
hand and Holdings on the other, including any dispute as to the calculation of
Executive's benefits or any payments hereunder, shall be submitted to
arbitration in Raleigh-Durham metropolitan area of North Carolina in accordance
with Delaware law and the procedures of the American Arbitration Association.
The determination of the arbitrators shall be conclusive and binding on Holdings
and Executive, and judgment may be entered on the arbitrators' award in any
court having jurisdiction. The expense of such arbitration including reasonable
legal fees in connection therewith shall be borne in accordance with the
direction of the arbitrators.
9. No Obligation to Mitigate Damages. Executive shall not be required to
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mitigate damages or the amount of any payment provided for under this Agreement
by seeking other employment or otherwise.
10. Assignment. This contract shall be binding upon and inure to the
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benefit of the heirs and representatives of Executives and the assigns and
successors of Holdings, but neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by Holdings,
except that Holdings may assign this Agreement to any successor (whether by
merger, purchase or otherwise) to all or substantially all of the stock, assets
or businesses of Holdings.
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11. Amendment. This Agreement may only be amended by written agreement of
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the Board and Executive.
12. Nondisclosure of Confidential Information; Non-Competition.
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(a) From and after the date hereof and at all times thereafter (except as
otherwise provided in Section 12(e)), Executive shall not, without the prior
written consent of Holdings, at any time divulge, disclose, use to the detriment
of Holdings or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information, except (i) while
employed by Holdings, in the business of and for the benefit of Holdings and to
the extent such use or disclosure is required or deemed advisable by Executive
in the performance of his assigned duties (provided that any Confidential
Information disclosed pursuant to this clause (i) shall remain Confidential
Information hereunder, except as provided below), or (ii) when required to do so
by a court of competent jurisdiction, by any governmental agency having
supervisory authority over the business of Holdings, or by any administrative
body or legislative body (including a committee thereof) with purported or
apparent jurisdiction to order Executive to divulge, disclose or make accessible
such information. Executive agrees to notify Holdings if Executive discloses
such information and to take reasonable efforts to preserve the confidential
nature of such information. For purposes of this Section 12(a), "Confidential
Information" shall mean information concerning Holdings' and its subsidiaries'
financial data, strategic business plans, business development (or other
proprietary product data), marketing plans, know-how, customer lists,
information about potential acquisition targets, acquisition strategies and
targets and other non-public, proprietary and confidential information of
Holdings, provided that Confidential Information shall not include information
if and solely to the extent that such information is or has become publicly
available through no wrongful act or breach of confidentiality by Executive.
(b) Executive agrees that he shall not directly or indirectly, either as
principal, manager, agent, consultant, officer, stockholder, partner, member,
investor, lender or employee or in any other capacity, carry on, be engaged in
or have any financial interest in, (i) during the time that Executive is
employed hereunder and for a period of three months thereafter, any business
that is engaged in the telephone or telecommunications industry and (ii) for a
period of 12 months after such three-month period, any business which is in
competition with the business of Holdings and/or its subsidiaries in a
geographic market where Holdings and/or its subsidiaries do business. In
addition, during the time that Executive is employed hereunder and for a period
of 15 months thereafter, Executive agrees that, without the prior written
consent of Holdings, he shall not solicit for employment any person who at any
time during Executive's employment hereunder was an employee of Holdings or any
of its subsidiaries.
(c) For purposes of Section 12(b)(ii) hereof, a business shall be deemed
in competition with Holdings and/or its subsidiaries if at the time of
Executive's proposed relationship with such business, such business is rendering
services being rendered by Holdings and/or its subsidiaries in one or more areas
that, at the time of Executive's termination hereunder, in the aggregate
accounted for more than 5% of operating gross annual sales of Holdings and its
subsidiaries. Nothing in this Section 12 shall be construed so as to preclude
Executive from investing in publicly traded securities of any company provided
Executive's beneficial ownership of any class of such company's securities does
not exceed 5% of the outstanding securities of such class.
(d) Executive and Holdings agree that the foregoing covenant not to
compete is a reasonable covenant under the circumstances, and further agree that
if in the opinion of any court of competent jurisdiction such restraint is not
reasonable in any respect, such court shall have the right, power and authority
to excise or modify such provision or provisions of such covenant as to the
court shall appear
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not reasonable and to enforce the remainder of the covenant as so amended.
Executive agrees that any breach of the covenants contained in this Section 12
would irreparably injure Holdings. Accordingly, Holdings may, in addition to
pursuing any other remedies it may have in law or in equity, obtain an
injunction against Executive from any court having jurisdiction over the matter,
restraining any further violation of this Section 12 by Executive.
(e) Executive hereby assigns and from time to time assigns to Holdings all
right, title and interest in and to any Intellectual Property conceived,
contributed to or made by Executive at any time prior to or during his
employment with Holdings (whether alone or jointly with others) to the extent
such Intellectual Property is not owned by Holdings as a matter of law.
Executive shall thereafter promptly and fully communicate to Holdings all such
Intellectual Property and shall cooperate with Holdings to protect Holdings'
interests in such Intellectual Property. Any copyrightable work prepared in
whole or in part by Executive in the course of his employment with Holdings
shall be deemed "a work made for hire" under the copyright laws, and Holdings
shall own all of the rights comprised in the copyright therein. This
cooperation shall include providing assistance in securing patent protection and
copyright registrations and signing all documents reasonably requested by
Holdings, even if such request occurs after termination of his employment with
Holdings. Executive understands that this Agreement does not apply to an
invention for which no equipment, supplies, facilities or trade secret
information of Holdings was used and which was developed entirely on his own
time, unless: (a) the invention relates (i) to the business (actual or
reasonably proposed) of Holdings or its subsidiaries, or (ii) to Holdings' or
its subsidiaries' research or development (actual or reasonably proposed); or
(b) the invention results from any work performed by Executive for Holdings or
its subsidiaries. "Intellectual Property" shall mean patent applications,
copyrightable works, mask works and applications for registration related
thereto, all Confidential Information, and all other intellectual property
rights created, conceived or owned by, Holdings or any of its subsidiaries or
for the benefit of an enterprise similar to Holdings or any of its subsidiaries.
Notwithstanding anything in this Agreement to the contrary, if the LOI is
terminated in accordance with its terms or the transactions contemplated thereby
are otherwise abandoned by Holdings, Holdings acknowledges and agrees that it
shall have no right to the Intellectual Property and the Intellectual Property
may be used by Executive and each of the other Investors in pursuit of an
enterprise similar to Holdings in accordance with Section 14(ii) of the LOI and,
further, Executive shall have no further obligations pursuant to this Section
12.
(f) Executive shall deliver to Holdings at any time Holdings may request,
all Intellectual Property in his possession and control, and all copies thereof,
in whatever form or medium. At Holdings' request, Executive shall sign a written
confirmation that Executive has returned all such materials. Executive agrees
that the limitations in this Section 12 are reasonable and necessary to protect
the legitimate business interests of Holdings and its affiliates.
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13. Indemnification; Director and Officer Insurance.
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(a) Holdings hereby agrees, commencing on the date hereof, to indemnify
and hold harmless Executive to the same extent as the fullest extent permitted
under Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL"), excluding subsection (f) thereof, as the same now exists or may
hereafter be amended, substituted or replaced (but, in the case of any such
amendment, only to the extent that such amendment permits Holdings to provide
broader indemnification rights than DGCL permitted prior to such amendment),
against all expenses, liabilities and losses (including attorneys' fees,
judgments, fines, excise taxes or penalties) reasonably incurred or suffered by
Executive in connection with serving as an officer, director, employee or agent
of Holdings or for serving at the request of Holdings as an officer, director,
employee or agent of another corporation, partnership, joint venture, limited
liability company, trust or other enterprise. Expenses, including attorneys'
fees, incurred by Executive in defending a proceeding shall be paid by Holdings
in advance of the final disposition of such proceeding, including any appeal
therefrom, upon receipt of an undertaking by or on behalf of Executive to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by Holdings. This Section 13(a) shall survive termination of this
Agreement.
(b) Holdings agrees that commencing as soon as practicable after the date
hereof it will maintain director and officer liability insurance for the purpose
of covering all actions taken by Executive as an officer, director, employee or
agent of Holdings which insurance is reasonably deemed necessary by Executive
and is approved by the Board (which approval shall not be unreasonably
withheld).
14. Beneficiaries; References. Executive shall be entitled to select (and
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change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder in
accordance with the terms hereof following Executive's death, and may change
such election, in either case by giving Holdings written notice thereof. In the
event of Executive's death or a judicial determination of his incompetence,
reference in this Agreement to Executive shall be deemed, where appropriate, to
refer to his beneficiary, estate or other legal representative.
15. Survivorship. The respective rights and obligations of the parties
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hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section 15 are in addition to the survivorship provisions of
any other section of this Agreement.
16. Governing Law. This Agreement shall be construed, interpreted and
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governed in accordance with the laws of the State of Delaware, without reference
to rules relating to conflict of laws.
17. Withholding. Holdings shall be entitled to withhold from any payment
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hereunder any amount required by law to be withheld.
18. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original.
19. Executive Representations. Executive hereby represents and warrants to
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Holdings that (i) the Incentive Equity will be acquired for the Executive's own
account and not with a view to, or intention
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of, distribution thereof in violation of the Securities Act of 1933, as amended
(the "Securities Act"), or any applicable state securities laws, and the
Incentive Equity will not be disposed of in contravention of the Securities Act
or any applicable state securities laws, (ii) the Executive is an executive
officer of Holdings, is sophisticated in financial matters and is able to
evaluate the risks and benefits of the investment in the Incentive Equity, (iii)
the Executive is able to bear the economic risk of his investment in the
Incentive Equity for an indefinite period of time and the Executive understands
that the Incentive Equity has not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under the Securities
Act or an exemption from such registration is available and all other applicable
restrictions on transfer have been satisfied, (iv) the Executive has
participated significantly in the structuring of the equity of Holdings, has had
an opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of the Incentive Equity and has had full access to
such other information concerning Holdings as he has requested, (v) the
execution, delivery, and performance of this Agreement by Executive does not and
will not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which Executive is a party
or by which he is bound, (vi) Executive is not a party to or bound by any
employment agreement, non-compete agreement or confidentiality agreement with
any other Person and (vii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms. Executive hereby
acknowledges and represents that he has consulted with independent legal counsel
regarding his rights and obligations under this Agreement and that he fully
understands the terms and conditions contained herein.
20. Executive agrees that (i) in the event that any of Executive's equity
interest in Holdings is evidenced by a certificate, such certificate shall
contain an appropriate legend referring to this Agreement and (ii) no transfers
of any equity interest or portion thereof in Holdings shall be made except in
compliance with applicable securities laws.
21. Complete Agreement. This Agreement, those documents expressly referred
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to herein (including, without limitation, the LOI) and other documents of even
date herewith embody the complete agreement and understanding among the parties
and supersede and preempt any prior understandings, agreements or
representations by or among Holdings and Executive, written or oral, which may
have related to the subject matter hereof in any way. No waiver of this
Agreement or of any of the terms or provisions hereof shall be binding upon
either party hereto unless confirmed by a written instrument signed by such
party. No waiver by Executive or Holdings of any term or provision of this
Agreement or of any default hereunder, nor any failure or delay in exercising
any right, option, power or privilege hereunder, shall affect Executive's or
Holdings' respective rights hereafter to enforce such term or provision or to
exercise any such right, option, power or privilege, or to exercise any right or
remedy in the event of any other default, whether or not similar.
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IN WITNESS WHEREOF, Executive and Holdings have caused this Employment Agreement
to be executed as of the date first written above.
MADISON RIVER TELEPHONE COMPANY LLC
By XXXX X. XXXX
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XXXXX X. XXXXXX
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Executive
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