EXHIBIT 10.2
Form of Employment Agreement
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of January 1,
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2002 between ___________ (the "Executive") and NTELOS Inc., a Virginia
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corporation (the "Company"), recites and provides as follows:
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WHEREAS, the Company considers it essential to the best interests of
its shareholders to xxxxxx the continuing employment of its key management
personnel;
WHEREAS, the Board of Directors of the Company (the "Board") expects
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that the Executive will continue to make substantial contributions to the growth
and prospects of the Company; and
WHEREAS, the Executive will continue to serve the Company in reliance
upon the undertakings of the Company contained herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein, the receipt and sufficiency of which are hereby
acknowledged by each of the parties, the Company and the Executive agree as
follows:
1. Employment.
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(a) Position. On the terms and subject to the conditions set forth
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herein, the Company agrees to employ the Executive as _________ throughout the
Employment Term (as defined below). At the request of the Board and without
additional compensation, the Executive shall also serve as an officer and/or
director of any or all of the subsidiaries of the Company.
(b) Duties and Responsibilities. The Executive shall have such duties
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and responsibilities that are consistent with the Executive's position as the
Board determines and shall perform such duties and carry out such
responsibilities to the best of the Executive's ability for the purpose of
advancing the business of the Company and its subsidiaries. Subject to the
provisions of Section 1(c) below, during the Employment Term the Executive shall
devote the Executive's full business time, skill and attention to the business
of the Company and its subsidiaries, and, except as specifically approved by the
Board, shall not engage in any other business activity or have any other
business affiliation.
(c) Other Activities. Anything in this Agreement to the contrary
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notwithstanding, as part of the Executive's business efforts and duties on
behalf of the Company, the Executive may participate fully in social, charitable
and civic activities, and, if specifically approved by the Governance Committee
of the Board, the Executive may serve on the boards of directors of other
companies, provided that such activities do not unreasonably interfere with the
performance of and do not involve a conflict of interest with the Executive's
duties or responsibilities hereunder.
2. Employment Term. Subject to the provisions of Section 4 hereof, the
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"Employment Term" hereunder shall commence on the date of this Agreement and
shall continue for a period of two (2) years [30 months with respect to the
Chief Operating Officer][three (3) years with respect to the Chief Executive
Officer].
3. Compensation. During the Employment Term, the Company will pay and/or
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otherwise provide the Executive with compensation and related benefits as
follows:
(a) Base Salary. The Company agrees to pay the Executive, for
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services rendered hereunder, an initial base salary at the annual rate of
$______ (the "Base Salary"). Base Salary will be reviewed annually throughout
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the Employment Term by the Compensation Committee of the Board. The Base Salary
shall be payable in equal periodic installments, not less frequently than
monthly, less any sums which may be required to be deducted or withheld under
applicable provisions of law. The Base Salary for any partial year shall be
prorated based upon the number of days elapsed in such year.
(b) Long-Term Stock-Based Incentive Compensation. During each year of
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the Employment Term, the Executive shall be eligible to participate in the
Company's Long-Term Stock-Based Incentive Compensation program ("Stock-Based
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Incentive Payment").
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(c) Supplemental Retirement Plan. During the Employment Term (and
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thereafter to the extent expressly provided herein), the Executive shall be
entitled to participate in the NTELOS Inc. Executive Supplemental Retirement
Plan according to the terms thereof, and the Executive's designation as a
participant in such plan shall not be revoked or rescinded prior to the
termination of the Executive's employment with the Company.
(d) Management Incentive Plan. The Executive shall be eligible to
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participate in the Company's management incentive plan with an annual incentive
target of _____ percent (___%) of Base Salary ("Incentive Payments"), subject to
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achievement of such program's objectives and final approval of the Board.
(e) Benefits. During the Employment Term (and thereafter to the
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extent expressly provided herein), the Executive shall be entitled to
participate in all of the Company's employee benefit plans applicable to the
Company's comparable senior executives, including the Company's 401(k)
restoration plan, according to the terms of those plans. In addition to the
foregoing compensation, the Company agrees that during the Employment Term it
shall provide to the Executive an monthly automobile allowance pursuant to
Company policy.
(f) Vacation. The Executive shall be entitled to a minimum of four
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weeks of vacation annually, during which time the Executive shall receive
compensation in accordance with the terms of this Agreement.
(g) Term Life Insurance. During the Employment Term, and in addition
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to any other benefits to which Executive shall be entitled, the Company agrees
to pay the premiums on a term life insurance contract covering the Executive
that pays a death benefit of at least $225,000 [$360,000 with respect to the
Chief Operating Officer][$645,000 years with respect to the Chief Executive
Officer]. The Company in its discretion shall select the term life insurance
contract on
which it will pay the premiums; but, the Executive shall be the owner of such
contract and will be or will designate the beneficiary of such contract. The
Company (i) will include and report such premium payments in the Executive's
taxable income and (ii) also will pay to the Executive an additional payment in
an amount such that after payment by the Executive of all taxes imposed on the
additional payment, the Executive retains an amount of the additional payment
equal to the taxes imposed upon the Executive with respect to the Company's
payment of the premiums on the term life insurance contract. The calculation of
the additional payment will be made consistent with the principles described in
Section 6(b)(ii) of this Agreement. Notwithstanding any other provision of this
Agreement, in the event the term life insurance contract described herein
extends beyond the termination of Executive's employment with the Company, the
Executive, and not the Company, shall be obligated to pay the premiums on such
term life insurance contract accruing after the Executive's termination of
employment with the Company.
4. Termination of Employment.
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(a) By the Company For Cause. The Company may terminate the
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Executive's employment under this Agreement at any time for Cause (as defined in
Section 4(f)) by delivery of written notice of termination to the Executive
(which notice shall specify in reasonable detail the basis upon which such
termination is made) at least ten days prior to the termination date set forth
in such notice. In the event the Executive's employment is terminated for Cause,
all provisions of this Agreement (other than Section 7 through 12, and 14
through 16 hereof) and the Employment Term shall be terminated; provided,
however, that such termination shall not divest the Executive of any previously
vested benefit or right. In addition, the Executive shall be entitled to payment
of the Executive's earned and unpaid Base Salary to the date of termination. The
Executive also shall be entitled to unreimbursed business and entertainment
expenses in accordance with the Company's policy, and unreimbursed medical,
dental and other employee benefit expenses incurred in accordance with the
Company's employee benefit plans (hereinafter referred to as the "Standard
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Termination Payments").
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(b) Upon Death or Disability. If the Executive dies, all provisions
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of Section 3 of this Agreement (other than rights or benefits arising as a
result of such death) and the Employment Term shall be automatically terminated;
provided, however, that an amount equal to the earned and unpaid Base Salary and
Incentive Payments to the date of death and the Standard Termination Payments
shall be paid to the Executive's surviving spouse or, if none, the Executive's
estate, and the death benefits under the Company's employee benefit plans shall
be paid to the Executive's beneficiary or beneficiaries as properly designated
in writing by the Executive. If the Executive is unable to perform the
Executive's responsibilities under this Agreement by reason of physical or
mental disability or incapacity ("Disability") and such disability or incapacity
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shall have continued for six consecutive months or any period aggregating six
months within any 12 consecutive months, the Company may terminate this
Agreement and the Employment Term at any time thereafter. In such event, the
Executive shall be entitled to receive the Executive's normal compensation
hereunder during said six month period, and shall thereafter be entitled to
receive an amount equal to the Base Salary that the Executive would have been
entitled to receive for a period of 24 [30 months with respect to the Chief
Operating Officer][36 months with respect to the Chief Executive Officer].
months, Incentive Payments and the Standard Termination Payments. The portion of
the payment
representing Base Salary and the Incentive Payment shall be paid in a lump sum
on a net present value basis, using a reasonable discount rate determined by the
Board. Incentive Payments, in the event of the Executive's disability, shall be
the target Incentive Payments that the Executive would have been entitled to
receive for one (1) year multiplied by two (2) [two and one-half (2.5) with
respect to the Chief Operating Officer][three (3) with respect to the Chief
Executive Officer]..
(c) By the Company Without Cause.
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(i) The Company may terminate the Executive's employment under
this Agreement without Cause, and other than by reason of the Executive's death
or disability, by sending written notice of termination to the Executive, which
notice shall specify a date within ten (10) days after the date of such notice
as the effective date of such termination (the "Termination Date"). From the
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date of such notice through the Termination Date, the Executive shall continue
to perform the normal duties of the Executive's employment hereunder, and shall
be entitled to receive when due all compensation and benefits applicable to the
Executive hereunder. Thereafter, subject to Section 4(e), the Company shall pay
the Executive an amount equal to the Base Salary for a period of 24 months [30
months with respect to the Chief Operating Officer][36 months with respect to
the Chief Executive Officer]. (the "Termination Period"), in such periodic
installments as were being paid immediately prior to the Termination Date.
(ii) The Company shall pay the Executive the target Incentive
Payments that the Executive would have been entitled to receive during the
Termination Period in a lump sum on a net present value basis, using a
reasonable discount rate determined by the Board.
(iii) The Company shall also be obligated to pay to the
Executive the Standard Termination Payments.
(iv) During the Termination Period, the Executive and the
Executive's dependents will be entitled to continued participation in the
"employee welfare benefit plans" (as defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974) in which the Executive participated on
the Executive's Termination Date. In lieu of such continued coverage, the
Executive will be reimbursed, on a net after-tax basis, for the cost of
individual insurance coverage for the Executive and the Executive's dependents
under a policy or policies that provide benefits not less favorable than the
benefits provided under such employee welfare benefit plans. The coverage
provided under this subsection (iii) shall be secondary to any coverage provided
to the Executive and the Executive's dependents by another employer of the
Executive.
(v) In addition, on the Termination Date all of the
Executive's outstanding stock options and other stock awards that are not then
vested shall immediately vest and become exercisable in full, notwithstanding
the provisions thereof.
(d) By the Executive. The Executive may terminate the Executive's
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employment, and any further obligations which the Executive may have to perform
services on behalf of the Company hereunder at any time after the date hereof,
by sending written notice of termination to
the Company not less than sixty (60) days prior to the effective date of such
termination. During such sixty (60) day period, the Executive shall continue to
perform the normal duties of the Executive's employment hereunder, and shall be
entitled to receive when due all compensation and benefits applicable to the
Executive hereunder. Except as provided below, if the Executive shall elect to
terminate the Executive's employment hereunder (other than as a result of the
Executive's death or disability), then the Executive shall remain vested in all
vested benefits provided for hereunder or under any benefit plan of the Company
in which the Executive is a participant and shall be entitled to receive the
Standard Termination Payments, but the Company shall have no further obligation
to make payments or provide benefits to the Executive under Section 3 hereof.
Anything in this Agreement to the contrary notwithstanding, the termination of
the Executive's employment by the Executive for Good Reason (as defined in
Section 4(f)), subject to Section 4(e) below, shall be deemed to be a
termination of the Executive's employment without Cause by the Company for
purposes of this Agreement, and the Executive shall be entitled to the payments
and benefits set forth in Section 4(c) above.
(e) Upon a Change in Control. Anything in this Section 4 to the
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contrary notwithstanding, if the Executive's employment is terminated on or
after a Change in Control (as defined in Section 4(f)), either (A) by the
Company without Cause or (B) by the Executive with Good Reason, then the
payments set forth in Section 4(c) shall not apply to the Executive, and the
Executive shall be entitled only to the compensation, entitlements and other
benefits set forth in Section 5 of this Agreement, provided that such
compensation, entitlements, and other benefits shall not be less than the
Executive otherwise would have received under Section 4(c) of this Agreement.
(f) Definitions. For purposes of this Agreement, the following
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definitions will apply:
(i) Cause. The term "Cause" means: (i) gross or willful
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misconduct; (ii) willful and repeated failure to comply with the lawful
directives of the Board or any supervisory personnel; (iii) any criminal act or
act of dishonesty or willful misconduct that has a material adverse impact on
the property, operations, business or reputation of the Company or its
subsidiaries or any act of fraud, dishonesty or misappropriation involving the
Company or its subsidiaries; (iv) any conviction or plea of guilty or nolo
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contendere to a felony or a crime involving dishonesty; (v) the material breach
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of the terms of any confidentiality, non-competition, non-solicitation or
employment agreement the employee has with the Company or its subsidiaries; (vi)
acts of malfeasance or negligence in a matter of material importance to the
Company or its subsidiaries; (vii) the material failure to perform the duties
and responsibilities of employee's position after written notice and a
reasonable opportunity to cure (not to exceed 90 days); (viii) grossly negligent
conduct; or (ix) activities materially damaging to the property, operations,
business or reputation of the Company or its subsidiaries (it being understood
that conduct or activities pursuant to employee's exercise of good faith
business judgment shall not be in violation of this Section 4(f)(i)). For
purposes of this Agreement, Executive will also be deemed to be terminated for
"Cause" if, in connection with the sale, transfer, conveyance or other
disposition of all or substantially all of the assets (whether by asset sale,
stock sale, merger, combination or otherwise) of one or more of the Company's
Material Lines of Business (a "Material Line of Business Sale"), (i) one or more
of the purchasers in such Material Line of Business Sale offers employment (the
"Employment Offer") to Executive which Employment Offer would not permit
Executive to terminate employment pursuant to clauses (i), (ii), (iii), (iv)
or (v) of the definition of Good Reason contained herein, (ii) Executive
declines such Employment Offer, and (iii) the Company terminates Executive's
employment within six (6) months of the consummation of the Material Line of
Business Sale.
(ii) Change in Control. The term "Change of Control" means:
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(A) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, any trustee or other
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fiduciary holding securities under an employee benefit plan of
the Company, or any company owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions
as their ownership of stock of the Company), is or becomes the
owner or "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of Company securities
representing more than 30% of the combined voting power of the
then outstanding securities;
(B) during any period of two consecutive years (not including
any period prior to the execution of this Agreement), individuals
who at the beginning of such period constitute the Board, and any
new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a
transaction described in clause (A), (C), (D) or (E) of this
subsection) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote of
a majority of the directors then still in office who either (l)
were directors at the beginning of such period or (2) were so
elected or nominated with such approval, cease for any reason to
constitute at least a majority of the Board;
(C) the shareholders of the Company approve a merger or
consolidation of the Company with any other Company and such
merger or consolidation is consummated, other than (l) a merger
or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of
the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation or (2) a merger or consolidation effected
to implement a recapitalization of the Company (or similar
transaction) in which no "person" (as hereinabove defined)
acquires more than 30% of the combined voting power of the
Company's then outstanding securities;
(D) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets and such liquidation or sale of assets is
consummated; or
(E) the sale, transfer, conveyance or other disposition of all
or substantially all of the assets (whether by asset sale, stock
sale, merger, combination or otherwise) of one or more of the
Company's Material Lines of Business;
provided, however, a Change in Control shall not include an
acquisition, directly or indirectly, of more than 30% of the
combined voting power of the Company's then outstanding
securities by Welsh, Carson, Xxxxxxxx & Xxxxx, VIII, L.P. or
Welsh, Carson, Xxxxxxxx & Xxxxx, IX, L.P. (collectively "WCAS"),
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any Controlled Entity, and any Permitted Transferee (a Permitted
Transferee, together with WCAS and their Controlled Entities, the
"WCAS Entities"), pursuant to the Amended and Restated
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Shareholders Agreement dated as of October 23, 2000, as amended,
restated or modified from time to time in accordance with the
terms thereof (the "Shareholders Agreement") but only so long as
(i) the WCAS Entities shall comply with Article 5 of the
Shareholders Agreement and (ii) the WCAS Entities', in the
aggregate, do not own more than 40% of the Company's then
outstanding securities or more than 37.5% of the voting power of
the Company's then outstanding securities. For purposes of this
Agreement, "Controlled Entity" shall mean any entity in which
WCAS owns the majority of the voting shares or securities or has
the ability (whether through the ownership of voting securities,
contract or otherwise) to elect a majority of the board of
directors or other similar governing body or of which WCAS has
the authority to control or direct the investment decisions. For
purposes of this Agreement, "Permitted Transferee" shall mean any
person that shall become a party to or agree to be bound by the
terms of the Shareholders Agreement by acquiring any of the
Company's common stock, warrants or securities convertible or
exchangeable into shares of the Company's common stock, from any
other person who is a party to or agrees to be bound by the terms
of the Shareholders Agreement.
(iii) Control Change Date. "Control Change Date" means the date
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on which a Change in Control occurs. If a Change in Control occurs on account of
a series of events, the "Control Change Date" shall be the date on which the
last of such events occurs.
(iv) Good Reason. "Good Reason" means that (i) the Executive's
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Base Salary or target Incentive Payments are reduced, (ii) the Executive's job
duties and responsibilities are diminished (but a reduction in the size of the
Company as a result of a Sale of a Material Line of Business shall not alone
constitute a diminution in the Executive's job duties and responsibilities),
(iii) the Executive is required to relocate to a facility more than 50 miles
from Waynesboro, Virginia, (iv) the Executive does not receive any previously
deferred compensation when the payment of such deferral is due, (v) the
Executive is not provided benefits (e.g., health insurance) that are comparable
in all material respects to those provided to the Executive on the Control
Change Date, (vi) the Executive is directed by the Board or an officer of the
Company or an affiliate (or the Company's successor or an affiliate thereof) to
engage in conduct that is illegal, (vii) the Executive is directed by the Board
or an officer of the Company or an affiliate (or the Company's successor or an
affiliate thereof) to refrain from acting and the failure to act is illegal,
(viii) material breach by the Company of its obligations under this Agreement,
or (ix) the failure by the Company to increase (within twelve (12) months of the
Executive's last increase) the Executive's compensation (within the salary range
of the Executive's job classification) consistent with the Executive's
performance rating. If any of the events occur that would entitle the Executive
to terminate the Executive's employment for Good Reason hereunder and the
Executive does not exercise such right to terminate the Executive's employment,
any such failure shall not operate to waive the Executive's right to terminate
the Executive's employment for that or any subsequent action or actions, whether
similar or dissimilar, that would constitute Good Reason.
(v) Material Line of Business. "Material Line of Business"
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means any line or lines of business or service or group of services which
represent(s) in the aggregate either 25% of the Company's consolidated revenues
or 25% of the Company's consolidated EBITDA (earnings before interest, taxes,
depreciation and amortization) for the twelve month period ended on the last day
of the most recently ended fiscal quarter for the Company.
5. Severance.
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(a) Entitlement. Subject to the Executive's compliance with Sections
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7 and 10, the Executive will be entitled to receive the benefits described in
this Section 5 if there is a Change in Control during the Employment Term and
either of the following applies:
(i) the Executive's employment is terminated without Cause
within 30 months [36 months with respect to the Chief Executive Officer] of the
Control Change Date (even if such termination occurs after the Employment Term);
or
(ii) the Executive resigns with Good Reason within 30 months
[36 months with respect to the Chief Executive Officer] of the Control Change
Date (even if such resignation occurs after the Employment Term).
For purposes of this Agreement, the date of a termination of the
Executive's employment as described in subsections (i) or (ii) above is the
Executive's "Control Termination Date."
(b) Severance Pay. The Executive will receive a severance benefit
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equal to three (3) years Base Salary. Notwithstanding the preceding sentence, in
lieu of the severance pay described in the preceding sentence of this Section
5(b), the Executive shall receive a severance benefit equal to the severance
benefit available to employees of the Company (or its successor and any of its
affiliates) who are similarly situated to the Executive on the Control
Termination Date if the value of such benefit is greater than the value of the
benefit described in this Section 5.
The Executive's severance benefit, less applicable withholding taxes,
shall be paid in a lump sum on a net present value basis, using a reasonable
discount rate determined by the Board. The period of time for which the
Executive is entitled to the severance benefit is referred to as Executive's
"Severance Period."
(c) Welfare Benefits. If the Executive satisfies the requirements of
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Section 5(a), the Executive and the Executive's dependents will be entitled to
continued participation in the "employee welfare benefit plans" (as defined in
Section 3(1) of the Employee Retirement Income Security Act of 1974) in which
the Executive participated on the Executive's Control Termination Date during
the Severance Period. In lieu of such continued coverage, the Executive will be
reimbursed, on a net after-tax basis, for the cost of individual insurance
coverage for the Executive and the Executive's dependents under a policy or
policies that provide benefits not less favorable than the benefits provided
under such employee welfare benefit plans. The coverage provided under this
Section 5(d) shall be secondary to any coverage provided to the Executive and
the Executive's dependents by another employer of the Executive.
(d) Standard Termination Payments. The Company shall be obligated to
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pay to the Executive the Standard Termination Payments.
(e) Incentive Payments. During the Severance Period, the Company
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shall be obligated to pay to the Executive the target Incentive Payments that
the Executive would have been entitled to receive during the Severance Period in
a lump sum on a net present value basis, using a reasonable discount rate
determined by the Board.
(f) Other Severance Benefits. In addition to the severance benefits
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set forth in this Section 5, on the Control Termination Date all of the
Executive's outstanding stock options and other stock awards that are not then
vested shall immediately vest and become exercisable in full, notwithstanding
the provisions thereof.
6. Additional Payment by the Company.
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(a) Anything in this Agreement or any other plan, award, agreement or
other provisions to the contrary notwithstanding, in the event it is determined
that any payment, award, benefit or distribution (or any acceleration of any
payment, award, benefit or distribution) by the Company (or any of its
affiliated entities) to or for the benefit of the Executive (whether pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 6 (the "Payments") would be
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subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), or any interest or penalties are incurred by
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the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Company shall pay to the Executive an additional payment
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(a "Gross-Up Payment") in an amount such that after payment by the Executive of
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all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) For purposes of determining whether any of the Payments will be
subject to the Excise Tax and the amounts of such Excise Tax:
(i) Such payments shall be treated as "parachute payments"
within the meaning of Section 280G(b)(2) of the Code, but no parachute payments
in excess of the "base amount" (as defined under 280G(b)(3) of the Code) shall
be treated as subject to the Excise Tax, unless, and except to the extent that,
in the opinion of U.S. certified independent accountants (the "Accounting Firm")
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or tax counsel selected by such Accounting Firm, there is no substantial
authority that the Payments (in whole or in part) do not constitute parachute
payments, or represent reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code in excess of the "base
amount" or are otherwise not subject to the Excise Tax. All fees and expenses of
the Accounting Firm shall be borne solely by the Company. The Gross-Up Payment
under this Section 6 with respect to any Payments shall be made no later than
thirty (30) days following the receipt of the Accounting Firm's determination.
If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive with a written opinion to such effect,
and to the effect that failure to report the Excise Tax, if any, on the
Executive's applicable federal income tax return will not result in the
imposition of a
negligence or similar penalty. The determination by the Accounting Firm shall be
binding upon the Company and the Executive.
(ii) The amount of the Gross-Up Payment shall be determined
based on the Executive's likely effective rates of federal, state and local
income taxation for the calendar year in which the Gross-Up Payment is to be
made, net of the likely reduction in federal income taxes that is obtained from
any deduction of state and local taxes. Executive agrees, for purposes of
calculating the amount of the Gross-Up Payment, to provide the Company such
information as the Company may reasonably request to determine the amount of the
Gross-Up Payment and to cooperate with the Company in good faith in order to
effectively make such determination. The Company shall hold all such information
secret and confidential and shall not, without the prior written consent of the
Executive or as otherwise may be required by law or legal process, communicate
or divulge such information to anyone other than the Company and those in need
for such information for purposes of determining the amount of the Gross-Up
Payment.
(c) As a result of the uncertainty in the application of Section 4999
of the Code at the time of the determination, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment") or Gross-Up Payments are made by the Company which should not
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have been made ("Overpayment"), consistent with the calculations required to be
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made hereunder. In the event that the Executive thereafter is required to make
payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment (together with interest at the rate provided in Section
12749b)(2)(B) of the Code) shall be promptly paid by the Company to or for the
benefit of the Executive. In the event the amount of the Gross-Up Payment
exceeds the amount necessary to reimburse the Executive for the Executive's
Excise Tax, the Accounting Firm shall determine the amount of the Overpayment
that has been made and any such Overpayment (together with interest at the rate
provided in Section 1274(b)(2) of the Code) shall be promptly paid by the
Executive (but only to the extent the Executive has received a refund if the
applicable Excise Tax has been paid to the Internal Revenue Service) to or for
the benefit of the Company. The Executive shall cooperate, provided the
Executive's expenses are reimbursed by the Company, with any reasonable requests
by the Company in connection with any contests or disputes with the Internal
Revenue Service in connection with the Excise Tax, including but not limited to
taking action to contest a claim by the Internal Revenue Service, and permitting
the Company to participate in proceedings relating to such claim. In connection
with any contests or disputes with the Internal Revenue Service in connection
with the Excise Tax, the Company shall bear and pay directly all costs and
expenses (including any additional interest and penalties) incurred by the
Executive in connection with such contests or disputes and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise Tax and other
taxes (including interest and penalties with respect thereto) imposed as a
result thereof.
7. Confidential Information. The Executive understands and acknowledges
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that during the Executive's employment with the Company, the Executive has been
and will be making use of, acquiring or adding to the Company's Confidential
Information (as defined below). In order to protect the Confidential
Information, the Executive will not, during the Executive's employment with the
Company or thereafter, in any way utilize any of the Confidential Information
except in connection with the Executive's employment by the Company. The
Executive will not at any time use any Confidential Information for the
Executive's own benefit or the benefit of any person except the Company. At the
end of the Executive's employment with the Company, the Executive will surrender
and return to the Company any and all Confidential Information in the
Executive's possession or control, as well as any other Company property that is
in the Executive's possession or control. The Executive acknowledges and agrees
that any breach of this Section 7 would be a material breach of this Agreement.
The term "Confidential Information" shall mean any information that is
confidential and proprietary to the Company, including but not limited to the
following general categories:
(i) trade secrets;
(ii) lists and other information about current and prospective
customers;
(iii) plans or strategies for sales, marketing, business
development, or system build-out;
(iv) sales and account records;
(v) prices or pricing strategy or information;
(vi) current and proposed advertising and promotional programs;
(vii) engineering and technical data;
(viii) the Company's methods, systems, techniques, procedures,
designs, formulae, inventions and know-how; personnel
information;
(ix) legal advice and strategies; and
(x) other information of a similar nature not known or made
available to the public or the Company's Competitors (as defined
in Section 10).
Confidential Information includes any such information that the Executive may
prepare or create during the Executive's employment with the Company, as well as
such information that has been or may be created or prepared by others.
8. Return of Documents. All writings, records and other documents and
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things containing any Confidential Information in the Executive's custody or
possession shall be the exclusive property of the Company, shall not be copied
and/or removed from the premises of the Company, except in pursuit of the
business of the Company, and shall be delivered to the Company, without
retaining any copies, upon the termination of the Executive's employment or at
any time as requested by the Company.
9. Reaffirm Obligations. Upon termination of the Executive's employment
--------------------
with the Company, the Executive shall, if requested by the Company, reaffirm in
writing Employee's recognition of the importance of maintaining the
confidentiality of the Company's proprietary information and trade secrets and
reaffirm all of the obligations set forth in Section 7 of this Agreement.
10. Non-Compete; Non-Solicitation. The Executive agrees that:
-----------------------------
(a) while the Executive is employed by the Company, the Executive
will not, directly or indirectly, compete with the business conducted by the
Company, and the Executive will not, directly or indirectly, provide any
services to a Competitor.
(b) For a period of 24 months after the Executive's employment with
the Company ends (the "Non-Competition Period"), the Executive will not compete
----------------------
with the Company by performing or causing to be performed the same or similar
types of duties or services that the Executive performed for the Company for a
Competitor of the Company in any capacity whatsoever, directly or indirectly,
within any city or county of the continental United States in which, at the time
the Executive's employment with the Company ends, the Company provides services
or products, offers to provide services or products, or has documented plans to
provide or offer to provide services or products within the Non-Competition
Period provided that the Executive has knowledge of those plans at the time the
Executive's employment with the Company ends. Additionally, the Executive agrees
that during the Non-Competition Period, the Executive will not, directly or
indirectly, sell, attempt to sell, provide or attempt to provide, any products
or services in competition with those products or services provided by the
Company to any person or entity who was a customer or an actively sought
prospective customer of the Company, at any time during the Executive's
employment with the Company. The restrictions set forth above shall immediately
terminate and shall be of no further force or effect in the event of a default
by the Company in the payment of any compensation or benefits to which the
Executive is entitled hereunder, which default is not cured within thirty (30)
days after written notice thereof. Under these circumstances, the amount of
salary and other compensation payable to the Executive by a Competitor and
attributable to employment during the Non-Competition Period shall not reduce or
otherwise mitigate amounts due hereunder.
(c) While the Executive is employed by the Company and during the
Non-Competition Period, the Executive will not, directly or indirectly, solicit
or encourage any employee of the Company to terminate employment with the
Company; hire, or cause to be hired, for any employment by a Competitor, any
person who within the preceding 12 month period has been employed by the
Company, or assist any other person, firm, or corporation to do any of the acts
described in this subsection (c).
(d) The Executive acknowledges and agrees that the Company has a
legitimate business interest in preventing him from engaging in activities
competitive with it as described in this Section 10 and that any breach of this
Section 10 would constitute a material breach of this Section 10 and this
Agreement.
(e) If, during the Non-Competition Period, the Executive is offered
and wants to accept employment with a business that engages in activities
similar to those of the Company, the Executive will inform the Company in
writing of the identity of the business, the Executive's proposed duties with
that business, and the proposed starting date of that employment. The Executive
also agrees that the Executive will inform that business of the terms of this
Section 10. The Company will analyze the proposed employment and make a
determination as to whether it would violate this Section 10. If the Company
determines that the proposed employment would
not pose an unacceptable threat to the Company's interests, the Company will
notify the Executive in writing that it does not object to the employment.
(f) The Executive acknowledges and agrees that this Section 10
is intended to limit the Executive's right to compete only to the extent
necessary to protect the Company's legitimate business interest. The Executive
acknowledges and agrees that the Executive will be reasonably able to earn a
livelihood without violating the terms of this Section 10. If any of the
provisions of this Section 10 should ever be deemed to exceed the time,
geographic area, or activity limitations permitted by applicable law, the
Executive agrees that such provisions may be reformed to the maximum time,
geographic area and activity limitations permitted by applicable law, and the
Executive authorizes a court or other trier of fact having jurisdiction to so
reform such provisions.
(g) For purposes of this Section 10, the following definitions will
apply:
(i) "Directly or indirectly" as used in this Agreement includes an
interest in or participation in a business as an individual, partner,
shareholder, owner, director, officer, principal, agent, employee,
consultant, trustee, lender of money, or in any other capacity or
relation whatsoever. The term includes actions taken on behalf of the
Executive or on behalf of any other person. "Directly or indirectly"
does not include the ownership of less than 5% of the outstanding
shares of any corporation, if such shares are publicly traded in the
over-the-counter market or listed on a national securities exchange.
(ii) "Competitor" as used in this Agreement means any person, firm,
association, partnership, corporation or other entity that competes or
attempts to compete with the Company by providing or offering to
provide the same or similar services or products as the Company within
any geographic area in which the Company provides or offers those
services or products. "Competitor" does not include a parent,
subsidiary or affiliated organization of any entity that competes or
attempts to compete with the Company as defined in the preceding
sentence where that parent, subsidiary or affiliated organization does
not itself compete or attempt to compete with the Company by providing
or offering to provide the same or similar services or products as the
Company within any geographic areas in which the Company provides or
offers those services or products.
11. Representations. The Executive represents and warrants to the Company
---------------
that the execution, delivery and performance of this Agreement by the Executive
does not conflict with, or result in the breach by the Executive or violation by
the Executive of, any other agreement to which the Executive is a party or by
which the Executive is bound. The Executive hereby agrees to indemnify the
Company, its officers, directors and shareholders and hold them harmless from
and against any liability (including, without limitation, reasonable attorneys'
fees and expenses) which they may at any time suffer or incur arising out of or
relating to any breach of an agreement, representation or warranty made by the
Executive herein. The Company represents and warrants that this Agreement and
the transactions contemplated hereby have been duly authorized by the Company by
all necessary corporate and shareholder action, and that the execution, delivery
and performance of this Agreement by the Company does not conflict with, or
result in the breach or violation by the Company of, its Articles of
Incorporation or Amended and Restated Bylaws or any other agreement to which the
Company is a party or by which it is
bound. The Company hereby agrees to indemnify the Executive and hold the
Executive harmless from and against any liability (including, without
limitation, reasonable attorneys' fees and expenses) which the Executive may at
any time suffer or incur arising out of or relating to any breach of an
agreement, representation or warranty made by the Company herein.
12. Remedies. The parties hereto agree that the Company would suffer
--------
irreparable harm from a breach by the Executive of any of the covenants or
agreements contained herein. Therefore, in the event of the actual or threatened
breach by the Executive of any of the provisions of this Agreement, the Company
may, in addition and supplementary to other rights and remedies existing in its
favor, apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any violation of the provisions hereof. The Executive agrees that these
restrictions are reasonable.
13. Successors and Assigns. This Agreement shall be binding upon and inure
----------------------
to the benefit of the Company and its affiliates and their successors and
assigns, and shall be binding upon and inure to the benefit of the Executive and
the Executive's legal representatives and assigns, provided that in no event
shall the Executive's obligations to perform services for the Company and its
affiliates be delegated or transferred by the Executive. The Company may assign
or transfer its rights hereunder to a successor corporation in the event of a
merger, consolidation or transfer or sale of all or substantially all of the
assets of the Company or of the Company's business (provided, however, that no
such assignment or transfer shall have the effect of relieving the Company of
any liability to the Executive hereunder or under any other agreement or
document contemplated herein), but only if such assignment or transfer does not
result in employment terms, conditions, duties or responsibilities which are or
may be materially different than the terms, conditions, duties or
responsibilities of the Executive hereunder.
14. Modification or Waiver. No amendment, modification, waiver, termination
----------------------
or cancellation of this Agreement shall be binding or effective for any purpose
unless it is made in a writing signed by the party against whom enforcement of
such amendment, modification, waiver, termination or cancellation is sought. No
course of dealing between or among the parties to this Agreement shall be deemed
to affect or to modify, amend or discharge any provision or term of this
Agreement. No delay on the part of the Company or the Executive in the exercise
of any of their respective rights or remedies shall operate as a waiver thereof,
and no single or partial exercise by the Company or the Executive of any such
right or remedy shall preclude other or further exercises thereof. A waiver of a
right or remedy on any one occasion shall not be construed as a bar to or waiver
of any such right or remedy on any other occasion.
15. Governing Law; Jurisdiction. This Agreement and all rights, remedies
---------------------------
and obligations hereunder, including, but not limited to, matters of
construction, validity and performance shall be governed by the laws of the
Commonwealth of Virginia without regard to its conflict of laws principles or
rules. To the full extent lawful, each of the Company and the Executive hereby
consents irrevocably to personal jurisdiction, service and venue in connection
with any claim or controversy arising out of this Agreement in the courts of the
Commonwealth of Virginia located in Waynesboro, Virginia, and in the federal
courts in the Western District of Virginia.
16. Severability. Whenever possible each provision and term of this
------------
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any
provision or term of this Agreement shall be held to be prohibited by or invalid
under such applicable law, then such provision or term shall be ineffective only
to the extent of such prohibition or invalidity, without invalidating or
affecting in any manner whatsoever the remainder of such provisions or term or
the remaining provisions or terms of this Agreement.
17. Counterparts. This Agreement may be executed in separate counterparts,
------------
each of which is deemed to be an original and all of which taken together
constitute one and the same Agreement.
18. Headings. The headings of the Sections of this Agreement are inserted
--------
for convenience only and shall not be deemed to constitute a part hereof and
shall not affect the construction or interpretation of this Agreement.
19. Entire Agreement. This Agreement (together with all documents and
----------------
instruments referred to herein) constitutes the entire agreement, and supersedes
all other prior agreements and undertakings, both written and oral, among the
parties with respect to the subject matter hereof, including any management
continuity agreement under which the Executive hereby agrees to waive all rights
and which is hereby terminated.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
NTELOS Inc.
By:______________________________________
Executive
_________________________________________
Printed Name
