EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 23rd day of
September, 1998 by and between the undersigned employee (hereinafter referred
to as "Employee") residing at the address indicated following Employee's
signature below and CS WIRELESS SYSTEMS, INC., a Delaware corporation having
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Company").
1. EMPLOYMENT. The Company hereby employs Employee and Employee agrees to
work for the Company in the capacity set forth on SCHEDULE A hereto
during the Term (as defined below) of and upon the terms and conditions
set forth in this Agreement.
2. COMPENSATION/BENEFITS.
(a) BASE SALARY. During the Term of this Agreement (as defined below)
the Company agrees to pay Employee the base annual salary set forth
on SCHEDULE A ("Base Salary"). Such Base Salary shall be reviewed no
less frequently than annually during the Term and may be increased
but not decreased by the Board of Directors. Such Base Salary shall
be payable in accordance with the Company's normal business
practices or in such other amounts and at such other times as the
parties may mutually agree.
(b) INCENTIVE COMPENSATION. During the Term of this Agreement, Employee
shall be entitled to such incentive program, pursuant to the terms
of a separate plan of the Company, as may be in effect from time to
time. Such incentive program shall be based on the following three
(3) components: (i) the achievement of Company performance targets;
(ii) the achievement of Employee performance targets; and (iii)
discretionary bonuses. These performance targets will be revised
annually by the Board of Directors.
(c) STOCK OPTIONS. Employee shall be, subject to approval of the
Company's Compensation Committee, granted stock options (the "Stock
Options") to purchase shares of Company common stock, $.001 par
value per share, as set forth on SCHEDULE A, pursuant to the
Company's 1996 Incentive Stock Plan, as amended, and subject to the
terms and conditions thereof and the stock option agreement in the
form attached as EXHIBIT A hereto.
(d) BENEFITS/VACATION. During the Term, the Company shall provide
Employee with such other benefits, including executive incentive and
bonus plans and medical and disability plans, as are made generally
available to executive employees of the Company from time to time.
Employee shall be entitled to that amount of paid vacation during
each year of the Term as set forth on SCHEDULE A. In addition,
Employee shall be entitled to those benefits set forth on SCHEDULE A.
3. SERVICES. Employee agrees to devote substantially all his working time,
attention and
-2-
energies to the business of the Company and its Affiliates (as defined
below) under the general direction of the Management Group of the Company
and Chief Executive Officer and hereby agrees to abide by and implement
Company Policies, Strategy Principles and Governance Parameters as may be
adopted from time to time by the Management Group of the Company in its
sole discretion. Employee shall not directly or indirectly, during the
Term of this Agreement, render services, for compensation or otherwise,
to or for any other person or firm in direct competition with the
business of the Company in any market served by the Company or its
Affiliates without the written consent of the Board of Directors. In
performing his duties hereunder, Employee shall be available for
reasonable travel as the needs of the Company's business require.
Employee shall work in the Company's Plano, Texas office, unless
otherwise indicated on SCHEDULE A.
4. TERM. The term of this Agreement (the "Term" or the "Term of this
Agreement") shall be for the period set forth on SCHEDULE A.
5. EARLY TERMINATION.
(a) GENERAL. The Employee's employment hereunder is at will and shall be
terminated and the Company's obligations hereunder shall cease,
including the obligation to pay compensation for any period after
the date of termination, (i) immediately upon notice, in the sole
discretion of the Company, (ii) without the necessity of notice,
upon the death of the Employee, or (iii) upon written notice of a
finding by at least 60% of the members of the Board of Directors
that the Employee has (a) acted with gross negligence or willful
misconduct in connection with the performance of his duties
hereunder, (b) engaged in a material act of insubordination or of
common law fraud against the Company or its employees, or (c) acted
against the best interests of the Company in a manner that has or
could have an adverse affect on the financial condition of the
Company (death of an Employee or any such findings is referred to
herein as "Cause"). Upon the Company's termination of Employee for
any reason other than Cause, the Company shall pay Employee: (i)
severance in an amount (the "Severance Amount") equal to the greater
of (x) his then Base Salary under PARAGRAPH 2, payable in twelve
equal monthly installments and (y) the Base Salary that would have
been payable for the balance of the Term, payable in equal monthly
installments; and (ii) any accrued and unpaid bonuses due Employee
in accordance with the Company's incentive program then in effect.
(b) DISABILITY If Employee shall become unable efficiently to perform
the essential functions of his job, even with reasonable
accommodation, as a result of a disability or illness, as such terms
are defined by the Americans with Disabilities Act, he shall be
entitled to his regular compensation until the total period of
disability or illness (whether or not continuous and whether or not
the same disability or illness) shall exceed sixty (60) days during
any calendar year in the
-3-
Term. This Agreement may thereafter be terminated by the Company and
the Company's obligations hereunder shall cease, including the
obligation to pay compensation for any period after the date of
termination. Any amounts payable as compensation during the period
of disability or illness shall be reduced by any amounts paid during
such period under any disability plan or similar insurance of the
Company.
(c) EMPLOYEE'S RIGHT TO TERMINATE. Employee may, at any time during the
Term, resign and shall be entitled to all accrued rights with
respect to compensation and benefits in accordance with the
Company's Policies then in effect.
(d) ARBITRATION IN THE EVENT OF A DISPUTE REGARDING THE NATURE OF
TERMINATION. In the event that the Company terminates Employees'
employment for Cause (as defined above), and Employee contends that
Cause did not exist, the Company's only obligation shall be to
submit such claim to arbitration before the American Arbitration
Association ("AAA"). In such a proceeding, the only issue before the
arbitrator will be whether Employee was in fact terminated for
Cause. If the arbitrator determines that Employee was not terminated
for Cause, the only remedy that the arbitrator may award is an
amount equal to the severance payment specified in PARAGRAPH 5(a),
the costs of arbitration, and Employee's attorneys' fees. If the
arbitrator finds that the Employee was terminated for Cause, the
arbitrator will be without authority to award Employee anything, and
the parties will each be responsible for their own attorneys' fees,
and they will divide the costs of arbitration equally.
6. EMPLOYER'S AUTHORITY. Employee agrees to observe and comply with the
rules and regulations of the Company as adopted by the Management Group
of the Company or by the Board of Directors respecting the performance of
his duties and to carry out and perform orders, directions and policies
communicated to him from time to time.
7. EXPENSES. During the Term, the Company shall reimburse Employee for all
reasonable business expenses which are approved in advance and incurred
by Employee in the course of performing his duties for the Company
hereunder in accordance with the procedures then in place for such
reimbursement.
8. NON-DISCLOSURE AGREEMENT/NON-COMPETITION.
(a) Employee will execute the Nondisclosure Agreement of the Company
attached as EXHIBIT B hereto and made a part hereof. Said agreement
shall survive termination of Employee's employment hereunder.
(b) Because Employee's services to the Company are special and because
Employee has access to the company's confidential information,
Employee covenants and
-4-
agrees that if (i)(x) Employee's employment is terminated, or not
renewed, by the Company for Cause or (y) Employee voluntarily
terminates his employment relationship hereunder with the Company or
Employee elects not to renew his employment with the Company
following the expiration of this Agreement, for a period of twelve
(12) months following the termination of this Agreement, or (ii)
Employee's employment is terminated and Employee is receiving the
Severance Amount, for the period during which Employee is receiving
such Severance Amount under PARAGRAPH 5 hereof, whichever is
applicable, he will not, directly or indirectly, either on his own
behalf or on behalf of any person, partnership, corporation or
otherwise, (A) engage in any business or undertaking directly
competitive with the wireless cable television, cable television,
subscription television, direct broadcast satellite, direct-to-home,
wired video programming, non-wired video programming, wireless
Internet access, wireless fixed telephony or other fixed wireless
information businesses (the "Related Business") being carried on by
the Company or any Affiliate in any market serviced by the Company
or any Affiliate, at the time of Employee's termination, (B) be
employed by or provide consulting services to or be an investor,
limited partner or shareholder in, any entity or other person in any
Related Business within 25 miles of any city in which the Company or
any Affiliate does business at time of execution of this Agreement
or has rights to broadcast or transmit television programming or in
which the Company has a transmission license at the time of
Employee's termination, without the prior written consent of the
Board of Directors. The parties agree that the time period and
geographical area of non-competition specified above are reasonable
and necessary in light of the transactions entered into in this
Agreement. If, however, it shall be determined at any time by a
court of competent jurisdiction that either the time period
restriction or the geographical area restriction, or both, are
invalid or unenforceable, the parties agree that any such invalid
restriction shall be amended and reformed to the extent necessary to
make same valid and enforceable in the determination of said court,
and such restriction, as so amended, shall be enforceable between
the parties to the same extent as if such amendment had been made as
of the date of this Agreement. This SUBPARAGRAPH 8(b) shall survive
the termination of this Agreement and shall not apply to investments
constituting not more than 5% of the common equity of a publicly
traded company.
9. INDEMNIFICATION. As a material inducement for Employee to enter into this
Agreement, the Company hereby covenants and agrees to indemnify Employee
to the fullest extent permitted under applicable law with respect to any
and all damages, expenses (including reasonable attorney's fees), and
other liability suffered as a result of any and all claims, causes of
action, proceedings or other actions which may be asserted against
Employee in connection with Employee's service as an employee of the
Company or any of its Affiliates.
-5-
10. NOTICES. Any notice permitted or required hereunder shall be deemed
sufficient when hand-delivered or mailed by certified mail, postage
prepaid, and addressed if to the Company at the address indicated above
and if to Employee at the address indicated below (or such other address
as may be provided by notice).
11. MISCELLANEOUS. This Agreement, together with all schedules, exhibits and
collateral documents referenced herein, (i) constitutes the entire
agreement between the parties concerning the subjects hereof and
supersedes any and all prior agreements or understandings, (ii) may not
be assigned by Employee without the prior written consent of the Company
and (iii) may be assigned by the Company and shall be binding upon, and
inure to the benefit of, the Company's successors and assigns. Headings
herein are for convenience of reference only and shall not define, limit
or interpret the contents hereof.
12. AMENDMENT. This Agreement may be amended, modified or supplemented by the
mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
13. SPECIFIC PERFORMANCE. The parties acknowledge that the Company would be
irreparably damaged and there would be no adequate remedy at law for
Employee's breach of PARAGRAPH 8 of this Agreement, and accordingly, the
terms thereof shall be specifically enforced. Employee hereby consents to
the entry of any temporary restraining order or preliminary or ex parte
injunction, in addition to any other remedies available at law or in
equity, to enforce the provisions hereof.
14. AFFILIATES. As used herein, the term "Affiliate" shall mean any
individual or entity controlling, controlled by or under common control
with the Company, now or in the future, including without limitation,
partnerships in which the Company or any Affiliate may invest as a
limited or general partner and limited liability companies in which the
Company or any Affiliate may become a member.
15. SEVERABILITY. The provisions of this Agreement are severable. The
invalidity of any provision shall not affect the validity of any other
provision.
16. GOVERNING LAW. This Agreement shall be constructed and regulated in all
respects under the laws of the State of Texas. Venue for any action under
this Agreement shall lie with a court of competent jurisdiction in the
State of Texas.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
-6-
IN WITNESS WHEREOF, this Agreement is entered into as of the date and year
first above written.
CS WIRELESS SYSTEMS, INC.
By
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: President
EMPLOYEE:
By
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇