EXHIBIT 10.13 (a)
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EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into this 14th day of May, 1996, ("Effective Date"),
by and between Rural Cellular Corporation ("RCC") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the
"Employee").
WHEREAS, Employee is experienced in the areas described in the job
description attached as Exhibit A and RCC desires to employ Employee for the
position set forth in Exhibit A; and
WHEREAS, Employee desires to be employed by RCC; and
WHEREAS, the parties desire by this writing to set forth the employment
relationship of RCC and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. EMPLOYMENT. The Employee is employed in the capacity of Vice
President Finance and Chief Financial Officer for RCC as described in the
attached Exhibit A and as customarily performed by persons situated in a similar
executive capacity. The Employee shall also promote, by entertainment or
otherwise, as and to the extent permitted by law, the business of RCC. The
Employee's other duties shall be such as the President/CEO, or his designee, may
from time to time reasonably direct. The Board of Directors may change
Employee's reporting relationship at any time.
2. BASE COMPENSATION. RCC agrees to pay the Employee during the term of
this Agreement a salary which shall be at the rate of $92,500 per annum
beginning on the Effective Date, payable not less frequently than every two
weeks; provided, that the rate of such salary shall be reviewed by the Board of
Directors not less often than annually, and Employee shall be entitled to
receive an increase at such percentage or in such an amount, if any, as the
Board of Directors in its sole discretion may decide at such time.
3. DISCRETIONARY AND INCENTIVE BONUS. The Employee shall be entitled to
participate in an equitable manner with all senior management employees of RCC
in discretionary and incentive bonuses, including, but not limited to stock
option and restricted stock awards and other cash and non-cash compensation
plans that may be authorized and declared by the Board of Directors to its
senior management employees from time to time.
4. OTHER BENEFITS.
(a) PARTICIPATION IN RETIREMENT AND MEDICAL PLANS. The Employee
shall be entitled to participate in any plan of RCC relating to
compensation, profit sharing, or other retirement benefits and medical
coverage or reimbursement plans as RCC may adopt for the benefit of its
employees.
(b) EMPLOYEE BENEFITS: EXPENSES. The Employee shall be eligible to
participate in any fringe benefits which may be or may become applicable to
RCC's senior management employees, including by example, participation in
any stock option or incentive plans adopted by the Board of Directors, and
any other benefits adopted by the Board of Directors. RCC shall reimburse
Employee for all reasonable out-of-pocket expenses which Employee shall
incur in connection with his service for RCC which are documented with
RCC's policies as set forth from time to time.
5. TERMS. The term of employment of Employee under this Agreement shall
be for the period commencing on the Effective Date and ending one year after
that date. Additionally, the term of employment under this Agreement may be
extended for one or more additional one year periods beyond the then effective
expiration date upon a determination and resolution of the Board of Directors
that the performance of the Employee has met
the requirements and standards of the Board in the current term, and that the
term of such Agreement shall be extended for an additional one year term and the
acceptance by Employee of such extended term.
6. LOYALTY: NONCOMPETITION.
(a) The Employee shall devote his full time and attention to the
performance of his employment under this Agreement. During the term of
Employee's employment under this Agreement, the Employee shall not engage
in any business or activity contrary to the business affairs or interests
of RCC.
(b) Nothing contained in this Paragraph 6 shall be deemed to prevent
or limit the right of Employee to invest in the capital stock or other
securities of any business dissimilar from that of RCC, or, solely as a
passive or minority investor, in any business.
7. STANDARDS. The Employee shall perform his duties under this Agreement
in accordance with such reasonable standards expected of employees with
comparable positions in comparable organizations and as may be established from
time to time by the President/CEO.
8. VACATION AND SICK LEAVE. At such reasonable times as RCC shall in its
sole discretion permit, the Employee shall be entitled, without loss of pay, to
absent himself voluntarily from the performance under this Agreement, with all
such voluntary absences to count as vacation time; provided that:
(a) The Employee shall be entitled to annual vacation leave in
accordance with the policies as are periodically established by the Board
of Directors for senior management of RCC but in no event less than three
calendar weeks per calendar year.
(b) The Employee shall take at least five consecutive business days
of vacation in each calendar year.
(c) The Employee shall not be entitled to receive any additional
compensation from RCC on account of his failure to take vacation leave and
Employee shall not be entitled to accumulate unused vacation from one
fiscal year to the next, except in either case to the extent authorized by
the Board of Directors for senior management employees of RCC.
(d) In addition to the aforesaid paid vacations, the Employee shall
be entitled without loss of pay, to absent himself voluntarily from the
performance of his employment with RCC for such additional periods of time
and for such valid and legitimate reasons as the Board of Directors in its
discretion may determine. Further, the Board of Directors shall be
entitled to grant to the Employee a leave or leaves of absence with or
without pay at such time or times and upon such terms and conditions as the
Board of Directors in its discretion may determine.
(e) In addition, the Employee shall be entitled to an annual sick
leave benefit as established by the Board of Directors for senior
management employees of RCC. In the event that any sick leave benefit
shall not have been used during any year, such leave shall accrue to
subsequent years only to the extent authorized by the Board of Directors
for employees of RCC.
(f) The Employee is encouraged to participate in related industry
organizations and activities provided that the assumption of any
significant responsibilities for such outside activities or organizational
participation shall be approved in advance by the President/CEO.
9. TERMINATION AND TERMINATION PAY. The Employee's employment under this
Agreement shall be terminated upon any of the following occurrences:
(a) The death of the Employee during the term of this Agreement, in
which event the Employee's estate shall be entitled to receive the
compensation due the Employee through the last day of the calendar month in
which Employee's death shall have occurred, plus all accrued but unused
vacation for such calendar year, and PRO RATA payment of all bonuses or
incentive payments earned or to be awarded for such calendar year.
(b) The Board of Directors may terminate the Employee's employment at
any time, but any termination by the Board of Directors other than
termination for Just Cause, as defined below, shall not prejudice the
Employee's right to compensation or other benefits under the Agreement.
The Employee shall have no right to receive compensation or other benefits
for any period after termination for Just Cause. Termination for "Just
Cause" shall include termination because of the Employee's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or
material breach of any provision of the Agreement.
(c) Except as provided pursuant to Section 11 herein, in the event
Employee's employment under this Agreement is terminated by the Board of
Directors without Just Cause, RCC shall be obligated to continue to pay the
Employee the salary provided pursuant to Section 2 herein, up to the date
of termination of the term (including any extension of the term pursuant to
Section 5 above) of this Agreement. Notwithstanding the foregoing, in no
event shall payments to be made in accordance with this Section 9(c) be for
a period of less than 12 months following the date of termination of
employment.
(d) The voluntary termination by the Employee during the term of this
Agreement with the delivery of no less than 60 days written notice to the
Board of Directors (other than pursuant to Section 11(b)) in which case the
Employee shall be entitled to receive only the compensation, vested rights,
and all employee benefits up to the date of such termination except as
specifically provided below.
10. DISABILITY. If the Employee shall become disabled or incapacitated to
the extent that he is unable to perform his duties hereunder, by reason of
medically determinable physical or mental impairment, as determined by a doctor
engaged by the Board of Directors, Employee shall nevertheless continue to
receive the compensation and benefits provided under the terms of this Agreement
as follows: 100% of such compensation and benefits for a period of six (6)
months, but not exceeding the remaining term of the Agreement, and 65%
thereafter for the remainder of the term of the Agreement. Such benefits noted
herein shall be reduced by any benefits otherwise provided to the Employee
during such period under the provisions of disability insurance coverage in
effect for RCC employees. Thereafter, Employee shall be eligible to receive
benefits provided by RCC under the provisions of disability insurance coverage
in effect for RCC employees. Upon returning to active full-time employment, the
Employee's full compensation as set forth in this Agreement shall be reinstated
as of the date of commencement of such activities. In the event that the
Employee returns to active employment on other than a full-time basis, then his
compensation (as set forth in Paragraph 2 of this Agreement) shall be reduced
in proportion to the time spent in said employment, or as shall otherwise be
agreed to by the parties.
11. CHANGE IN CONTROL.
(a) Notwithstanding any provisions herein to the contrary, in the
event of the involuntary termination of Employee's employment under this
Agreement, absent Just Cause, in connection with, or within twelve (12)
months after, any change in control of RCC, Employee shall be paid an
amount equal to the product of 2.00 times the Employee's "base amount" as
defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as
amended (the "Code") and regulations promulgated thereunder. Said sum
shall be paid, at the option of Employee, either in one (1) lump sum within
thirty (30) days of such termination discounted to the present value of
such payment using as the discount rate the "prime rate" as published in
the WALL STREET JOURNAL EASTERN EDITION as of the date of such payment, or
in periodic payments over the next 36 months or the remaining term of this
Agreement whichever is less, as if Employee's employment had not been
terminated, and such payments shall be in lieu of any other future payments
which the Employee would be otherwise entitled to receive under Section 9
of this Agreement. Notwithstanding the foregoing, all sums payable
hereunder shall be reduced in such manner and to such extent so that no
such payments made hereunder when aggregated with all other payments to be
made to the Employee by RCC shall be deemed an "excess parachute payment"
in accordance with Section 280G of the Code, or any successor provision,
and be subject to the excise tax provided at Section 4999(a) of the Code.
The term "change in control" shall be defined as set forth in the 1995
Stock Compensation Plan, which is incorporated herein by reference.
(b) Notwithstanding any other provisions of this Agreement to the
contrary, Employee may voluntarily terminate his employment under this
Agreement within twelve (12) months following a change in control of RCC,
and Employee shall thereupon be entitled to receive the payment described
in Section 11(a) of this Agreement, upon the occurrence, or within ninety
(90) days thereafter, of any of the following events, which have not been
consented to in advance by the Employee in writing; (i) if Employee would
be required to move his personal residence or perform his principal
executive functions more than fifty miles from the Employee's primary
office immediately prior to the change in control; (ii) if in the
organizational structure of RCC Employee would be required to report to a
person or persons other than the Chief Executive Officer; (iii) if RCC
should fail to maintain Employee's base compensation in effect as of the
date of the Change in Control and the existing material fringe benefit,
stock option, performance incentive and retirement plans; (iv) if Employee
would be assigned duties and responsibilities other than those normally
associated with his position as referenced at Section 1, herein; or (v) if
Employee's responsibilities or authority have in any way been materially
diminished or reduced.
12. NON-COMPETITION AGREEMENT.
(a) TERM. During the term of the Agreement and for the period ending
six (6) months after the voluntary or involuntary termination of this
Agreement, Employee agrees that he will not, without RCC's prior written
consent, directly or indirectly, within the service areas served by RCC at
the time of termination, lend his credit, advice or assistance, or engage
in any activity or act in any manner, including but not limited to, as an
individual, owner, sole proprietor, founder, associate, promoter, partner,
joint venturer, shareholder other than as a less than five percent (5%)
shareholder of a publicly traded corporation, officer, director, trustee,
manager, employer, employee, licensor, licensee, principal, agent,
salesman, broker, representative, consultant, advisor, investor or
otherwise, for the purpose of establishing, operating or managing any
business or entity that is engaged in activities competitive with the
business of the Company as carried on as of the date of termination.
(b) NON-SOLICITATION AGREEMENT. As used in this Agreement, the term
"Person" means any individual, corporation, joint venture, general or
limited partnership, association or other entity. During the period of six
(6) months from and after the date of termination, Employee agrees that he
will not, whether for his own account or for the account of any other
Person, directly or indirectly interfere with the Company's relationship
with or endeavor to divert or entice away from the Company any Person who
or which at any time during the term of Employee's employment by RCC is or
was an employee or customer of or in the habit of dealing with RCC.
(c) REASONABLENESS OF COVENANTS. Employee acknowledges and agrees
that the geographic scope and period of duration of the restrictive
covenants contained in this Agreement are both fair and reasonable and that
the interests sought to be protected by the Company are legitimate business
interests entitled to be protected.
(d) INJUNCTIVE RELIEF: ATTORNEYS' FEES. The parties agree that the
remedy of damages at law for the breach by Employee of any of the covenants
contained in this Section 12 is an inadequate remedy. In recognition of
the irreparable harm that a violation by Employee of any of the covenants,
agreements or obligations arising under this Agreement would cause RCC,
Employee agrees that in addition to any other remedies or relief afforded
by law, an injunction against an actual or threatened violation or
violations may be issued against him and every other Person concerned
thereby, it being the understanding of the parties that both damages and an
injunction shall be proper modes of relief and are not to be considered
alternative remedies. In the event of any such an actual or threatened
violation, Employee agrees to pay the costs, expenses and reasonable
attorneys' fees incurred by the Company in pursuing any of its rights with
respect to such actual or threatened violation, in addition to the actual
damages sustained by the Company as a result thereof.
(e) COMPENSATION. In the event that Employee's employment has
terminated and Employee is not entitled to receive payment under Sections
10 or 11 of this Agreement, to compensate Employee for the restrictive
covenants contained in this Agreement, RCC agrees to pay Employee the sum
of Twenty-five Thousand and 00/100 Dollars ($25,000). One-half of this
amount is payable in equal monthly payments commencing on the last day of
the month following termination and continuing thereafter on the
last day of each and every month until the end of the period stated in
Section 12(a) and one-half at the end of the period stated in Section
12(a).
In the event that Employee shall breach any of his covenants,
agreements or obligations arising under this Agreement, RCC shall have the
right to discontinue making the payments to Employee provided for herein
unless and until Employee has cured any such existing breaches.
(f) RCC may waive the restrictions on Employee imposed in Section 12.
In the event of such waiver, RCC shall not be obligated to make the
payments set forth in Section 12(e) provided that, in the event of a
voluntary termination by Employee, RCC shall give notice of such waiver to
Employee within twenty (20) days of the receipt of the notice of
termination by Employee.
13. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall inure to the benefit of and be binding upon
any corporation or other successor of RCC which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of RCC.
(b) Since RCC is contracting for the unique and personal skills of
the Employee, the Employee shall be precluded from assigning or delegating
his rights or duties hereunder without first obtaining the written consent
of RCC.
14. AMENDMENTS. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by both
parties, except as herein otherwise specifically provided.
15. APPLICABLE LAW. This Agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of Minnesota, except to the extent that Federal law shall be
deemed to apply.
16. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
17. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of RCC, and judgment
upon the award rendered may be entered in any court having jurisdiction thereof,
except to the extent that the parties may otherwise reach a mutual settlement of
such issue. RCC shall incur the cost of all fees and expenses associated with
filing a request for arbitration with the AAA, whether such filing is made on
behalf of RCC or the Employee, and the costs and administrative fees associated
with employing the arbitrator and related administrative expenses assessed by
the AAA. If the parties cannot mutually agree on an arbitrator, each party
shall select an arbitrator and those two arbitrators shall select a third
arbitrator and the third arbitrator shall conduct the arbitration. Otherwise,
each party shall pay its own costs and expenses, including reasonable attorneys'
fees, arising from such dispute, proceedings or actions, notwithstanding the
ultimate outcome thereof, upon delivery of a final judgment or settlement of the
dispute.
18. ENTIRE AGREEMENT. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto, and shall supersede all prior
understandings in writing or otherwise between the parties.
RURAL CELLULAR CORPORATION
ATTEST: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------- President/Chief Executive Officer
Secretary
WITNESS:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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