EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Employment Agreement, dated as of June 28, 2004 is entered into
between Clearwire Corporation, a Delaware corporation, (the "Company"), and
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WHEREAS, the Company desires to employ Executive and to enter into an
agreement embodying the terms of such employment (the "Agreement"), and
Executive desires to accept such employment and enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Company and Executive, intending to be legally bound, hereby agree as
follows:
1. Employment.
(a) Agreement to Employ. Commencing on or before July 12, 2004 and
upon the terms and subject to the conditions hereof the Company shall employ
Executive as Vice President and Chief Operating Officer of the Company until the
Expiration Date (as defined in Section l(b)), any date to which this Agreement
shall have been extended pursuant to section l(b) or any earlier termination of
this Agreement pursuant to the provisions hereof. Executive's office shall be
located in the Seattle/Kirkland, Washington metropolitan area. During the term
of his employment hereunder, Executive will devote substantially all of his
business time to the performance of his duties hereunder.
(b) Employment Period. Unless earlier terminated pursuant to the
provisions hereof, the initial term of Executive's employment with the Company
shall be for a period of one year commencing on the date of this Agreement and
continuing until the first anniversary hereof (the "Expiration Date"). The term
of this Agreement shall automatically extend for successive one-year terms
commencing on the Expiration Date unless Executive or the Company's Chief
Executive Officer or board of directors provides written notice to the other
party at least thirty (30) calendar days prior to the end of the then current
term indicating that the party giving notice does not wish to extend the
Agreement. In such event, the Agreement shall terminate at the end of the then
current term.
2. Responsibility. Executive shall be responsible for the establishment,
maintenance and operation of the Company's broadband wireless network, and all
strategic marketing, customer care, and fulfillment functions at the Company and
for such other duties commensurate with his position that may be assigned from
time to time by the Company's board of directors or the Company's chief
executive officer (to the extent not inconsistent with the duties assigned to
him by the board of directors). Executive shall report directly to the chief
executive officer and shall be subject to his supervision and the overall
supervision of the board of directors.
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3. Compensation and Benefits.
(a) Salary, Bonus and Benefits.
(i) The Company shall pay Executive a base salary in the
annual amount of $350,000 payable bi-weekly or in such other manner as is
consistent with the Company's normal payroll practices.
(ii) The Company shall (subject to the review and approval by
the compensation committee of the board of directors) establish a performance
based program pursuant to which Executive shall receive, if performance targets
are met, an additional annual cash payment of up to fifty percent (50%) of
Executive's then current base salary paid during the preceding twelve months (or
such higher amount as the compensation committee may approve, provided that the
compensation committee will, upon the request of the Executive, review the
foregoing target bonus on or about the first anniversary of the effective date
of this agreement and determine whether, based on the performance of the Company
and Executive, and the bonus structure applicable to other senior executives of
the Company, the target bonus should be increased).
(iii) As a further inducement to Executive to enter into this
Agreement, subject to approval of the compensation committee of the board of
directors, the Company shall grant to Executive (A) 1,000,000 restricted shares
(the "Restricted Shares") of the Company's Class A common stock, subject to
annual vesting at a rate of 50% of such grant upon each anniversary of the date
of this Agreement provided that Executive remains employed with the Company as
of such anniversary, and (B) an option to purchase 1,000,000 shares of the
Company's Class A common stock at a price of $2.00 per share pursuant to the
Company's 2003 Employee Stock Option Plan, subject to annual vesting at a rate
of 25% of such grant upon each anniversary of the date of this Agreement
provided that Executive remains employed with the Company as of such
anniversary. Executive shall also be paid on April 10, 2005 an amount equal to
Executive's tax liability associated with the grant identified in (A) above
resulting from making a Section 83(b) election, as such amount is reasonably
determined by the Company or as finally determined by the Internal Revenue
Service. Such payment shall be grossed-up to fully take into account the tax
effect of the payment (including the gross-up) to the Executive. In the event
that Executive's employment is terminated without "Cause" or for "Good Reason,"
or by reason of his death or disability, all unvested Restricted Shares shall
vest immediately. In the event that Executive's employment is terminated for
"Good Reason," or by reason of his death or disability, any unvested options
that would otherwise have vested in the ensuing twelve (12) months shall vest
immediately. In the event that Executive terminates his employment with the
Company without "Good Reason," prior to the second anniversary hereof, all
Restricted Shares, whether vested or unvested, shall be cancelled.
(iv) The Company shall offer to Executive a benefits package
equivalent to that provided to the Company's other employees and senior-level
executives (including, without limitation, participation in the Company's
medical, dental, vision, life and disability insurance
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programs, the Company's 401(k) plan, the Company's stock purchase program (if
and when such program is implemented), and such other plans or programs as may
be made available)
(v) For so long as this Agreement is renewed, the compensation
committee of the board of directors shall each year on or before the anniversary
date of this Agreement review the Executive's base salary and bonus payment in
light of the performance of Executive and the Company, and may increase (but not
decrease) such base salary and bonus payment by an amount it determines to be
appropriate.
(b) Expenses. Executive shall maintain his own automobile and shall
carry liability insurance in the minimum amount of $300,000. The Company shall
reimburse Executive monthly for business use of his automobile at the prevailing
IRS rate per mile. Executive shall also be reimbursed monthly for all other
reasonable out-of-pocket expenses incurred or paid by Executive while
representing the Company or conducting Company business. Executive shall be
responsible for maintaining records reasonably satisfactory to support all
claimed business usage of his automobile and to substantiate all out-of-pocket
expenses incurred for which reimbursement is sought and shall furnish such
records to the Company in accordance with its policies.
(c) Vacation. Executive shall be entitled to 15 vacation days each
calendar year, any or all of which may be carried over into a new calendar year,
for a maximum accrual of 30 days. Executive shall also be entitled to any paid
or unpaid holidays provided by the Company in accordance with its generally
applicable personnel policies. Upon termination of Executive's services under
this Agreement, Executive will be paid for unused and accrued vacation time
earned through the last completed day of service.
(d) Indemnification. The Company shall indemnify and hold Executive
harmless in accordance with the terms of the Company's certificate of
incorporation and bylaws, in each case as in effect on the date hereof.
(e) D&O Insurance. The Company shall maintain directors and
officers' liability insurance coverage covering Executive in amounts customary
for similarly situated companies in the telecommunications industry and with
reputable insurers. All such policies shall provide for coverage to Executive on
the same terms and conditions applicable to the coverage provided under such
policies to the Company's other directors and officers.
4. Nondisclosure of Proprietary and Confidential Information.
(a) Confidential Information. Executive agrees to refrain (whether
during or after his employment with the Company) from disclosing or using,
except as permitted by this Agreement or otherwise authorized by the Company's
board of directors, any secrets or confidential information with respect to the
Company or any of the Company's direct or indirect wholly owned subsidiaries
(collectively the "Covered Entities"), including without limitation its trade
secrets, patents, affairs, business plans, strategic, commercial or financial
information other than information that is or becomes publicly available through
no fault of Executive (the
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"Confidential Information"). Confidential Information may be used solely for the
benefit of the Company, and Executive shall not make any other use of such
information. Executive agrees that all materials relating to the business of any
Covered Entity that are provided or made available to Executive, or created by
Executive, during the course of Executive's services to the Company shall be and
remain the property of the Company and/or the applicable Covered Entity (subject
to the terms of any separate agreement between the Company and/or the affected
Covered Entity), whether or not such materials constitute or contain
Confidential Information, and all copies of such materials shall be returned to
the Company immediately upon the termination of Executive's services to the
Company. In the event that the Company notifies the Executive that it has
entered into a confidentiality agreement with a Covered Entity or with any
affiliate of the Company with respect to confidential information provided to
the Company, the Executive shall comply with such reasonable obligations
thereunder as are applicable to the Executive.
(b) Innovations; Inventions. Executive hereby sells, transfers and
assigns to the Company all right, title and interest of Executive in and to any
and all inventions, ideas, disclosures and improvements of any kind or nature
whatsoever, whether patented or unpatented, and any and all copyrightable
materials, in either case whether made or conceived in whole or in part by
Executive alone or together with others during the initial term of this
Agreement or any renewal term, that (i) relate to any methods, designs,
products, processes, apparatus, service or devices sold, leased used or under
construction or development by the Company or the Covered Entities, (ii) relate
to the business, functions or operations of the Company or the Covered Entities,
or (iii) arise from, in whole or in part, the efforts of Executive on behalf of
the Company. Executive will communicate and disclose to the Company promptly all
information, data and details pertaining to any inventions, ideas, disclosures
and improvements described above, in such form or format as the Company may
reasonably request. During the term of this Agreement or any renewal term and
thereafter, Executive will execute, acknowledge or deliver to the Company (at
the Company's expense) such formal transfers and assignments and such other
papers and documents as may be required of Executive to permit the Company to
file and prosecute any patent applications the Company desires to file and
prosecute relating to any of the foregoing, and, as to copyrightable material,
to obtain copyright thereon.
(c) Notwithstanding the foregoing provisions of this Section 4 or
any other provision of this Agreement, nothing in this Agreement shall prohibit
or restrict Executive from: (i) providing information to, testifying or
otherwise assisting in any investigation or proceeding brought by any federal
regulatory or law enforcement agency or legislative body, or any self-
regulatory organization; (ii) providing information to or assisting in an
investigation by the Company's designated legal, compliance and/or human
resources officers; or (iii) testifying, participating or otherwise assisting in
a proceeding relating to an alleged violation of any federal, state or municipal
Jaw relating to fraud or any rule or regulation of the Securities and Exchange
Commission or any self-regulatory organization.
5. Non-Competition; Non-Solicitation.
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(a) In view of the unique value to the Company of Executive's
services and because of the Confidential Information to be obtained by or
disclosed to Executive as described above, Executive agrees that, during the
term of this Agreement and for a period of one year thereafter, provided that
this Agreement is not terminated by the Company without Cause (as defined below)
or by the Executive for Good Reason (as defined below):
(i) Executive will not directly or indirectly assist or become
associated with any broadband communications service provider in any business of
such provider that competes with any of the Covered Entities, whether as a
principal, partner, employee, consultant or shareholder (other than as a holder
of less than 5% of the outstanding voting shares of any publicly traded
company);
(ii) Executive will not directly or indirectly solicit for
employment or employ any employee of any of the Covered Entities, unless such
solicited person shall have ceased to be employed by any such entity for a
period of at least six months; and
(iii) Executive will not directly or indirectly solicit
business from customers of any of the Covered Entities, provided that the
foregoing shall not restrict Executive or any entity with which Executive is
associated from soliciting or doing business with any customer of any of the
Covered Entities, if such solicitation does not interfere with any business
relationship between such solicited customer and any of the Covered Entities.
(b) If Executive violates any provision of Section 4 or Section
5(a), the Company shall be entitled to receive provable damages caused by such
breach, provided that Executive shall not be liable for indirect, special,
consequential or punitive damages (it being understood and agreed that this
remedy is in addition to, and not a limitation on, any injunctive relief or
other rights or remedies to which the Company is or may be entitled to at law or
in equity). Executive acknowledges and agrees that the Company's (and as
applicable, each Covered Entity's) remedies at law for a breach of any provision
of Section 4 or Section 5(a) would be inadequate and, in recognition of this
fact, Executive agrees that, in the event of such a breach, in addition to any
remedies at law, the Company and, as to Section 4, each Covered Entity, without
posting any bond, shall be entitled to obtain equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available. As
provided in Section 10(i) hereof, the equitable remedies referenced in this
Section 5(b) shall be in addition to, and not in substitution for or exclusion
of, any other remedies available at law or in equity for any breach of either or
both of Sections 4 or 5. Executive and the Company each specifically acknowledge
and agree that the provisions of Sections 4 and 5 are for the express benefit of
each Covered Entity and that (i) no waiver, amendment or other modification of
Sections 4 or 5 with respect to a Covered Entity shall be effective unless it
has been consented to in writing by such Covered Entity, and (ii) each such
Covered Entity shall be entitled to enforce the provisions of Section 4 and/or 5
hereof (as appropriate) as fully and with the same rights and effect as if such
Covered Entity were a signatory party to this Agreement.
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(c) If any provisions of Section 4 or Section 5(a) are held to be
invalid or unenforceable, the remaining provisions shall nevertheless continue
to be valid and enforceable as though the invalid or unenforceable parts had not
been included.
6. Noncontravention. Executive represents and warrants to the Company that
Executive is free to enter into this Agreement and has no commitment,
arrangement or understanding to or with any party that restrains or is in
conflict with Executive's performance of the covenants, services and duties
provided for in this Agreement. Executive agrees to indemnify the Company and to
hold it harmless against any and all liabilities or claims arising out of any
unauthorized act or acts by Executive that, the foregoing representation and
warranty to the contrary notwithstanding, are in violation, or constitute a
breach of, any such commitment, arrangement or understanding.
7. Termination. This Agreement shall automatically terminate (and the term
of this Agreement shall thereupon terminate) upon the occurrence of any one of
the following events:
(a) Death. This Agreement shall terminate upon the death of
Executive.
(b) Disability. This Agreement shall terminate upon the Executive's
disability if Executive shall have been incapacitated from illness, accident or
other disability and unable to perform his normal duties hereunder for a
cumulative period of three months in any period of six consecutive months, and
no reasonable accommodation being available, upon either party giving the other
party not less than 30 days written notice. In the event of a disagreement over
the nature of Executive's disability or the determination of whether Executive
is disabled, Executive agrees to be examined by a licensed physician that is
mutually agreeable to Executive and the Company.
(c) Expiration of the Agreement. This Agreement shall terminate upon
the Expiration Date or the scheduled expiration date of any renewal or extension
thereof in compliance with Section l(b).
(d) Termination by the Company With Cause. This Agreement shall
terminate upon the Company's termination of Executive for Cause.
(e) Voluntary Termination by Executive. This Agreement shall
terminate upon Executive's voluntary resignation; provided that Executive shall
provide the Company with no less than 30 days' written notice; provided,
further, that such voluntary resignation shall not relieve or release Executive
from any breach of this Agreement at or prior to the time of such resignation.
(f) Termination by the Company Without Cause, This Agreement shall
terminate upon the Company's termination of Executive for any reason other than
for Cause; provided, that the Company shall provide Executive with no less than
30 days' written notice of any such termination. For purposes of this Agreement,
the Company's failure to renew the
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Agreement for any subsequent one-year term shall be deemed to be a termination
of Executive without Cause.
(g) Termination by Executive for Good Reason. Upon the occurrence of
any event or the existence of any condition or circumstance constituting Good
Reason, Executive may by notice to the Chief Executive Officer, deem a
constructive termination of this Agreement to have occurred.
8. Effect of Termination.
(a) Upon termination of this Agreement pursuant to Sections 7(a)
through (e), the Company shall compensate Executive (or, in the event of
Executive's death, his surviving spouse, if any, or his estate), for (x) accrued
but unused vacation time, (y) any base salary earned, but unpaid, for services
rendered to the Company on or prior to the date of termination and (z) amounts
which the Executive, is otherwise entitled to receive under the terms of or in
accordance with any plan, policy, practice or program of, or contract or
agreement with the Company (including, without limitation, the plans and
programs made available to Executive pursuant to Section 3(a)(iii)), as in
effect immediately prior to the date of such termination, at or subsequent to
the date of termination without regard to the performance by Executive of
further services or the resolution of any contingency, but subject to any and
all rights, remedies and claims of the Company against Executive,
(b) If Executive resigns for Good Reason pursuant to Section 7(g) or
his employment with the Company is terminated without Cause pursuant to Section
7(f), the Company shall thereupon pay Executive the following amounts and
benefits as severance benefits: (i) all amounts payable pursuant to Section
8(a), and (ii) a lump sum equal to one year's base salary hereunder plus an
amount equal to the most recent annual bonus, if any, received by Executive
pursuant to Section 3(a)(ii).
(c) In the event that the Executive's employment is terminated in
connection with a change in the ownership or effective control of the Company or
in the ownership of a substantial portion of the assets of the Company as
contemplated by Code Section 280G(2)(A)(i), the Company shall reimburse the
Executive for any excise tax that may be due under Code Section 4999 on a
fully-grossed up basis (including all resultant excise taxes and income taxes).
Specifically, it is hereby intended that the Executive shall not be adversely
impacted by the excise tax or any reimbursement with regard thereto.
9. Definitions. As used herein, the following terms shall have the
following meanings set forth below:
"Cause" means (i) Executive's conviction of a felony evidencing criminal
dishonesty or moral turpitude, (ii) a willful and material breach of Executive's
duty of loyalty to the Company or (iii) after 20 business days following
Executive's receipt of written notice from the Company specifying the
particulars in reasonable detail, Executive's failure to comply with or to cure,
as applicable (A) a willful and material refusal to comply with specific written
directions of the
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board of directors (or specific written directions of the chief executive
officer) that are consistent with Executive's employment agreement with the
Company or any of their respective subsidiaries and capable of being performed
by him, or (B) a willful and material breach of Executive's duty of due care to
the Company.
"Good Reason" means (i) a material adverse change in Executive's duties,
responsibilities or reporting relationships, (ii) a relocation of Executive's
principal office to a location more than 30 miles away from his then current
office, (iii) a reduction of salary not agreed to by Executive, or a material
diminution of other employee benefits (other than any change in employee
benefits approved by the board and implemented in a non-discriminatory fashion
with respect to all participating employees), or any other material adverse
change in his working conditions (iv) a material breach by the Company of other
obligations under Executive's employment agreement with the Company or a
subsidiary of the Company, provided that in each such case the Executive gives
prompt written notice to the Company's Chief Executive Officer specifying with
reasonable particularity the grounds constituting "Good Reason" and that such
grounds are not cured after 20 business days following the Company's receipt of
such written notification from Executive.
10. Miscellaneous.
(a) Merger; Amendment. This Agreement constitutes the entire
agreement between the parties and supersedes and replaces all prior agreements
with respect to the subject matter hereof, and may be changed, extended or
modified only by an agreement in writing signed by the parties.
(b) Assignment. The rights and obligations of the Company in this
Agreement shall inure to its benefit and be binding upon its successors in
interest (whether by merger, consolidation, reorganization, sale of stock or
assets or otherwise). This Agreement shall also inure to the benefit of
Executive's heirs, executors, administrators and legal representatives. This
Agreement, being for the personal services of Executive, shall not be assignable
by Executive.
(c) Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any party.
(d) Arbitration. Except as otherwise provided herein, any
controversies or claims arising out of, or relating to this Agreement or the
breach thereof, shall be settled by arbitration in accordance with the
commercial rules of the American Arbitration Association, which decision shall
be final and binding on the parties, and judgment upon the award rendered shall
be entered in any court having jurisdiction thereof. Any party may demand such
arbitration in accordance with the procedures set out in those rules. The
arbitration shall be conducted in Seattle, Washington, or such other location as
may be mutually agreed upon by the parties. The arbitrator shall be selected in
a manner that is mutually agreed upon by the parties. The arbitrator shall not
award special, consequential, or punitive damages. In the event of any
arbitration
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proceeding hereunder, the Company will (x) pay the fees and expenses of the
arbitrator and (y) advance the Executive's documented out-of-pocket costs
(including reasonable counsel fees and expenses) on a current basis, provided,
that if Executive is determined not to be the substantially prevailing party on
the matters submitted for arbitration (which determination shall be made by the
arbitrator and included in his or her decision), Executive will promptly
reimburse the Company for any expenses so advanced. Executive acknowledges that
the Company is agreeing to make advances to him pursuant to the preceding
sentence in consideration of his agreement to reimburse the Company for any such
advances to the extent required by the preceding sentence. The Company will in
all events pay its own costs (including counsel fees and expenses) in connection
with any arbitration proceeding hereunder.
(e) Notices. All notices given hereunder shall be in writing and
shall be deemed to have been duly given and received (i) when delivered
personally, with receipt acknowledged in writing by the recipient, (ii) on the
tenth business, day after being sent by registered or certified mail (postage
paid, return receipt requested), (iii) one business day after being sent by a
reputable overnight delivery service, postage or delivery charges prepaid, or
(iv) on the date on which a facsimile is transmitted, in each case to the
parties at their respective addresses stated below; provided, that if the
intended recipient of any notice hereunder refuses to acknowledge receipt
thereof in writing, such notice shall be deemed to have been given on the date
of such refusal. Any party may change its address for notice by giving notice of
the new address to the other party in accordance with the provisions of this
paragraph.
If to the Company:
Clearwire Corporation
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Attention: EVP, Corporate Affairs
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Executive:
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(f) Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and the Agreement shall be construed in all respects as though such
invalid or unenforceable provision were omitted.
(g) Survival. The provisions of Sections 3(d), 4, 5, 8 and 10 shall
survive any termination of this Agreement.
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(h) Governing Law. This Agreement shall be interpreted according to
the internal laws of the State of Washington, without regard to choice of law
rules that would result in the application of the laws of another state.
(i) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or the
beginning of the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy by such
party.
(j) Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or related to this agreement or the transactions contemplated
hereby.
(k) Announcement. Executive, in consultation with Executive's
present employer, shall determine the timing of the public announcement of the
Executive's employment by the Company. Until such time as the Executive so
indicates, the existence of this Agreement and subject matter hereof shall be
maintained in strict confidence by the parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Clearwire Corporation
By: /s/ ▇▇▇ ▇▇▇▇▇
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Title: Executive Vice President
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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