EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of May 30, 1997, between
AUDIO COMMUNICATIONS NETWORK, INC., a Florida corporation (the "Company"), and
XXXXXXXX XXXXXXXXXXXX (the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to accept such employment, on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises,
representations and warranties set forth herein, and for other good and valuable
consideration, it is hereby agreed as follows:
1. POSITION AND DUTIES. (A) EMPLOYMENT AND POSITION - The Company
hereby agrees to employ the Executive, and the Executive hereby accepts such
employment, upon the terms and conditions set forth herein. The Executive shall
serve as President and Chief Operating Officer of the Company. The Executive
shall also serve as an executive officer of any or all of the Company's
subsidiaries without any compensation other than as set forth herein.
(B) DUTIES - During the Term, the Executive shall perform
and discharge the duties generally consistent with the position of President and
Chief Operating Officer and such other executive duties consistent with such
offices as may be assigned to him by the Board of Directors of the Company (the
"Board") from time to time in accordance with this Agreement. During the "Term",
as defined in Section 5 below, and any extension thereof, the Executive shall
perform such duties on a full-time basis provided, however, that the Executive
shall not be precluded from devoting such time to such other business and
personal affairs as shall not materially interfere with the performance of his
duties hereunder.
2. COMPENSATION. (A) BASE SALARY - For the Executive's services
hereunder, the Company shall pay the Executive an annual salary (as the same may
be increased from time to time, the "Base Salary") of $200,000 payable in
accordance with the customary payroll practices of the Company.
(B) BONUS - The Executive shall be entitled to a bonus of
$50,000 for each calendar year during the Term of this Agreement if the Company
achieves or exceeds "Plan" for such calendar year. If the Company achieves less
than 95% of Plan for any calendar year, Executive shall not be entitled to any
bonus for such calendar year. If the Company achieves 95% or more of Plan for
any calendar year but less than 100% of Plan for such calendar year, Executive
shall be entitled to a proportionate share of the $50,000 bonus for such
calendar year.
Such bonus shall be payable within twenty (20) days after the Company's
Compensation Committee receives the Company's audited financials for such year.
If the Executive was not employed by the Company for the entire calendar year,
the bonus otherwise payable, if any, for such calendar year will be pro-rated
for the number of complete months of such year during which the Executive was
employed. "Plan" for purposes hereof shall mean the Company's (and its
subsidiaries on a consolidated basis) earnings before interest, taxes,
depreciation and amortization less capital expenditures for the applicable
period as set forth in the projections provided to its lenders in connection
with the Company's Credit Agreement of even date, as now or hereafter amended.
In addition, the Executive shall be entitled to such other bonus or bonuses as
the Board in its discretion may determine to award to him from time to time.
(C) ADJUSTMENTS. The Base Salary shall be increased by
$25,000 per annum and the bonus shall be increased by $25,000 per annum (or a
pro-rata portion thereof for any period less than a year) should Xxxxx Xxxxx
("Xxxxx") in his sole discretion elect to reduce his time commitment to the
Company as set forth in paragraph 3 of Xxxxx'x Employment Agreement with the
Company of even date (the "Xxxxx Employment Agreement").
(D) WITHHOLDING. All payments required to be made by the
Company to the Executive under this Agreement (whether under this Section 2 or
otherwise) shall be subject to withholding taxes, social security and other
payroll deductions as required by law in accordance with the Company's policies
applicable to employees of the Company at the Executive's level and the
provisions of the "Benefit Plans," as defined in Section 3 below.
3. BENEFITS. (A) BENEFITS PLANS - During the Term, the Company
shall provide to the Executive all fringe benefits which the Company may
generally make available to its senior executive employees from time to time,
including, without limitation, benefits provided under the Company's pension and
profit-sharing plans (if any), health benefit plans (such as medical and
hospitalization coverage), and insurance plans (such as life, supplemental life,
disability, business travel, accident and accidental death and dismemberment) on
the same basis as offered to such other executives (collectively, the "Benefit
Plans").
(B) AUTOMOBILE - During the Term, the Company shall
provide the Executive with either of the following, at the Executive's option,
(a) a car allowance or (b) a luxury class car with lease or finance payments to
be paid by the Company provided that the Company shall not be obligated to spend
more than $500 per month with respect to the foregoing and all related expenses,
which amount may be increased by the amount by which the maximum $500 per month
similar benefit available to Xxxxx under the Xxxxx Employment Agreement is not
used.
(C) VACATIONS, SICK LEAVE AND HOLIDAYS. The Executive
shall be entitled to four (4) weeks of paid vacation during each year of the
Term (and a pro rata portion thereof for any portion of the Term and any
extension thereof that is less than a full year). In addition, Executive shall
be entitled to paid sick leave and holidays in accordance with the Company's
usual policies for its executives.
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4. REIMBURSEMENT OF EXPENSES. During the Term, the Company shall
pay or reimburse the Executive for all reasonable travel, entertainment and
other business expenses actually incurred or paid by the Executive in the
performance of his duties hereunder upon presentation of expense statements or
vouchers or such other supporting information as the Company may reasonably
require of the Executive, but only to the extent that such expenses are incurred
in accordance with the Company's general policies as in effect from time to
time.
5. TERM; TERMINATION. Subject to the provisions of this Section
5, the initial term of the Executive's employment under this Agreement shall
commence on the date hereof and shall end on the first anniversary hereof
(except for those obligations, if any, which by their terms survive or
continue). This Agreement shall automatically be renewed upon the expiration of
said one-year period for successive additional periods of one year each unless
either party notifies the other in writing at least ninety (90) days prior to
the expiration of the then current Term of its/his election to terminate this
Agreement as of the end of such term. The initial one-year term and all renewals
thereof are referred to herein as the "Term". The employment of the Executive
may be terminated prior to the expiration of the Term in the manner described in
this Section 5.
(A) TERMINATION BY THE COMPANY FOR GOOD CAUSE - The
Company shall have the right to terminate the employment of the Executive for
"Good Cause" (as such term is defined herein) by written notice to the Executive
specifying the particulars of the conduct of the Executive forming the basis for
such termination.
(B) TERMINATION BY THE EXECUTIVE FOR GOOD REASON - The
Executive shall have the right to terminate his employment hereunder for Good
Reason (as such term is defined herein) by written notice to the Company
specifying the grounds constituting such Good Reason.
(C) TERMINATION UPON DEATH - The employment of the
Executive hereunder shall terminate immediately upon his death.
(D) TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE. The
Company shall have the right to terminate the employment of the Executive
without "Good Cause" upon at least ninety (90) days prior written notice to the
Executive.
(E) THE COMPANY'S OPTIONS UPON DISABILITY. If the
Executive becomes physically or mentally disabled during the Term and any
extension thereof so that he is unable to perform the services required of him
pursuant to this Agreement for an aggregate of 90 days in any six-month period
(the "Disability Period"), the Board shall have the option, in its discretion,
by giving written notice thereof, either to (A) terminate the Executive's
employment hereunder; or (B) continue the employment of the Executive hereunder
upon all the terms and conditions set forth herein except that for the balance
of the Term and any extension thereof the Executive, while disabled, shall
receive as compensation on amount equal to 50% of the Base Salary then in
effect, (retaining full benefits) which compensation shall revert to full pay in
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accordance with the terms and provisions hereof when the Executive is able to
resume his duties on substantially the same basis as prior to the occurrence of
such disability. Regardless of which option the Company exercises or shall be
deemed to have exercised, during the Disability Period, the Executive shall
continue to receive his Base Salary and other benefits (other than a bonus which
bonus, if any, shall be pro-rated for the number of complete months during which
the Executive was employed hereunder and not disabled) provided herein net of
any payments received under any disability policy or program of which the
Executive is a beneficiary or recipient.
(F) TERMINATION DATE - Any notice of termination given
pursuant to the provisions of this Agreement shall specify therein the effective
date of such termination (the "Termination Date").
(G) CERTAIN DEFINITIONS - For purposes of this Agreement,
the following terms shall have the following meanings:
(i) The "affiliate" of any Person means any other
Person directly or indirectly through one or more intermediary Persons,
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" shall mean the power to direct the
management and policies of such Person, directly or indirectly, by or through
stock or equity ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other Persons by or through stock or equity ownership, agency or otherwise;
and the terms "controlling" and "controlled" shall have meanings correlative to
the foregoing.
(ii) "Change of Control" with respect to the Company,
means the occurrence of any of the following:
(A) the merger or consolidation of the Company
with one or more other corporations as a result of which the
holders of the outstanding capital stock of the Company entitled
to vote for the election of directors immediately before the
merger hold less than 51% of such voting shares of the surviving
or resulting corporation;
(B) the sale of all or substantially all of the
assets of the Company or its subsidiaries taken as a whole;
(C) individuals who are representatives of
SunCom Communications L.L.C. cease for any reason to constitute
at least four members of the Board of Directors of the Company,
unless the election, or the nomination for election by the
Company's stockholders, of each new director was approved by a
vote of a majority of the directors then still in office who were
directors at the date hereof; or
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(D) Suncom Communications L.L.C. ceases to own
at least 51% of the issued and outstanding voting shares.
Provided, however, that a Change of Control shall not be deemed to have occurred
hereunder if either (A) the Executive has consented thereto or (B) such change
occurs in accordance with the Second Amended and Restated Limited Liability
Company Agreement of even date, as amended, of SunCom Communications L.L.C. as a
result of the Company's failure to achieve certain required percentages of Plan.
(iii) "Good Cause" shall exist if, and only if:
(A) the Executive fails in any material respect
to perform his obligations hereunder as provided herein, provided
that such Good Cause shall not exist hereunder unless the Company
shall first have provided the Executive with written notice
specifying in reasonable detail the factors constituting such
material failure and such material failure shall not have been
cured in all material respects by the Executive within ten (10)
business days after such notice;
(B) the Executive has been convicted of a crime
which constitutes a felony under applicable law or has entered a
plea of guilty or nolo contendere with respect thereto;
(C) the Executive is dependent upon alcohol or
illegal drugs; or
(D) the Company (and its subsidiaries on a
consolidated basis) achieves less than 70% of Plan with respect
to any applicable fiscal quarter during the Term.
(iv) "Good Reason" means the occurrence of any of the
following events:
(A) (i) the assignment to the Executive of any
duties inconsistent in any material respect with the Executive's
then position (including status, offices, titles and reporting
relationships), authority, duties or responsibilities, or any
other action by the Company which when taken as a whole results
in a significant diminution in the Executive's position,
authority, duties or responsibilities, or (ii) any other material
breach by the Company of the terms and provisions of this
Agreement not otherwise covered by subsections (B) and (C) below,
provided that Good Reason shall not exist hereunder unless the
Executive shall first have provided the Company with written
notice specifying in reasonable detail the Company's breach and
the Company shall not have cured
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such breach in all material respects within ten (10) business
days after such notice;
(B) a Change of Control of the Company; or
(C) the Company requiring the Executive to be
based at any location other than New York City, New York except
for requirements of temporary travel on the Company's business.
(v) "Person" means any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture, court or government (or political subdivision or
agency thereof).
6. OBLIGATIONS ON TERMINATION. (A) PAYMENT OBLIGATIONS OF THE
COMPANY IN CASE OF TERMINATION FOR GOOD REASON OR WITHOUT CAUSE OR REASON. (i)
Upon termination of the Executive's employment pursuant to Sections 5(b), the
Company shall pay the Executive a lump sum cash payment equal to the greater of
(A) three months Base Salary or (B) the Base Salary for the then remaining Term,
plus, in either event, unreimbursed expenses, payable on the Termination Date,
plus any accrued and unpaid bonuses.
(ii) Notwithstanding anything to the contrary
contained herein or in any other agreement between the Company and the
Executive, in the event that Executive's employment is terminated pursuant to
Section 5(b) hereof, any and all costs and expenses, including but not limited
to, reasonable legal fees incurred by Executive in enforcing or establishing any
of his rights hereunder shall be immediately paid to Executive upon presentation
to the Company of such itemized documentation therefor as the Company may
reasonably require.
(iii) Upon termination of the Executive's employment
pursuant to Section 5(d), the Company shall pay the Executive a lump sum cash
payment equal to the Base Salary for the then remaining Term and unreimbursed
expenses payable on the Termination Date, plus any accrued and unpaid bonus.
(B) PAYMENT OBLIGATIONS OF THE COMPANY IN CASE OF
TERMINATION FOR DEATH, VOLUNTARY RESIGNATION OR GOOD CAUSE. Upon termination of
the Executive's employment upon death or disability, by the Executive for any
reason other than Good Reason or by the Company for Good Cause, the Company
shall have no payment obligations to the Executive, except for the payment of
any accrued and unpaid compensation as of the Termination Date (including unpaid
bonuses and other unpaid benefits) and reimbursement of any unreimbursed
expenses except as provided pursuant to Section 5(e) above, except that, in the
event of death, the Company shall also pay the Executive's estate a lump sum
equal to three (3) months of the Executive's Base Salary in effect on the date
of death, within ten (10) days after the date of death.
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(C) THE EXECUTIVE'S RIGHT TO ACQUIRE AUTOMOBILES. Upon
termination of the Executive's employment with the Company for whatever reason,
at his option to be exercised by the Executive giving written notice thereof
within 30 days of the Termination Date, the Executive may assume all obligations
of the Company under the applicable sale or lease agreement relating to the
automobile then being provided by the Company to the Executive pursuant to
Section 3 hereof provided that the Executive agrees to indemnify the Company
with respect thereto. If such automobile has been fully-paid for by the Company,
the Executive shall have the right to purchase it from the Company at its then
book value.
(D) CONTINUED MEDICAL COVERAGE. Upon the termination of
the Executive's employment with the Company for whatever reason, to the extent
permitted by applicable law, the Company shall continue to provide the Executive
with medical and hospitalization insurance coverage for a period of the longer
of: (i) 12 months from the Termination Date; (ii) the period required by
applicable law or (iii) the period set forth in the applicable Benefit Plans at
the Executive's cost in the case of termination under Section 5(a) or 5(c) or in
the case of non-renewal of the Term by the Executive pursuant to Section 5 or at
the Company's cost in the case of non-renewal of the Term by the Company
pursuant to Section 5 or in the case of termination under Section 5(b), (d) or
(e).
7. SEVERABILITY. Should any provision of this Agreement be held,
by a court of competent jurisdiction, to be invalid or unenforceable, such
invalidity or unenforceability shall not render the entire Agreement invalid or
unenforceable, and this Agreement and each individual provision hereof shall be
enforceable and valid to the fullest extent permitted by law.
8. SUCCESSORS AND ASSIGNS. (a) This Agreement and all rights
under this Agreement are personal to the Executive and shall not be assignable
other than by will or the laws of descent. All of the Executive's rights under
the Agreement shall inure to the benefit of his heirs, personal representatives,
designees or other legal representatives, as the case may be.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. Any Person succeeding
to the business of the Company by merger, purchase, consolidation or otherwise
shall assume by contract or operation of law the obligations of the Company
under this Agreement.
9. GOVERNING LAW; JURISDICTION. This Agreement shall be construed
in accordance with and governed by the laws of the State of New York, without
regard to the conflicts of laws rules thereof. The parties hereby irrevocably
submit to the exclusive jurisdiction of any state or federal court in New York
County, New York with respect to any dispute arising out of or in connection
with this Agreement.
10. NOTICES. All notices, requests and demands given to or made
upon the respective parties hereto shall be deemed to have been given when
received or refused if mailed by registered or certified mail, postage prepaid,
if delivered by hand, or if delivered by Federal Express or similar overnight
delivery service, addressed to the parties at their addresses set forth
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below or to such other addresses furnished by notice given in accordance with
this Section 10: (a) if to the Company, to Gateway Center, 0000 Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, and (b) if to the Executive, to 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
11. COMPLETE UNDERSTANDING. This Agreement supersedes any prior
contracts, understandings, discussions and agreements relating to employment
between the Executive and the Company and constitutes the complete understanding
between the parties with respect to the subject matter hereof. No statement,
representation, warranty or covenant has been made by either party with respect
to the subject matter hereof except as expressly set forth herein or therein.
12. MODIFICATION; WAIVER. (a) This Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by the Company and the Executive or in the case of a
waiver, by the party against whom the waiver is to be effective. Any such waiver
shall be effective only to the extent specifically set forth in such writing.
(b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
13. MUTUAL REPRESENTATIONS. (a) The Executive represents and
warrants to the Company that the execution and delivery of this Agreement and
the fulfillment of the terms hereof (i) will not constitute a default under or
conflict with any agreement or other instrument to which he is a party or by
which he is bound (taking into account the contemporaneous termination of the
Management Agreement between SunCom Communications L.L.C. and SunCom Management
L.L.C. dated September 14, 1995) and (ii) do not require the consent of any
Person.
(b) The Company represents and warrants to the Executive
that this Agreement has been duly authorized, executed and delivered by the
Company and that the fulfillment of the terms hereof (i) will not constitute a
default under or conflict with any agreement or other instrument to which it is
a party or by which it is bound and (ii) do not require the consent of any
Person.
(c) Each party hereto warrants and represents to the other
that this Agreement constitutes the valid and binding obligation of such party
enforceable against such party in accordance with its terms.
14. HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not control or affect the meaning or construction of
this Agreement.
15. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by the other party hereto.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed in its corporate name by one of its officers duly authorized to
enter into and execute this Agreement, and the Executive has manually signed his
name hereto, all as of the day and year first above written.
AUDIO COMMUNICATIONS NETWORK, INC.
_____________________ By:_______________________________
Witness Name/Title:_______________________
_____________________ __________________________________
Witness XXXXXXXX XXXXXXXXXXXX
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