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EXHIBIT 10.27
RETENTION AGREEMENT
This RETENTION AGREEMENT ("Agreement"), effective as of January 3,
2000, by and between WebLink Wireless, Inc., a Delaware corporation (the
"Company"), and Xxxx X. Xxxxxxx (the "Executive"), evidences that;
WHEREAS, the Executive is the Chairman and Chief Executive Officer of
the Company and has made and/or is expected to make or continue to make
significant contributions to the profitability, growth and financial strength of
the Company;
WHEREAS, the Company considers it essential to the best interests of
its stockholders to xxxxxx the continuous employment of key management personnel
of the Company;
WHEREAS, in order to induce Executive to remain in the employ of the
Company, the Company will make certain payments to Executive in the event
Executive's employment with the Company is terminated under certain
circumstances described below;
WHEREAS, the Company and the Executive desire to establish certain
employment and compensation rights and obligations with respect to the
Executive; and
WHEREAS, the Executive is willing to continue to render services to the
Company in consideration of the terms and subject to the conditions set forth in
this Agreement;
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Operation of Agreement.
(a) For purposes of this Agreement, a "Change in Control"
will be deemed to have occurred if at any time during
the Term (as hereinafter defined) any of the
following events shall occur:
(i) The Company is merged, consolidated,
converted or reorganized into or with
another corporation or other legal entity,
and as a result of such merger,
consolidation, conversion or reorganization
less than a majority of the combined voting
power of the then outstanding securities of
the Company or such corporation or other
legal entity are
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held, immediately after such transaction, in
the aggregate, by the holders of Voting
Stock (as hereinafter defined) of the
Company immediately prior to such
transaction and/or such voting power is not
held by substantially all of such holders in
substantially the same proportions relative
to each other;
(ii) The Company sells (directly or indirectly)
all or substantially all of its assets
(including, without limitation, by means of
the sale of the capital stock or assets of
one or more direct or indirect subsidiaries
of the Company) to any other corporation or
other legal entity (other than a directly or
indirectly majority-owned subsidiary of the
Company), of which less than a majority of
the combined voting power of the then
outstanding voting securities (entitled to
vote generally in the election of directors
or persons performing similar functions on
behalf of such other corporation or legal
entity) of such other corporation or legal
entity is held in the aggregate by the
holders of Voting Stock of the Company
immediately prior to such sale and/or such
voting power is not held by substantially
all of such holders in substantially the
same proportions relative to each other;
(iii) Any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended
(the "Exchange Act")) becomes (subsequent to
the date hereof) the beneficial owner (as
the term "beneficial owner" is defined under
Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange
Act) of securities representing fifty
percent (50%) or more of the combined voting
power of the outstanding securities entitled
to vote generally in the election of
directors of the Company ("Voting Stock");
provided, however, purposes of this Section
1(a)(iii), the term "person" will not be
deemed to include any "person" who, as of
the date hereof, owns forty-five percent
(45%) or more of the Voting Stock of the
Company; or
(iv) The stockholders of the Company approve a
plan contemplating the liquidation or
dissolution of the Company.
(b) The period during which this Agreement shall be in
effect (the "Term") shall commence as of the date
hereof and shall expire as of the close
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of business on January 3, 2001, provided, however,
unless either the Executive or the Company gives
written notice of intent to terminate this Agreement
upon the expiration of the first year of this
Agreement or any subsequent renewal period, this
Agreement will automatically be renewed, upon each
anniversary of the date hereof, for successive one
year periods ("renewal periods"). Any such notice of
termination must be given not less than thirty (30)
days prior to the end of the first year of this
Agreement or any subsequent renewal period.
Notwithstanding the foregoing, the Executive may
elect not to renew this Agreement at any time within
the fifteen (15) day period immediately following
receipt by the Executive of a Compensation Resolution
(as hereinafter defined), regardless of whether such
Compensation Resolution is delivered before or after
any anniversary date of this Agreement. An election
not to renew this Agreement will not affect any
rights which have vested or otherwise accrued prior
to the expiration of this Agreement. The expiration
of the Term of this Agreement will not be deemed to
be a "termination" of this Agreement for the purposes
of Sections 4 and 5.
2. Employment. Subject to the terms and conditions of this
Agreement, the Company shall continue the Executive in its employ and the
Executive shall remain in the employ of the Company for the Term, in the
position and with substantially the same duties and responsibilities that the
Executive has as of the date hereof or in the position and with the duties and
responsibilities that the Company and the Executive may hereafter mutually agree
in writing. Throughout the Term, the Executive shall devote substantially all of
the Executive's time during normal business hours (subject to vacations, sick
leave and other absences in accordance with the policies of the Company as in
effect for senior executives as of the date hereof or as otherwise approved by
the Board of Directors of the Company (the "Board")) to the business and affairs
of the Company and shall attempt to maximize stockholder value, but nothing in
this Agreement shall preclude the Executive from devoting reasonable periods of
time during normal business hours to (i) serving as a director, trustee or
member of or participant in any organization or business so long as such
activity does not materially interfere with the performance of the Executive's
obligations pursuant to this Agreement, (ii) engaging in charitable and
community activities, or (iii) managing the Executive's personal investments.
3. Compensation During Term. During the Term, the Executive shall
receive an annual base salary (which base salary is herein referred to as "Base
Pay") and shall have the opportunity to earn an annual bonus (the "Annual
Bonus") and may have the opportunity to earn a special bonus (the "Special
Bonus") in each case, in such amounts,
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at such rates, at such times and subject to such conditions as may be determined
annually by the Board pursuant to a formal resolution adopted by the Board
(hereinafter referred to as the "Compensation Resolution"). After delivery of a
copy of the Compensation Resolution (certified by the Secretary of the Company)
to the Executive, the amount, terms and conditions of the Base Pay, Annual Bonus
and Special Bonus (if any) to be earned by and paid to the Executive for the
fiscal year to which the Compensation Resolution relates, may not be amended in
a manner adverse to the Executive without the written consent of the Executive.
The Executive acknowledges the receipt of the Compensation Resolution relating
to the 2000 fiscal year of the Company. The Company will deliver to the
Executive subsequent Compensation Resolutions relating to subsequent fiscal
years of the Company, in a manner consistent with the Company's past
compensation practices. Unless otherwise provided in the applicable Compensation
Resolution, the Executive's Base Pay shall be payable in accordance with the
Company's generally applicable payroll policies and this Agreement. Unless
otherwise provided in the applicable Compensation Resolution, the Executive's
Annual Bonus shall be paid in accordance with the Company's past compensation
practices and this Agreement. Any Special Bonus payable to the Executive shall
be paid in accordance with the terms of the applicable Compensation Resolution
and this Agreement. The Annual Bonus and the Special Bonus are hereinafter
collectively referred to as "Incentive Pay." If this Agreement is "renewed" for
one or more renewal periods (pursuant to Section 2) the Executive's Base Pay for
such renewal period will not be less than the Base Pay payable to the Executive
pursuant to the Compensation Resolution applicable to the immediately preceding
annual period and the target bonus amount with respect to any such renewal
period will be not less than one hundred percent (100%) of the Base Pay payable
with respect to such renewal period.
4. Termination.
(a) This Agreement may be terminated by the Company
during the Term upon the occurrence of one or more of
the following events:
(i) If the Executive is unable to perform the
essential functions of the Executive's
position(s) (with or without reasonable
accommodation) because the Executive has
become Disabled (as hereinafter defined),
and actually begins to receive disability
benefits pursuant to, a long-term disability
plan maintained by or on behalf of the
Company for its employees generally; or
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(ii) For "Cause," which for purposes of this
Agreement shall mean:
(A) the Executive shall have committed
an intentional act of fraud,
embezzlement or a material theft in
connection with the Executive's
duties or in the course of the
Executive's employment with the
Company;
(B) the Executive shall have been
convicted of felony and the
continuation of the employment of
the Executive with the Company
following such conviction will have
a materially adverse affect upon
the reputation and/or prospects of
the Company;
(C) the Executive shall have breached
any material duty of loyalty to the
Company; provided the actions of
the Executive were not approved by
the Board following full disclosure
of the Executive's interest;
(D) the Executive shall have materially
breached the obligations of the
Executive pursuant to the second
sentence of Section 2;
(E) the Executive shall have committed
intentional wrongful damage to
property of the Company (which is
materially harmful to the Company);
or
(F) the Executive shall have committed
intentional wrongful disclosure of
secret processes or confidential
information of the Company (which
is materially harmful to the
Company).
Notwithstanding the foregoing, the Company's right to terminate this Agreement
with respect to any action of the Executive described in Section 4(a)(ii) will
be deemed to have been irrevocably waived by the Company, if the Company does
not terminate this Agreement within sixty (60) days following the Board first
being made aware of such action of the Executive. For purposes of this
Agreement, no act, or failure to act, on the part of the Executive shall be
deemed "intentional" if it was due primarily to an error in judgment or
negligence, but shall be deemed "intentional" only if done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that the
Executive's action or omission was in the best interest of the Company.
Notwithstanding the foregoing, this Agreement shall not be deemed to have been
terminated for "Cause" hereunder unless and until there shall have been
delivered to the Executive a copy of a resolution duly
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adopted by the affirmative vote of not less than a majority of the Board then in
office at a meeting of the Board called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive has committed an act
set forth above in this Section 4(a)(ii) and specifying the particulars thereof
in detail. Nothing herein shall limit the right of the Executive or the
Executive's beneficiaries to contest the validity or propriety of any such
determination. In addition, to the extent that any action of the Executive
relied upon by the Company to terminate this Agreement pursuant to Section
4(a)(ii) is susceptible of being cured, the Company must provide the Executive
with written notice of its intent to terminate this Agreement (such notice to
identify with specificity the action upon which the Company intends to rely to
terminate this Agreement) and the right of the Company to terminate this
Agreement based upon such action shall be suspended for a period of thirty (30)
days to allow the Executive to cure such action. If the Executive is successful
in curing such action within such thirty (30) day period, such action may not
thereafter be relied upon by the Company as a basis for terminating this
Agreement. As used herein, the term "Disabled" will be deemed to mean the
inability of the Executive, as determined reasonably by the Board, by reason of
any medically determinable physical or mental impairment to engage in the
performance of the material duties of the Executive referenced in Section 2 for
a period which has lasted or can reasonably be expected to last without material
interruption for not less than twelve (12) months.
(b) The Executive shall be entitled to severance benefits
as follows:
(i) The Executive will be entitled to benefits
as provided in Section 5 hereof upon any
termination by the Company of this Agreement
for any reason other than (x) for Cause, (y)
as a result of the death of the Executive or
(z) by reason of the Executive becoming
Disabled and the actual receipt by the
Executive of disability benefits in
accordance with Section 4(a)(i) hereof;
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(ii) The Executive will be entitled to benefits
as provided in Section 5 hereof upon
termination by the Executive of this
Agreement during the Term upon the
occurrence of any of the following events:
(A) Failure to elect or reelect the
Executive to the office(s) of the
Company which the Executive holds
as of the date hereof, or failure
to elect or reelect the Executive
as a director of the Company or the
removal of the Executive as a
director of the Company (or any
successor thereto);
(B) A significant adverse change
imposed by the Board in the nature
or scope of the authorities,
powers, functions, responsibilities
or duties attached to the
position(s) with the Company which
the Executive held immediately
prior to the date hereof,
(C) The Company shall require that the
principal place of work of the
Executive be changed to any
location which is in excess of 25
miles from the location thereof
immediately prior to the date
hereof or to travel away from the
Executive's office in the course of
discharging the Executive's
responsibilities or duties
hereunder significantly more (in
terms of either consecutive days or
aggregate days in any calendar
year) than was required of the
Executive prior to the date hereof
without, in either case, the
Executive's prior consent;
(D) Any material breach of this
Agreement by the Company or any
successor thereto, including,
without limitation, any failure by
the Company to pay to the Executive
the compensation payable to the
Executive by the Company pursuant
to this Agreement; and
(iii) Upon any termination of this Agreement based
upon the Executive being Disabled, the
Executive will promptly be paid the Special
Bonus, if any, set forth in the applicable
Compensation Resolution.
(c) For the Executive's service pursuant to Subsection
2(a) hereof, during the Term the Executive shall be a
full participant in, and shall be entitled to the
perquisites, benefits and service credit for benefits
as provided under any and all employee retirement
income and welfare benefit policies, plans, programs
or arrangements in which senior
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executives of the Company participate generally,
including without limitation any stock option, stock
purchase, stock appreciation, phantom stock, savings,
pension, supplemental executive retirement or other
retirement income or welfare benefit, deferred
compensation, incentive compensation, group and/or
executive life, accident, health, dental,
medical/hospital or other insurance (whether funded
by actual insurance or self-insured by the Company),
disability, salary continuation, expense
reimbursement and other employee benefit policies,
plans, programs or arrangements that may exist as of
the date hereof or any equivalent successor policies,
plans, programs or arrangements that may be adopted
hereafter by the Company (collectively, "Employee
Benefits"). A termination by the Company pursuant to
Section 4(a) hereof or by the Executive pursuant to
Section 4(b) hereof shall not affect any rights which
the Executive may have pursuant to any agreement,
policy, plan, program or arrangement of the Company
providing Employee Benefits, which rights shall be
governed by the terms thereof.
(d) Notwithstanding the foregoing, this Agreement may be
terminated by the Company or the Executive at any
time upon thirty (30) days prior written notice.
5. Severance Compensation.
(a) Without affecting any additional obligations of the
Company set forth in an applicable Compensation
Resolution, if this Agreement is terminated in the
manner described in Sections 4(b)(i) or 4(b)(ii)
hereof, the Company shall pay to the Executive the
amount specified in Section 5(a)(i) hereof within
five business days after the date (the "Termination
Date") that this Agreement is terminated (the
effective date of which shall be the date of
termination, or such other date that may be specified
by the Executive if the termination is pursuant to
Section 4(b) hereof):
(i) In lieu of any further payments to the
Executive for periods subsequent to the
Termination Date, but without affecting the
rights of the Executive referred to in
Section 5(c) hereof or pursuant to any stock
option, phantom stock, stock appreciation
right, restricted stock grant or similar
award, (x) if the termination of the
Executive's employment occurs prior to
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the occurrence of a Change in Control, a
lump sum payment (the "Pre-Change in Control
Severance Payment") in an amount equal to
the sum of (A) the aggregate Base Pay plus
(B) the aggregate Incentive Pay, which, in
each case, the Executive would have received
pursuant to this Agreement during the
remainder of the Term had the Executive's
employment continued for the remainder of
the Term and (y) if the termination of the
Executive's employment occurs subsequent to
the occurrence of a Change in Control, a
lump sum payment (the "Post-Change in
Control Severance Payment") in an amount
equal to the sum of (A) the aggregate Base
Pay plus (B) the aggregate Annual Bonus
which the Executive would have received
pursuant to this Agreement during the
remainder of the Term had the Executive's
employment continued for the remainder of
the Term. The Pre-Change in Control
Severance Payment and the Post-Change in
Control Severance Payment are hereinafter
collectively referred to as the "Severance
Payment."
(ii) For the remainder of the Term the Company
shall arrange to provide the Executive with
Employee Benefits substantially similar to
those which other senior executive officers
of the Company are entitled to receive (and
if and to the extent that such benefits
shall not or cannot be paid or provided
under any policy, plan, program or
arrangement of the Company solely due to the
fact that the Executive is no longer an
officer or employee of the Company, then the
Company shall itself pay to the Executive
and/or the Executive's dependents and
beneficiaries, such Employee Benefits) and
(B) without limiting the generality of the
foregoing, the remainder of the Term shall
be considered service with the Company for
the purpose of service credits under the
Company's retirement income, supplemental
executive retirement and other benefit plans
applicable to the Executive and/or the
Executive's dependents and beneficiaries
immediately prior to the Termination Date.
(b) If this Agreement is terminated during the Term by
the Company pursuant to Section 4(a)(ii) hereof or if
this Agreement is terminated during the Term by the
Executive for any reason other than pursuant to
Section 4(b) hereof, the Executive will forfeit any
right to receive
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any unpaid Incentive Pay. If this Agreement is
terminated during the Term (i) by the Company as a
result of the death of the Executive or (ii) by the
Executive for any reason other than pursuant to
Section 4(b) hereof, the Executive will forfeit any
right to receive any unpaid Annual Bonus.
(c) Upon written notice given by the Executive to the
Company prior to the receipt of any payment pursuant
to Section 5(a) hereof, the Executive, at the
Executive's sole option, without adjustment to
reflect the present value of such amounts as
aforesaid, may elect to have all or any of the
Severance Payment payable pursuant to Section 5(a)(i)
hereof paid to the Executive on a quarterly or
monthly basis during the remainder of the Term.
(d) There shall be no right of set-off or counterclaim in
respect of any claim, debt or obligation against any
payment to or benefit (including Employee Benefits)
of the Executive provided for in this Agreement.
(e) Without limiting the rights of the Executive at law
or in equity, if the Company fails to make any
payment required to be made hereunder on a timely
basis, the Company shall pay interest on the amount
thereof at an annualized rate of interest equal to
the then-applicable Discount Rate (as hereinafter
defined) or, if lesser, the highest rate allowed by
applicable usury laws. As used herein, the term
"Discount Rate" will be deemed to mean the discount
rate required to be utilized for purposes of
computations under Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), or any
successor provision thereto, or if no such rate is so
required to be used, a rate equal to the
then-applicable interest rate prescribed by the Code
for benefit valuations in connection with
non-multiemployer pension plan terminations assuming
the immediate commencement of benefit payments.
6. No Mitigation Obligation. The parties hereto expressly agree
that the payment of the severance compensation by the Company to the Executive
in accordance with the terms of this Agreement will be liquidated damages, and
that the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
the Executive hereunder or otherwise.
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7. Legal Fees and Expenses. It is the intent of the Company that
subsequent to the occurrence of a Change in Control, the Executive not be
required to incur the expenses associated with the enforcement of the
Executive's rights under this Agreement by litigation or other legal action
because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Executive hereunder. Accordingly, if it
should appear to the Executive that the Company has, subsequent to the
occurrence of a Change in Control, failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other person takes
any action, subsequent to the occurrence of a Change in Control, to declare this
Agreement void or unenforceable, or institutes any litigation designed to deny,
or to recover from, the Executive the benefits intended to be provided to the
Executive hereunder, the Company irrevocably authorizes the Executive from time
to time to retain counsel of the Executive's choice, at the expense of the
Company as hereafter provided, to represent the Executive in connection with the
litigation or defense of any litigation or other legal action, whether by or
against the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Company and such counsel, the
Company irrevocably consents to the Executive's entering into an attorney-client
relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel. The Company shall pay or cause to be paid and shall
be solely responsible for any and all reasonable attorneys' and related fees and
expenses incurred by the Executive as a result of the Company's failure to
perform this Agreement or any provision thereof or as a result of the Company or
any person contesting the validity or enforceability of this Agreement or any
provision thereof as aforesaid.
8. Withholding of Taxes. The Company may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes as
shall be required pursuant to any law or government regulation or ruling.
9. Successors and Binding Agreement.
(a) The Company shall require any successor (whether
direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or
substantially all of the business and/or assets of
the Company, to expressly assume and agree to perform
this Agreement in the same manner and to the same
extent the Company would be required to perform if no
such succession had taken place. This Agreement shall
be binding upon and inure to the benefit of the
Company and any successor to the Company, including
without limitation any
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persons acquiring directly or indirectly all or
substantially all of the business and/or assets of
the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such
successor shall thereafter be deemed the "Company"
for the purposes of this Agreement). This Agreement
shall not otherwise be assignable, transferable or
delegable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal
representatives, executors, administrators,
successors, heirs, distributees and/or legatees.
(c) This Agreement is personal in nature and neither of
the parties hereto shall, without the consent of the
other, assign, transfer or delegate this Agreement or
any rights or obligations hereunder except as
expressly provided in Section 9(a) hereof. Without
limiting the generality of the foregoing, the
Executive's right to receive payments hereunder shall
not be assignable, transferable or delegable, whether
by pledge, creation of a security interest or
otherwise, other than by a transfer by the
Executive's will or by the laws of descent and
distribution and, in the event of any attempted
assignment or transfer contrary to this Section 9(c),
the Company shall have no liability to pay any amount
so attempted to be assigned, transferred or
delegated.
(d) The Company and the Executive recognize that each
Party will have no adequate remedy at law for breach
by the other of any of the agreements contained
herein and, in the event of any such breach, the
Company and the Executive hereby agree and consent
that the other shall be entitled to a decree of
specific performance, mandamus or other appropriate
remedy to enforce performance of this Agreement.
10. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (EXCLUSIVE OF
CONFLICTS OF LAW PRINCIPLES) AND THE LAWS OF THE UNITED STATES OF AMERICA AND
WILL, TO THE MAXIMUM EXTENT PRACTICABLE, BE DEEMED TO CALL FOR PERFORMANCE IN
DALLAS COUNTY, TEXAS. COURTS WITHIN THE STATE OF TEXAS WILL HAVE JURISDICTION
OVER ANY AND ALL DISPUTES BETWEEN THE PARTIES HERETO, WHETHER IN LAW OR EQUITY,
ARISING OUT OF OR RELATING TO THIS AGREEMENT. THE PARTIES CONSENT
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TO AND AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS. VENUE IN ANY SUCH
DISPUTE, WHETHER IN FEDERAL OR STATE COURT, WILL BE LAID IN DALLAS COUNTY,
TEXAS. EACH OF THE PARTIES HEREBY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH
DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (i)
SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (ii)
SUCH PARTY AND SUCH PARTY'S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY
SUCH COURTS OR (iii) ANY LITIGATION COMMENCED IN SUCH COURTS IS BROUGHT IN AN
INCONVENIENT FORUM.
11. Notices. All notices, demands, requests or other
communications that may be or are required to be given, served or sent by either
party to the other party pursuant to this Agreement will be in writing and will
be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery, telegram or
facsimile transmission addressed as follows:
(a) If to the Executive: 0000 Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile Transmission No.: (000) 000-0000
Attn: Xxxx X. Xxxxxxx
with a copy (which will
not constitute notice) to: Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile Transmission No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx, Xx., Esq.
(b) If to the Company: WebLink Wireless, Inc.
0000 Xxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Facsimile Transmission No.: (000) 000-0000
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Attn: General Counsel
with a copy (which will
not constitute notice) to: Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Transmission No.: (000) 000-0000
Attn: Xxxxxx Xxxxx
Either party may designate by written notice a new address to which any notice,
demand, request or communication may thereafter be given, served or sent. Each
notice, demand, request or communication that is mailed, delivered or
transmitted in the manner described above will be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee with the return receipt, the delivery receipt, the affidavit of
messenger or (with respect to a facsimile transmission) the answer back being
deemed conclusive evidence of such delivery or at such time as delivery is
refused by the addressee upon presentation.
12. Gender. Words of any gender used in this Agreement will be
held and construed to include any other gender, and words in the singular number
will be held to include the plural, unless the context otherwise requires.
13. Amendment. This Agreement may not be amended or supplemented
except pursuant to a written instrument signed by the party against whom such
amendment or supplement is to be enforced. Nothing contained in this Agreement
will be deemed to create any agency, joint venture, partnership or similar
relationship between the parties to this Agreement. Nothing contained in this
Agreement will be deemed to authorize either party to this Agreement to bind or
obligate the other party.
14. Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be deemed to be an original and all of which
will be deemed to be a single agreement. This Agreement will be considered fully
executed when all parties have executed an identical counterpart,
notwithstanding that all signatures may not appear on the same counterpart.
15. Severability. If any of the provisions of this Agreement are
determined to be invalid or unenforceable, such invalidity or unenforceability
will not invalidate or render unenforceable the remainder of this Agreement, but
rather the entire Agreement will be construed as if not containing the
particular invalid or unenforceable provision or provisions, and the rights and
obligations of the parties will be construed and enforced accordingly. The
parties acknowledge that if any provision of this Agreement is determined
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to be invalid or unenforceable, it is their desire and intention that such
provision be reformed and construed in such manner that it will, to the maximum
extent practicable, be deemed to be valid and enforceable.
16. Third Parties. Except as expressly set forth or referred to in
this Agreement, nothing in this Agreement is intended or will be construed to
confer upon or give to any party other than the parties to this Agreement and
their successors and permitted assigns, if any, any rights or remedies under or
by reason of this Agreement.
17. Waiver. No failure or delay in exercising any right hereunder
will operate as a waiver thereof, nor will any single or partial exercise
thereof preclude any other or further exercise or the exercise of any other
right.
18. Prior Agreements. This Agreement and the agreements,
instruments and documents contemplated by this Agreement, including, without
limitation, that certain Confidentiality and Noncompetition Agreement, dated
June 6, 1997, by and between the Executive and the Company, represent the
parties' entire agreement with respect to the subject matter of this Agreement
and such other agreements, instruments and documents and supersede and replace
any prior agreement or understanding with respect to that subject matter. This
Agreement may not be amended or supplemented except pursuant to a written
instrument signed by the party against whom such amendment or supplement is to
be enforced. Except as expressly set forth in this Agreement (e.g., Section
19(a), etc.), awards under benefit plans (e.g., stock option awards, restricted
stock grants, phantom stock awards, etc.) are not within the scope of this
Agreement and will not be governed by or affected by this Agreement.
19. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined
that any payment or distribution by the Company (or
any affiliate, stockholder, or subsidiary thereof or
any plan or program of the Company or any affiliate,
stockholder, or subsidiary thereof) to the Executive
(whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement
or otherwise, but determined without regard to any
additional payments required under this Section 19)
(a "Payment") is subject or will cause the Executive
to be subject to the excise tax imposed by Section
4999 of the Code (or any successor provision) (i.e.,
while the Executive is considered a "disqualified
individual" as such term is defined in Section 280G
of the Code and the regulations promulgated
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thereunder), or any interest or penalties are
incurred by 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 (a "Gross-Up
Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or
penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and
any interest and penalties imposed with respect
thereto) and Excise Taxes 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) Subject to the provisions of Section 19(c), all
determinations required to be made under this Section
19, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such
determination, shall be made by the Company's public
accounting firm (the "Accounting Firm") which shall
provide detailed supporting calculations both to the
Company and the Executive as soon as possible
following a request made by the Executive or the
Company. In the event that the Accounting Firm is
serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the
Company shall appoint another nationally recognized
public accounting firm to make the determinations
required hereunder (which accounting firm shall then
be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be
borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 19, shall be paid
by the Company to the Executive within five (5) days
of 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 that
failure to report the Excise Tax on the Executive's
applicable federal income tax return would not result
in the imposition of a negligence or similar penalty.
Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a
result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have
been made by the Company should have been made
("Underpayment"), consistent with the calculations
required to
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be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 19(c) and
the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the
Executive.
(c) The Executive shall notify the Company in writing of
any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company
of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten
(10) business days after the Executive is informed in
writing of such claim and shall apprise the Company
of the nature of such claim and the date on which
such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of
the 30-day period following the date on which the
Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to
the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such
claim,
(ii) take such action in connection with
contesting such claim as the Company shall
reasonably request in writing from time to
time, including, without limitation,
accepting legal representation with respect
to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate with the Company in good faith to
effectively contest such claim,
(iv) and permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and
pay directly all costs and expenses (including
additional interest and penalties) incurred in
connection with such contest and shall indemnify and
hold the Executive harmless, on a "grossed up,"
after-tax basis, for any
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Excise Tax or any income or other tax (including
interest and penalties with respect thereto) imposed
as a result of such representation and payment of
costs and expenses. Without limitation on the
foregoing provisions of this Section 19(c), the
Company shall control all proceedings taken in
connection with such contest and, at its sole option,
may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and
may, at its sole option, either direct the Executive
to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine;
provided further, that if the Company directs the
Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to
the Executive on an interest-free basis and shall
indemnify and hold the Executive harmless, on a
"grossed up," after-tax basis, from any Excise Tax or
any income or other tax (including interest or
penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income
with respect to such advance; and provided further,
that any extension of the statute of limitations
relating to payment of taxes for the taxable year of
the Executive with respect to which such contested
amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control
of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to
settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any
other taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 19(c),
the Executive becomes entitled to receive, and
receives, any refund with respect to such claim, the
Executive shall (subject to the Company's complying
with the requirements of Section 19(c)) promptly pay
to the Company the amount of such refund (together
with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by
the Executive of any amount advanced by the Company
pursuant to Section 19(c), a determination is made
that the Executive shall not be entitled to any
refund with respect to such claim and the Company
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does not notify the Executive in writing of its
intent to contest such denial of refund prior to the
expiration of thirty (30) days after such
determination, then such advance shall be forgiven
and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
20. Forgiveness of Indebtedness; Interest Moratorium. The Company
agrees that the obligations of the Executive to pay principal and/or interest
with respect to that certain Fixed Rate Promissory Note, dated January 28, 1994,
made payable by the Executive to the Company in the original principal amount of
Ninety-Seven Thousand Eight Hundred and 00/100 Dollars ($97,800.00), that
certain Fixed Rate Promissory Note, dated September 22, 1997, made payable by
the Executive to the Company in the original principal amount of Sixteen
Thousand Three Hundred and 00/100 Dollars ($16,300.00) and that certain Fixed
Rate Promissory Note, dated January 14, 1998, made payable by the Executive to
the Company in the original principal amount of Forty-Eight Thousand Nine
Hundred and 00/100 Dollars ($48,900.00) as such notes have been previously or
may be hereafter renewed, extended or modified (hereinafter collectively
referred to as the "Notes") are suspended (although interest will continue to
accrue) until the close of business on January 3, 2001 and; provided the
Executive has not terminated this Agreement during the Term other than pursuant
to Section 4(b) and the Company has not terminated this Agreement pursuant to
Section 4(a)(ii), the such obligations will terminate on the close of business
on January 3, 2001. At such time, if the Company has not previously terminated
this Agreement pursuant to Section 4(a)(ii), the Company will xxxx such Notes
"paid in full" and will deliver such Notes to the Executive.
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21. No Retroactive Recovery of Compensation. The Company hereby
waives any right to seek recovery of any payment or other benefit paid or
provided to the Executive pursuant to this Agreement subsequent to the payment
or delivery thereof.
22. Assistance with Transition. In the event the Executive elects
not to renew this Agreement, the Executive agrees to use reasonable efforts to
assist the Company in retaining a successor for the Executive and in exchange
for such assistance, the Board may, in its sole discretion, elect to accelerate
the vesting of any option, restricted stock, phantom stock, stock appreciation
or similar award made to the Executive. The Company acknowledges and agrees that
the failure of the Executive to comply with the provisions of this Section 22
will not give rise to any remedy on behalf of the Company (including, without
limitation, any right to terminate this Agreement or any other agreement between
the Company and the Executive or any right to equitable relief) or subject the
Executive to any liability (including, without limitation, damages, whether
sought in an action at law or in equity and whether or not sought in an action
in contract, in tort or otherwise).
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
COMPANY
WEBLINK WIRELESS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
---------------------------------------
Name:
-------------------------------
Title: VP
-------------------------------
EXECUTIVE:
/s/ Xxxx X. Xxxxxxx
-------------------------------------------
Xxxx X. Xxxxxxx
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