CONSULTING AGREEMENT AND AGREEMENT NOT TO COMPETE
This Consulting Agreement and Agreement Not to Compete ("Agreement") is
made this 15th day of August, 1998, by and between Xxxxxx Communications
Corporation, an Oklahoma corporation ("Company") and Xxxxxxx Xxxxxx
("Consultant").
EXPLANATORY STATEMENT
A. As of the date hereof, Company is the holding company for certain
other affiliated companies, which companies, together with other companies and
partnerships presently owned, managed or controlled directly or indirectly by
the Company, or which may be owned, managed or controlled or acquired by the
Company, directly or indirectly, at any time in the future, during the term of
the Agreement, shall be referred to collectively herein as the "Affiliates".
References herein to "Company" shall likewise be construed as referring to the
Affiliates as well, unless expressly set forth to the contrary.
B. As of the date hereof, the Consultant is an employee of the Company
and a Director on its board of Directors and in his capacity as such, has
developed substantial expertise and knowledge about the telecommunications
industry and more particularly the business of the Company, and its existing
Affiliates, which is focused primarily on telephone services, fiber-optic
communications, and cellular telephone services, referred to collectively herein
as the "Business". By this Agreement, Company seeks to secure the benefit of
consultant's knowledge and expertise for the remainder of his active working
career, to the exclusion of any competing companies engaged in this same or
similar Business.
C. The Company, recognizing the value of the Consultant's knowledge and
expertise with respect to the Business, desires to retain the Consultant in
order for the Consultant to continue to use his knowledge and expertise in the
Business for the benefit of the Company, present and future, and to render any
other and further services provided for by this Agreement, and the Consultant
further services provided for by this Agreement, and the Consultant desires to
accept this appointment with the Company, and in accordance with the terms of
this Agreement. Further, the Company seeks to prevent Consultant from rendering
services to other parties or entities who may compete for some or all of the
Business of Company.
D. In conjunction with the execution of this Agreement, the Board of
Directors of the Company has executed a corporate resolution authorizing and
directing the Company to enter into this Agreement with Consultant, for the
mutual benefit of all concerned, a copy of same being attached hereto.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties agree as follows:
1. RETENTION. The Company hereby employs the Consultant to serve as a
consultant to the Company. Consultant shall provide leadership, guidance, and
expertise to the Company and shall use his best efforts to promote the interests
of the Company. The Consultant hereby accepts such appointment with the Company
and agrees to render the services for and on behalf of the Company on the terms
and conditions set forth in this Agreement.
2. TERM. The term ("Term") of this Agreement shall commence on September
1, 1998, and subject to the further provisions of this Agreement, the Agreement
shall terminate on August 31, 2008, unless sooner terminated in accordance with
Section 11 of this Agreement.
3. PERFORMANCE OF SERVICES. The Consultant shall render the Services to
the best of his ability for and on behalf of the Company. The Consultant shall
comply with all Laws relating to the Services. During the Term of this
Agreement, the Consultant shall not, at any time or place, directly or
indirectly, engage in any business activity in competition with the Business of
the Company for the benefit of or on account of the Consultant, or for the
benefit of or on account of any other person or entity other than to the extent
required or permitted by the terms and conditions of this Agreement. The power
to direct the Services to be performed shall be exercised by the Board of
Directors (herein "Board"); provided, that the Board shall not impose duties or
constraints of any kind which require the Consultant to violate any law,
statute, ordinance, rule or regulation ("Laws") now or hereinafter in effect, or
to otherwise engage in any act or omission deemed to be against public policy.
4. EXTENT OF SERVICES. The Consultant shall devote such time as
requested by the Board to the performance of his duties under this Agreement,
and as shall be agreed to by the Consultant at such times during such days as
shall be reasonable for the benefit of the Company. The Consultant may be
employed or engaged in other businesses or vocations, provided such employment
or engagement shall not be in breach or violation of or in default under any or
all of the provisions of this Agreement. Notwithstanding any other provisions of
this Agreement, nothing in this Agreement shall prevent or prohibit Consultant
from owning up to 5% of the outstanding stock or other securities in other
entities, even if such entities shall be in competition with Company or any of
its Affiliates.
4.1 DESCRIPTION OF DUTIES. Consultant shall preform those duties
consistent with the responsibility of a former Chief Executive Officer of the
Company directed by the Board. It is contemplated that Consultant's duties shall
be consistent with the experience and maturity of the Consultant. Generally, it
is recognized that the Consultant's duties are of a special and unusual
character, such as the development of goodwill for the Company.
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4.2 POSITION IN COMPANY. As a Consultant to the Company, it is
recognized that Consultant is not an employee of the Company, and, subject to
the terms of this Agreement, is to be supervised only by the Board.
5. COMPENSATION AND INSURANCE COVERAGE.
5.1 COMPENSATION. The Company shall pay to the Consultant a monthly
payment of Fifteen Thousand Dollars ($15,000.00) payable on the first day of
each month during the term of this Agreement for One Hundred and Twenty (120)
consecutive monthly payments.
5.2 INSURANCE. Commencing as of the effective date of this Agreement
(unless specifically otherwise indicated), Company shall provide Consultant, in
addition to compensation, health, medical, hospital and dental insurance under
any and all Company policies provided to an employee of the Company.
6.0 WORK RELATED BENEFITS DURING ACTIVE EMPLOYMENT. During the Term of
this Agreement, Consultant shall enjoy any and all other work related benefits
of other employees, as well as such other and additional benefits as may, from
time to time, be authorized, approved or allowed by the Board, as well as the
following benefits:
(a) Consultant shall have a fully furnished office at the corporate
headquarters of Company, fully furnished and designed in a manner befitting the
position of the Company's former Chief Executive Officer;
(b) Consultant shall have his own administrative assistant on an as
needed basis, who Consultant may, at his option select;
(c) Consultant shall be permitted to attend any and all seminars of
Consultant's choosing whenever they may occur and wherever located, at the
Company's expense recognizing that Company shall benefit from same; and
(d) Consultant shall be paid or reimbursed for any and all travel and
other expenses incurred by him incident to the rendering of services by him,
recognizing that in rendering services for the Company, such expenses are likely
to include sums expended in the entertainment of individuals and representatives
of firms with whom or which the Company has or is attempting to develop business
relations.
7. COMPANY'S RIGHT TO REDEEM. Company retains the right during the term
of this Agreement to at any time pre-pay any sums payable pursuant to Section
5.1 of this Agreement to Consultant, whereupon all other provisions of this
Agreement are
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thereupon terminated, except the provisions of paragraphs 8 and 9 shall
remain in effect for the remaining period of the initial ten (10) year period.
8. CONFIDENTIAL INFORMATION. The Consultant acknowledges that by virtue
of his past involvement with and experiences with Company, the Consultant has
had access to, has acquired, and has assisted in developing the confidential and
proprietary information of the Company, which is of a special and unique nature
and value relating to the Business of the Company, including, without limitation
information about the Business operations, internal structure, financial
affairs, programs, software, systems, procedures, manual, confidential reports,
list of customers, clients and prospective customers, all sales and marketing
methods, as well as the amounts, nature and types of services, inventory,
equipment and methods preferred by the customers of the Company, and the fees
paid by such Customers, all of which shall be deemed to be confidential
information. As a Consultant of the Company, the Consultant will continue to
have access to, acquire and assist in developing confidential and proprietary
information relating to the Business and operations of the Company. The
Consultant acknowledges that such confidential and proprietary information has
been and will continue to be of central importance to the Business of the
Company, and that disclosure of it to or its use by others could cause
substantial loss to the Company. Such confidential and proprietary information,
having been developed by the Consultant for the exclusive benefit of the
Company, was and is the confidential and proprietary asset of the Company.
Accordingly, the Consultant agrees as follows:
8.1 NON-DISCLOSURE. During the Term of this Agreement, and after
leaving the Company as a Consultant, the Consultant shall not, for any reason or
purpose whatsoever, directly or indirectly deliberately divulge or disclose to
any person or entity any confidential or proprietary information of the Company
which was obtained by the Consultant as a result of the Consultant's involvement
with the Company, but shall hold all of the same confidential and inviolate.
For purposes of this Agreement, "confidential or proprietary information" means
information, whether written or otherwise, which has a Business purpose, and is
not known or generally available from sources outside the Company or typical of
industry practice, including, without limitation, the nature of the conduct of
the Business of the Company or any of its Affiliates, or their respective
business operations; the financial affairs, programs, software, systems,
procedures, manuals, confidential reports, sales and marketing methods of the
Company or any of its Affiliates; the amount, nature and type of services,
inventory, equipment and methods used and preferred by the Company or any of its
Affiliates, and confidential techniques of the Company, or any of its
Affiliates; confidential pricing data respecting products sold by the Company or
any of its Affiliates
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for their respective own accounts, or as agents or representatives of others;
the identity of the present and prospective customers and customers list of
the Company, or any of its Affiliates; the confidential data of the Company
or any of its Affiliates, relating to customer purchases, practices and
procedures; the business arrangements, costs, sources of supply of the
Company or any of its Affiliates; and information regarding earnings,
forecasts, reports, technical data and marketing of the Company and/or any of
its Affiliates.
8.2 RETURN OF RECORDS. All contracts, agreements, financial books,
records, instruments and documents, customer lists, memoranda, data, reports,
programs, software, tapes, letters, research, card decks, listing, programming
and other instruments, records or documents relating to or pertaining to
customers serviced by the Consultant or any of its Affiliates, the Services
rendered by the Consultant and/or the Business of the Company or any of its
Affiliates (collectively the "Records") shall at all times be and remain the
property of the Company. Upon termination of this Agreement, for any reason
whatsoever, the Consultant shall return to the Company all Records (whether
furnished by the Company or prepared by the Consultant) and the Consultant shall
neither make nor retain any copies of any such Records after such termination.
9. RESTRICTIVE COVENANTS.
9.1 ACTIVITIES RESTRICTED. The Company and the Consultant
acknowledge that (a) the Consultant's services are of a special and unusual
character which have a unique value to the Company, the loss of which cannot be
adequately compensated by damages in an action at law, and if used in
competition with the Company could do serious harm to the Company; (b) an
important part of Consultant's duties will be to develop goodwill for the
Company through his personal contacts with customers, agents and other having
business relationships with the Company; and (c) there is a danger that his
goodwill, a proprietary asset of the Company, may follow the Consultant if and
when his relationship with the Company is terminated. Accordingly, for the term
of this Agreement, the Consultant shall not, without the prior written consent
of the Company, directly or indirectly, either individually, or as owner,
partner, agent, employee, officer, director, independent contractor, consultant
or otherwise:
(a) Offer to render any services or solicit the rendition of any
services which were rendered by or to the Company during the two-year period
immediately preceding the cessation of Consultant's active employment with the
Company to any clients, customers, or accounts of the Company with whom the
Consultant had direct contact and/or to whom the Consultant rendered any
services at any time during such two-year period to or for the benefit or
account of the Consultant or to or for the benefit or account of
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any other person or entity, except to the extent authorized or permitted
under this Agreement;
(b) Render or attempt to render any services which were rendered
by the Company, or sell or attempt to sell any services which were sold by the
Company during the two-year period immediately preceding such cessation of
Consultant's active employment with the Company to any clients, customers or
accounts of the Company with whom the Consultant had direct contact and/or to
whom the Consultant rendered any services or sold any services at any time
during such two-year period to or for the benefit or account of the Consultant
or to or for the benefit or account of any other person or entity, except to the
extent authorized or permitted under this Agreement; and
(c) Engage, either individually, or as owner, partner, agent,
employee, officer, director, independent contractor, consultant or otherwise, in
any business which sells any of the telephone, telecommunications or cellular
telephone services, equipment, rights, permits, or other assets of the Company,
or otherwise competes with the Company in any state in which the Company or any
of its Affiliates offered such services or assets for sale or use by their
customers during the two-year period immediately preceding such cessation of the
Consultant's active employment with the Company, except as specifically
authorized or permitted by this Agreement.
9.2 COMPENSATION FOR NON-COMPETE PROVISION. It is specifically
recognized by Consultant and Company that an integral part of this Agreement is
for Consultant not to compete with the Company and it is specifically recognized
by both parties to this Agreement that the compensation and benefits provided
herein are in recognition of Consultant not competing with Company.
9.3 PREPAYMENT OF NON-COMPETE PAYMENT. At any time after the second
year of this Agreement, either the Company or Consultant may elect to accept
prepayment of all sums due under this Agreement and terminate his further
association with the Company, subject to the terms of this Agreement. In the
event of the election of either party to this Agreement to accept prepayment of
all sums due under the Agreement, such notice shall be given in writing by the
notifying party to the other party, specifying the date of the election to
exercise this provision of this Agreement. Such notice shall not be less than
ninety (90) days from the date of the Notice. Upon the election, Company shall
pay the remaining sums due for the remaining term of this Agreement as provided
in Section 5.1 off this Agreement; at the time of that payment, all other
benefits under this Agreement due by the Company to the Consultant shall
terminate.
9.4 MODIFICATION. To the extent that any provision or portion of
Section 9 of this Agreement shall be held, found or
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deemed to be unreasonable, unlawful, unenforceable by a Court of competent
jurisdiction, or an unreasonable restraint of trade, then any such provision
or portion thereof shall be deemed to be modified to the extent necessary in
order that such provision or portions thereof shall be legally enforceable to
the fullest extent permitted by applicable law; any Court of competent
jurisdiction shall, and the parties hereto do hereby expressly authorize,
request and empower any Court of competent jurisdiction to enforce any such
provision or portion thereof, or to modify any such provision or portion
thereof in order that any such provision or portion thereof shall be enforced
by such Court to the fullest extent permitted by applicable law.
10. DEATH OR DISABILITY OF CONSULTANT. Upon either the death or
disability (as defined herein) of the Consultant, the sums remaining to be paid
under Section 5.1 of this Agreement shall become immediately due and payable to
the Consultant or the estate of the Consultant, as the case may be.
11. TERMINATION OF CONSULTANT.
11.1 TERMINATION OF CONSULTANT FOR CAUSE. The Company shall have the
right to terminate the Consultant at any time for Good Cause, and subject to the
following limitations and restrictions;
(a) Consultant may be terminated only for Good Cause, as
determined by a vote of 66 2/3% percent of the Board of Directors of the
Company, and only after the Board has, in writing, notified Consultant of the
breach or failure on the part of the Consultant, and provided Consultant with a
reasonable time, but no less that thirty (30) days, to cure the specified breach
or failure and Consultant has failed to so cure.
(b) For the purposes of this Agreement, "Good Cause" shall mean
that the Consultant either (i) committed a material breach of any covenant,
promise, or other obligation under this Agreement, which has not been cured or
(ii) engaged in deliberate acts of intentional, wanton or malicious conduct by
the consultant, or fraud or misappropriation by the Consultant.
In the event Consultant is terminated for Good Cause as provided
herein, the Company shall at that time pay Consultant the remaining sums
scheduled as future payments as set out in Section 5.1 of this Agreement.
12. NOTICES. All notices, requests, demands, consents, and other
communications which are required or may be given under this Agreement
(collectively the "Notices") shall be in writing and shall be given by one of
the following means: By personal delivery against a receipted copy, by telefax,
overnight courier, or by
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United States certified mail, return receipt requested, postage prepaid and
addressed to the other party at the following address:
if the Company:
Xxxxxxx Xxxxxx, President
Xxxxxx Communications Corporation
00000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
If the Consultant:
Xxxxxxx Xxxxxx
00000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
and
Xxxxxxx Xxxxxx
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Any party may, from time to time, change the address to which Notices
to it are to be sent by giving such notice of such change to the other parties
in the manner set forth herein. Notices shall be deemed given and received on
the next business day following the day such Notice is mailed or sent by
overnight courier in the manner described above, or, if personally delivered or
if sent by telefax or telegram, on the date so delivered or sent. Any time
period shall commence on the day such Notice is deemed given and received. For
purposes of this Agreement, the Term "Business Day" shall include all days other
than Saturdays, Sundays and Federal Banking holidays.
13. GENERAL.
13.1 BINDING EFFECT. This Agreement shall be binding upon and enure
to the benefit of the Company, and any of its Affiliates, or the successors and
assigns of the Company or any of its Affiliates. This Agreement shall be
binding upon the Consultant and his heirs, personal and legal representatives,
and guardians, and shall enure to the benefit of the Consultant, and where
appropriate, to the benefit of the spouse of Consultant. Neither this Agreement
nor any part hereof or interest shall be assigned by the Company or the
Consultant.
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13.2 AMENDMENTS. The Terms and provisions of this Agreement may
not be amended except by written instrument duly executed by each party
hereto.
13.3 REORGANIZATION. Neither the Company, nor any of its Affiliates,
shall merge or consolidate with any other corporation or entity, or reorganize,
unless and until such succeeding or continuing corporation or entity agrees to
assume and discharge the obligations of the Company under this Agreement. Upon
the occurrence of such an event, the term "Company" as used in this Agreement
shall be deemed to refer to such successor or survivor entity.
13.4 STATUTORY CONSTRUCTION. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Oklahoma.
The use of any gender herein shall be deemed to be or include the other genders
and the neuter and the use of the singular herein shall be deemed to be and
include the plural (and vise versa) wherever appropriate. The Section and other
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
13.5 COMPLETE AGREEMENT. This Agreement sets forth the entire,
integrated understanding and the agreement of the parties hereto with respect to
the subject matter hereof.
13.6 REMEDIES. in the event of a breach of this Agreement, the
non-breaching party hereto may maintain an action for specific performance
against the party hereto who has alleged to have breached any of the terms,
conditions, representations, warranties or agreements herein contained.
Notwithstanding anything contained herein to the contrary, this Section shall
not be construed to limit in any manner other rights or remedies any grieved
party may have by virtue of any breach of this Agreement. Further, in the
event any Affiliate has assumed any obligations which enure to the benefit of
Consultant under this Agreement, or assume any other obligations of Company
under this Agreement, Consultant may, at his ,option, pursue any and all
legal remedies he may have against the Company, the Affiliate who has assumed
or agreed to be obligated on such obligation, or both, jointly and severely,
for such obligations.
13.7 WAIVER. Each of the parties hereto shall have the right to waive
compliance with or the fulfillment, satisfaction or enforcement of any warranty,
representation, covenant, promise, agreement or condition herein set forth, but
the waiver by any party of such right shall not be deemed a waiver of compliance
with or fulfillment, satisfaction or enforcement of any other warranty,
representation, covenant, promise, agreement or condition herein set forth or to
seek any redress for any breach thereof on any
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subsequent occasion, nor shall any such waiver be deemed effective unless in
writing and signed by the parties so waiving.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first set forth above.
"COMPANY"
XXXXXX COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
President
"CONSULTANT"
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
XXXXXXX XXXXXX
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ADDENDUM TO CONSULTING AGREEMENT
This Amendment to Consulting Agreement is made this 1st day of October, 1998,
to that certain Consulting Agreement and Agreement Not to Compete
("Agreement"), dated August 15, 1998, between Xxxxxx Communications
Corporation ("Company") and Xxxxxxx Xxxxxx ("Consultant").
Company and Consultant wish to define the responsibilities and obligations of
the parties to this Agreement in a matter to clearly state the areas of
expertise that Consultant is to provide to Company.
It is therefore agreed that Consultant shall devote the time designated by
the Chief Executive Officer of Company to represent Company at various
functions, including trade shows and seminars; assist with regulatory
matters, including appearance where required before regulatory bodies;
analyze technical and financial data to assist executive officers of the
Company in strategic planning and forecasting. It is acknowledged that the
defining of specific responsibilities is not intended to limit the activities
of the Consultant, but is intended to clarify specific duties that can now be
identified as requiring Consultant's efforts.
It is further agreed between Company and Consultant that an integral part of
this Agreement is for Consultant not to compete with the Company, and it is
specifically recognized by both parties to this Agreement that a portion of
the compensation and benefits provided herein are in recognition of
Consultant not competing with Company.
During the term of this Agreement, Consultant agrees that on a monthly basis,
he will provide his views on trends in the telecommunications industry to
management of the Company, and to make himself available to provide
information to the Company about telecommunications issues that he has
gleaned from various sources in the industry.
The Consulting Agreement survives change in control of the Company or a
change in the Chief Executive Officer of the Company. However, the terms of
the Consulting Agreement can be renegotiated at the option of the Consultant.
This Amendment is done pursuant to Section 13.2 of the Agreement and is
intended to be effective the date hereof.
"COMPANY"
XXXXXX COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
President
"CONSULTANT"
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
XXXXXXX XXXXXX
