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EXHIBIT 10.1
--CONFIDENTIAL--
AARO BROADBAND WIRELESS COMMUNICATIONS, INC.
CHANGE-IN-CONTROL
KEY EMPLOYEE AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into effective the date and
year last executed by a party hereto and is by and between Aaro Broadband
Wireless Communications, Inc., an Oklahoma Corporation (hereinafter referred to
as the "Company"), and the individual executing below as the Key Employee
(hereinafter referred to as the "Key Employee"), and is made in reference to the
following recitals of fact:
WHEREAS, the Company considers the maintenance of sound, management
practices and stable top management and key personnel to be essential in
protecting and enhancing the best interests of the Company and further
recognizes that the possibility of a change in control of the Company raises
uncertainty and questions among Key Employees and may result in the departure or
distraction of such Key Employees to the detriment of the Company and its
stockholders; and
WHEREAS, accordingly, the Board of Directors of the Company has
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of Key Employees to their assigned duties
without distraction in the face of the potentially disturbing circumstances
arising from the possibility of a change in control of the Company; and
WHEREAS, the Company and Key Employee desire to enter into this
agreement in order to (1) induce our Key Employees to remain in the employ of
the Company, (2) secure for the Company the benefits derived from the Key
Employee's employment, and (3) to maximize the Key Employees production efforts
during the period prior and subsequent to any "Change-in-Control" (as such term
is hereinafter defined) of the Company and to provide for certain contingencies
in the event of any Change-in-Control of the Company;
NOW, THEREFORE, in consideration of the foregoing:
1. GENERAL. This Agreement sets forth the terms and conditions for
qualification for severance "Benefits" (as hereinafter defined) which
the Company will provide to certain Key Employees in the event their
employment with the Company and/or its subsidiaries, if any, is
terminated under the circumstances, described herein, subsequent to a
Change-in-Control (as that term is defined below). The Key Employees
entitled to benefits under this Agreement are those Key Employees of
the Company or any of its subsidiaries so designated, from time to
time, by the Board of Directors of the Company as being covered by such
plan; provided, however, that any Key Employee so designated, from time
to time, by the Board of Directors of the Company as being covered by
such plan and so designated on the date of the Change-of-Control, shall
continue as such a Key Employee after the Change-in-Control. The
Company shall enter into this Agreement with each Key Employee so
designated.
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2. COMPANY'S RIGHT TO TERMINATE. No provision contained herein shall
affect the Company's ability to terminate the Key Employee's employment
at any time, with or without cause. Nothing in this Agreement shall, in
any way, require the Company to provide any Benefits prior to a
Change-in-Control; nor shall this Agreement ever be construed in any
way as establishing any policies or requirements for severance benefits
for any Key Employee who terminates employment with the Company prior
to a Change-in-Control. In addition, the Company shall have the right
to terminate or modify this Agreement at any time prior to a
Change-in-Control.
3. CHANGE-IN-CONTROL. Benefits provided herein shall be payable in the
event there shall have occurred a "Change-in-Control," as defined
below, and the Key Employee's employment by the Company shall
thereafter have been terminated as defined herein.
For the purpose of this agreement, a "Change-in-Control" of the Company
shall be deemed to have occurred if:
a. individuals who, on the date hereof, are members of the
Board of Directors of the Company (the "Board") cease for
any reason to constitute at least seventy-five percent (75%)
of the members of such Board, unless the election, or the
nomination for election by the Company stockholders, of each
new director was approved by a vote of at least 75% of the
members of such Board then still in office who were members
of such Board of the date hereof; or
b. after the date hereof, any "person" (as such term is used in
Sections 13(d) and 14(d) (2) of the Securities Exchange Act
of 1934 ("Exchange Act") becomes the "beneficial owner' (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing
twenty-five (25%) or more of the combined voting power of
the Company's then outstanding securities (such "Person"
hereafter referred to as a "Major Stockholder"); or
c. the stockholders of the Company shall approve a merger,
consolidation or dissolution or the sale, lease or exchange
of all or substantially all of the Company's assets.
4. TERMINATION FOLLOWING CHANGE-IN-CONTROL. In the event a
Change-in-Control shall have occurred, the Key Employee shall be
entitled to the benefits provided in Section 5 hereof upon any
termination of his employment within the twenty-four (24) month period
following such a Change-in-Control; EXCEPT, HOWEVER, a termination of
employment:
a. because of death or "Retirement" (as defined below); or
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b. by the Company for "Cause" or "Disability" (both as defined
hereinafter); or
c. by the Key Employee other than for "Good Reason" (as
hereinafter defined below):
(1) DISABILITY; RETIREMENT.
(a) Termination by the Company of a Key
Employee's employment based of "Disability"
shall mean termination because of his absence
from duties with the Company on a full-time
basis for one hundred eighty (180)
consecutive business days as a result of
incapacity due to physical or mental illness,
unless he shall have returned to the
full-time performance of his duties within
thirty (30) days after "Notice of
Termination" (as described in (4) below) is
given in connection with such absence.
(b) Termination of employment based on
"Retirement" shall mean the Key Employees
voluntary resignation in accordance with the
Company's retirement procedures generally
applicable to all employees, but shall not
include early retirement due to a special
incentive package.
(2) CAUSE.
Termination by the Company of a Key Employee's
employment for "Cause" shall mean termination within
the twenty-four (24) month period following a
Change-in-Control by reason of the willful and
continued failure by the Key Employee to
substantially perform his duties with the Company
(other than any such failure resulting from his
incapacity due to physical or mental illness) for a
period of thirty (30) or more days after a written
demand for substantial performance is delivered to
him by the Chief Executive Officer of the Company or
the Director of Human Resources, which demands
specifically identifies the manner in which such
officer or officers believe that the Key Employee
has not substantially performed his duties.
Notwithstanding the foregoing, the Key Employee
shall not be deemed to have been terminated for
cause unless and until there shall have been
delivered to the Key Employee, a copy of a Notice of
Termination from the Chief Executive Officer or
Director of Human Resources, after reasonable notice
to the
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Key Employee and an opportunity for him, together
with his counsel, to be heard before the Board of
Directors, finding that, in the good faith opinion
of the Board, he was guilty of conduct set forth
above in this subsection and specifying the
particulars thereof in detail.
(3) GOOD REASON.
Termination by the Key Employee of his employment for
"Good Reason" shall mean:
a. within the twenty-four (24) month period
following the Change-in-Control, if there has
occurred a reduction by the Company in his
base salary in effect immediately prior to
the Change-in-Control or as increased, from
time to time thereafter; or
b. within the twenty-four (24) month period
following a Change-in-Control, and without
the Key Employee's express written consent,
the relocation of the Key Employee's assigned
principal site of employment to a location
outside the metropolitan area of the city of
his principal site of employment on the date
of the Change-in-Control which reasonably
requires the Key Employee to move residences;
or
c. within the twenty-four (24) month period
following the Change-in-Control, if there has
occurred a failure by the Company to maintain
plans providing benefits to the Key Employee
at least as beneficial as those provided by
any benefit or compensation plan, stock grant
or option plan, life insurance plan, health
and accident plan or disability plan in which
the Key Employee is participating at the time
of the Change-in-Control or if the Company
has taken any action which would adversely
affect the Key Employee's participation in or
materially reduce the Key Employee's benefits
under any of such plans or deprive him of any
material fringe benefit enjoyed by him at the
time of the Change-in-Control, or if the
Company has failed to provide him with the
number of accrued paid vacation days to which
he would be entitled in accordance with the
Company's normal vacation policy in effect at
the time of the Change-in-Control; or
d. within the twenty-four (24) month period
following a Change-in-Control, if the Company
has reduced in any
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manner, the Key Employee's title, job
authorities or responsibilities existing
immediately prior to the Change-in-Control;
or
e. within the twenty-four (24) month period
following a Change-in-Control, if the Company
has failed to obtain the assumption of the
obligations contained in this Plan by any
successor as required under Section 7(a); or
f. within the twenty-four (24) month period
following a Change-in-Control, if there
occurs any purported termination of the Key
Employee's employment by the Company which is
not affected pursuant to a Notice of
Termination satisfying the requirements of
Section 4(c)(4) below; and, for purposes of
this Agreement, no such purported termination
shall be effective.
A termination of employment by the Key Employee within
the twenty-four (24) month period following a
Change-in-Control shall be for Good Reason if one of the
occurrences specified in this Section 4(c)(3) shall have
occurred, notwithstanding that the Key Employee may have
other justifiable reasons for terminating employment,
including the employment by another employer which the
Key Employee desires to accept.
(4) THE NOTICE OF TERMINATION.
Any purported termination of a Key Employee's
employment by the Company pursuant to this Agreement
shall be communicated by written notice of
termination to the Key Employee. For purposes of
this plan a "Notice of Termination" shall mean a
written notice which shall indicate the specific
termination provision in this Agreement relied upon
and shall set forth, in reasonable detail, the facts
and circumstances claimed to provide a basis for
termination of the Key Employee's employment under
the provision so indicated.
(5) DATE OF TERMINATION.
"Date of Termination" shall mean:
(a) if the Key Employee's employment is terminated
for Disability, thirty (30) days after a
Notice of Termination is given (provided that
the Key Employee shall not have
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returned to the performance of his duties on
full-time basis during such thirty (30) day
period);
(b) if the Key Employee's employment is terminated
pursuant to Section 4(c)(2) above for cause,
the date on which the Notice of Termination is
given;
(c) if the Key Employee's employment is terminated
by the Company for any other reason, the date
on which a Notice of Termination is given;
provided that if within thirty (30) days after
any Notice of Termination is given, the Key
Employee notifies the Company that a dispute
exists concerning the termination the date of
termination shall be the date on which the
dispute is finally settled, either by mutual
written agreement of the parties or by a final
judgment, order or decree of a court of
competent jurisdiction; and
(d) if the Key Employee terminates his employment
for Good Reason, the date on which the Company
receives notice from the Key Employee of such
termination.
5. BENEFITS UPON TERMINATION. If, within the twenty-four (24) month
period following a Change-in-Control, the Key Employee's employment by
the Company shall be terminated by the Company other than for Cause or
Disability or shall be terminated by the Key Employee for Good Reason
prior to Retirement, the Key Employee shall be entitled to his full
base salary through the Date of Termination to the extent not
theretofore paid, plus the Key Employee shall be entitled to the
"Benefits" provided below:
a. SPECIAL SEVERANCE PAY.
Employee shall be entitled to the sum of:
(1) an amount (discounted to present value on the basis
of a rate of 7.5% per annum) equal to the product of
his/her monthly base salary in effect at
termination, multiplied by thirty-six (36) months,
reduced by the number of whole months, if any, in
which the Key Employee was employed by the Company
in excess of twelve (12) months following a
Change-in-Control; plus
(2) an amount (discounted to present value on the basis
of a rate of 7.5% per annum) equal to the sum of the
total award of any annual incentive compensation or
bonus payment made to the Key Employee in respect of
his performance for the calendar year next preceding
the Change-in-Control plus any other performance
bonuses due to the Key Employee.
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x. XXXXXXXXX COMPENSATION UPON TERMINATION OF EMPLOYMENT. If the
Key Employee is entitled to compensation pursuant to Section 5
(a) above, the Company or it's successor shall pay such amount
to the Key Employee in a lump sum, in cash, on the fifth (5th)
day following the Date of Termination, provided, however, that
if the lump sum severance payment under this Section (5),
either alone or together with other payments which the Key
Employee has the right to receive from the Company or a
successor Company, would constitute a "parachute payment" (as
defined in Section 280G of the Internal Revenue Code of 1986,
as amended), such lump sum severance payment shall be reduced
to the largest amount that will not constitute a "parachute
payment."
c. INCENTIVE COMPENSATION PLANS. Notwithstanding anything to
the contrary contained in any stock agreement between the
Company and the Participant, the Key Employee shall be fully
vested as the Date of Termination in any and all stock grants
or stock options previously granted to Key Employee by the
Company.
d. BENEFIT PLANS. For a period of twenty-four (24) months
following the Key Employee's Date of Termination, reduced by
the number of whole months, if any, in which the Key Employee
was employed by the Company in excess of six (6) months
following a Change-in-Control, Key Employee, subject to the
"Cash-out Option" discussed below, shall be entitled to
continue to participate in the following benefit plans of the
Company. In addition, subject to applicable federal and state
statutes and regulations or in the case of their application,
as of his Date of Termination, the Key Employee shall become
fully vested in all respects in the following benefit plans:
(1) any life insurance, health insurance or dental
insurance plan.
(2) Savings plan; (e.g. Simplified XXX or 401K Plan)
(3) Any other benefit plans made generally available to
other Key Employee's comparable level or to
employees of the Company in general.
e. CLUB MEMBERSHIPS. The Company shall assign to the Key
Employee its interest in any club membership standing in the
name of the Key Employee. Any membership in any club in the
Company's name for the benefit of the Key Employee shall at
the option of the Key Employee, be transferred to the Key
Employee by the Company upon the Key Employee's payment of the
club's transfer fee.
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f. SPECIAL SUPPLEMENTAL BENEFIT PLAN. Notwithstanding anything
to the contrary contained in this Agreement or in any of the
Company's employee benefit plans, or in any federal, state or
local statute, rule or regulation governing such employee
benefit plans, if the Key Employee is not fully vested in any
of the benefit plans described herein or any other benefit
plans of the Company at the date of his termination, the
Company shall pay to the Key Employee amounts (hereinafter
called "Benefit Payment Equivalents") equal to the amounts
which would have been received by the Key Employee under all
benefit plans if the Key Employee had been fully vested
therein with such Benefit payment Equivalents to be payable at
the time benefits are otherwise payable under the Company's
present benefit plans (subject to the Cash-out Option
discussed below); provided, however, that any Benefit Payment
Equivalents shall be reduced to the extent, if any that the
Key Employee receives the payment of benefits under such
Company benefit plans.
g. CASH-OUT OPTION. In addition to the lump sum severance
payment discussed in Sections 5(a) and (b) above, the Key
Employee shall have the option to elect to receive a lump sum
cash equivalent (discounting to present value, on the basis of
a rate of 7.5% per annum, any sums not previously discounted
to present value hereunder) of all of the other benefits
listed in this Section 5. The Key Employee shall give written
notice to the Company of his election under this option, and
payment hereunder shall be made within thirty (30) days of
such election.
h. LEGAL EXPENSE. If any dispute should arise under this
agreement involving an effort by the Key Employee to protect,
enforce or secure rights or benefits claimed by the Key
Employee hereunder, the Company shall pay (promptly upon
demand by the Key Employee, accompanied by reasonable evidence
of incurrence) all reasonable expenses (including attorney's
fees) incurred by the Key Employee in connection with such
dispute.
i. INTEREST. The Key Employee shall be entitled to receive
interest on any amount payable under this plan from the date
such payment is due hereunder to the date paid at the rate of
the lesser of twenty percent (20%) per annum or the highest
rate legally permissible.
6. NO MITIGATION. The Key Employee shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking
other employment or otherwise and except as expressly set forth herein
no such other employment, if obtained, or compensation, or benefits
payable in connection therewith shall reduce any amounts or benefits to
which the Key Employee is entitled hereunder.
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7. SUCCESSORS; BINDING AGREEMENT. The Company may amend or terminate
this Agreement by action of its Board at any time prior to a
Change-in-Control. The Company expressly waives any right to amend or
terminate this Agreement following a Change-in-Control, and the Company
acknowledges that the Key Employee shall have a binding and irrevocable
right to the benefits set forth hereunder in the event of a
Change-in-Control. Any purported termination of such plans following a
Change-in-Control shall be ineffective, and the Key Employee shall lose
no right hereunder for failing to contest such a purported plan
termination.
a. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company to expressly assume and agree to honor this Agreement
in the same manner and to the same extent that the Company
would be required to so honor if no such succession had taken
place. Failure of the Company to obtain such agreement prior
to the effectiveness of any such succession shall be a
violation of this Agreement and shall entitle the Key Employee
to benefits from the Company or any such successor in the same
amount and on the same terms as a termination of employment
for Good Reason, except that for the purposes of implementing
for foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. the Company
shall promptly notify the Key Employee of any succession by
purchase, merger, consolidation or otherwise to all or
substantially all the business and/or assets of the Company.
b. This Agreement shall inure to the benefit of and be
enforceable by the Key Employee and his personal or legal
representatives, executors, administrators, successors, heirs,
distributions, devisees and legatees. If the Key Employee
should die while any amount would still be payable to him
hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to his devisees, legatees or,
if there be no such designee, to his estate.
c. The Company expressly acknowledges and agrees that each Key
Employee shall have a contractual right to the benefits
provided hereunder, and the Company expressly waives any
ability, if possible, to deny liability for any breach of its
contractual commitment hereunder upon the grounds of lack of
consideration, accord and satisfaction or any other defense.
In any dispute arising after a Change-in-Control as to whether
the Key Employee is entitled to such benefits under this
Agreement, there shall be a presumption that the Key Employee
is entitled to such Benefits and the burden of proving
otherwise shall be on the Company.
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d. All benefits to be paid hereunder shall be in addition to any
disability, workers' compensation, or other the Company
benefit plan distribution, unpaid vacation or other unpaid
benefits that the Employee has accrued at his Date of
Termination.
8. BINDING EFFECT. This Agreement shall be binding upon the successors
and assigns of the Company.
9. RECEIPT OF AGREEMENT. Each of the parties hereto acknowledges
reading this Agreement in its entirety and does hereby acknowledge
receipt of a fully-executed copy hereof. A fully executed copy shall be
a duplicate original for all purposes.
10. GOVERNING LAW. This Agreement is to be governed by and construed
under the law of the State of Oklahoma.
11. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it.
12. INVALID PROVISIONS. Should any part of this Agreement, for any
reason, be declared invalid, the validity and binding effect of any
remaining portion shall not be effected, and the remaining portion of
this Agreement shall remain in force and effect as if this Agreement
had been executed with the invalid provisions eliminated.
13. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties hereto, and it may not be modified or amended by oral
agreement but only by an agreement in writing signed by the Company and
the Key Employee.
14. NOT ERISA PLAN. This Agreement shall never be construed or
operated, in any way, as a "Pension Plan" within the meaning of the
Federal Employee Retirement Income Security Act of 1974 as amended.
15. NOT EMPLOYMENT CONTRACT. Notwithstanding any provision to the
contrary contained herein, this Agreement does not create an employment
contract or give the Key Employee a right to continued employment or
compensation in lieu thereof except in the case of a Change-in-Control
as defined herein.
16. CORPORATE APPROVAL. This Agreement has been approved by the Board
of Directors of the Company and has been duly executed and delivered to
the Key Employee and on behalf of the Company by its duly authorized
representative.
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17. SUPERSESSION. Where inconsistent with such agreements or plans,
this Agreement shall supersede any and all other written oral
agreements or plans between the Company and the Key Employee concerning
the subject matter or benefits described herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date hereinabove first set forth.
AARO BROADBAND WIRELESSCOMMUNICATIONS, INC.
A NEVADA CORPORATION
BY:
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NAME: XXXXXX X. XXXXXXX
TITLE: CHAIRMAN OF THE BOARD
DATE:
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"KEY EMPLOYEE"
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NAME:
DATE:
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