EXHIBIT 10.33
SEVERANCE BENEFITS AGREEMENT
This Severance Benefits Agreement (this "Agreement") by and between
________________ ("Executive"), Leap Wireless International, Inc., a Delaware
corporation ("Leap") and Cricket Communications, Inc., a Delaware corporation
("Cricket") (individually, a "Party" and collectively, the "Parties") is made
and entered into as of _______________ (the "Effective Date"). Leap and Cricket
are hereinafter collectively referred to as the "Companies."
WHEREAS, Leap and Executive previously entered into a Change in
Control Agreement, dated ___________ and Leap, Cricket and Executive previously
entered into a Retention Bonus and Severance Benefits Agreement dated February
14, 2003 (together, the "Change in Control Agreements");
WHEREAS, Executive was previously employed by Leap;
WHEREAS, Cricket is an indirect, wholly-owned subsidiary of Leap;
WHEREAS, Executive's employment was transferred to Cricket and
Executive is presently employed by Cricket;
WHEREAS, Cricket filed a petition under chapter 11 of Title 11 of
the United States Bankruptcy Code (the "Petition") in the United States
Bankruptcy Court for the Southern District of California (the "Bankruptcy
Court");
WHEREAS, Cricket desires to provide Executive with certain severance
benefits as an incentive to remain in the employ of Cricket, subject to the
approval of this Agreement by the Bankruptcy Court; and
WHEREAS, the Parties desire to terminate the Change in Control
Agreements in the event this Agreement is approved by the Bankruptcy Court.
NOW, THEREFORE, in consideration of the promises and mutual
covenants contained herein and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged by each Party
hereto, the Parties hereby agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence on the Effective
Date and shall continue in effect through the first anniversary of the effective
date of a plan of reorganization for Cricket under Chapter 11 of the United
States Bankruptcy Code (the "Term of the Agreement").
2. SEVERANCE BENEFITS.
a. Severance Benefits. In the event that, during the period
commencing on the Section 2 Effective Date (as set forth in Section 2(h))
and during the remaining Term of the Agreement, Executive's employment is
terminated by Cricket other than for Cause (as defined below), or by
Executive for Good Reason (as defined below), Executive shall be entitled
to the following:
(i) Cricket shall pay Executive a lump sum payment in
cash (the "Severance Payment") equal to seventy-five percent (75%)
of the Executive's annual base salary as in effect as of the Date of
Termination (as defined below).
(ii) To the extent Executive elects continuation health
care coverage for Executive and his eligible dependents under
Section 4980B(f) of the Internal Revenue Code of 1986, as amended
from time to time (the "Code") and Sections 601-608 of the Employee
Retirement Income Security Act of 1974, as amended ("COBRA
Coverage"), Executive shall not be required to pay premiums for such
COBRA Coverage for the nine month period commencing on the Date of
Termination (or, if earlier, until Executive is eligible for
comparable coverage with a subsequent employer).
b. Cause. For purposes of this Section 2, "Cause" shall mean
termination of Executive's employment by Cricket: (i) upon Executive's
willful and continued failure substantially to perform Executive's duties
with Cricket (other than any such failure resulting from Executive's
incapacity due to physical or mental illness or any such actual or
anticipated failure after Executive's issuance of a Notice of Termination
(as defined below) for Good Reason), after a written demand for
substantial performance is delivered to Executive by the Board of
Directors of Cricket (the "Cricket Board"), which demand specifically
identifies the manner in which the Cricket Board believes that Executive
has not substantially performed such duties, (ii) upon Executive's willful
and continued failure substantially to follow and comply with the specific
and lawful directives of the Cricket Board, as reasonably determined by
the Cricket Board (other than any such failure resulting from Executive's
incapacity due to physical or mental illness or any such actual or
anticipated failure after Executive's issuance of a Notice of Termination
for Good Reason), after a written demand for substantial performance is
delivered to Executive by the Cricket Board, which demand specifically
identifies the manner in which the Cricket Board believes that Executive
has not substantially performed such directives, (iii) upon Executive's
willful commission of an act of fraud or dishonesty resulting in material
and demonstrable damage to Cricket, or (iv) upon Executive's willful
engagement in illegal conduct or gross misconduct that is materially and
demonstrably damaging to Cricket. For purposes of this Section 2(b), no
act, or failure to act, on Executive's part shall be deemed "willful"
unless done, or omitted to be done, by Executive not in good faith.
Notwithstanding the foregoing, Executive's employment shall not be deemed
terminated for "Cause" pursuant to this Section 2(b) unless and until
there shall have been delivered to Executive a copy of a resolution duly
adopted by the affirmative vote of not less than two-thirds (2/3) of the
entire membership of the Cricket Board at a meeting of the Cricket Board
(after reasonable notice to Executive, an opportunity for Executive,
together with Executive's counsel, to be heard before the Cricket Board
and a reasonable opportunity to cure (provided such conduct is capable of
being cured)), finding that, in the Cricket Board's good faith opinion,
Executive has committed the conduct set forth above in this Section 2(b)
and specifying the particulars thereof in reasonable detail.
c. Good Reason. For purposes of this Section 2, "Good Reason"
shall mean, without Executive's express written consent, the occurrence of
any of the
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following circumstances unless such circumstances are cured (provided such
circumstances are capable of being cured) prior to the Date of Termination
specified in the Notice of Termination given in respect thereof: (i) the
assignment to Executive of any duties inconsistent with Executive's
position, a significant adverse alteration in the nature or status of
Executive's responsibilities or the conditions of Executive's employment,
or any other action that results in a material diminution in Executive's
position, authority, title, duties or responsibilities; (ii) reduction of
Executive's annual base salary as in effect on the Effective Date or as
the same may be increased from time to time thereafter; (iii) the
relocation of Cricket's offices at which Executive is principally employed
to a location more than thirty (30) miles from such location; (iv)
Cricket's failure to pay Executive any portion of Executive's current
compensation; (v) Cricket's failure to continue in effect any material
compensation or benefit plan in which Executive participates, unless an
equitable arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or Cricket's failure to
continue Executive's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms
of the amount of benefits provided and the level of Executive's
participation relative to other participants; (vi) Cricket's failure to
continue to provide Executive with benefits substantially similar in the
aggregate to those enjoyed by Executive under any of Cricket's life
insurance, medical, health and accident, disability, pension, retirement,
or other benefit plans in which Executive or Executive's eligible family
members were participating immediately prior thereto, or the taking of any
action by Cricket which would directly or indirectly materially reduce any
of such benefits; (vii) Cricket's failure to obtain a satisfactory
agreement from any successor to assume and agree to perform this
Agreement; or (viii) the continuation or repetition, after written notice
of objection from Executive, of harassing or denigrating treatment of
Executive by Cricket inconsistent with Executive's position with Cricket.
Executive's right to terminate employment with Cricket pursuant to this
Section 2(c) shall not be affected by Executive's incapacity due to
physical or mental illness. Executive's continued employment with Cricket
shall not constitute consent to, or a waiver of rights with respect to,
any circumstance constituting Good Reason hereunder.
d. Notice of Termination. Any purported termination of
Executive's employment by Cricket for Cause or by Executive for Good
Reason shall be communicated by Notice of Termination to the other party
hereto in accordance with Section 4. "Notice of Termination" shall mean a
written notice that shall indicate the specific termination provision in
this Section 2 relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for the termination of
employment under the provision so indicated.
e. Date of Termination. For purposes of this Section 2, "Date
of Termination" shall mean the date specified in the Notice of Termination
(which, in the case of a termination by Cricket for Cause shall not be
less than thirty (30) days after the date such Notice of Termination is
given, and in the case of a termination by Executive for Good Reason shall
not be less than fifteen (15) nor more than sixty (60) days after the date
such Notice of Termination is given).
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f. General Release. In consideration of, and as a condition to
receiving, the benefits to be provided to Executive under this Section 2,
Executive shall execute and deliver to the Companies the "General Release"
set forth on Exhibit A hereto on or after the Date of Termination and not
later than twenty-one (21) days after the Date of Termination (or, in the
event that the termination of Executive's employment with Cricket is in
connection with an exit incentive or other employment termination program
offered to a group or class of employees, not later than forty-five (45)
days after the Date of Termination (or, if later, the date Executive is
provided with the information required in accordance with Section 3(f) of
the General Release)). In the event that Executive fails to execute and
deliver to the Companies the General Release in accordance with this
Section 2(f), or Executive revokes the General Release in accordance with
the terms thereof, Executive shall not receive the benefits set forth in
this Section 2.
g. Termination of Change in Control Agreements. In
consideration of the execution and delivery of this Agreement by Cricket
and Leap, the Change in Control Agreements are hereby terminated effective
as of the Section 2 Effective Date (as set forth in Section 2(h) below).
From and after the Section 2 Effective Date, Executive waives any and all
rights, claims, benefits and awards under the Change in Control Agreements
and releases Leap and Cricket from any liability or obligation for any and
all rights, claims, benefits or awards due Executive thereunder.
h. Petition. This Section 2 shall be subject to and shall only
be effective upon the occurrence of the approval of this Agreement by the
Bankruptcy Court. The date on which the Bankruptcy Court approves this
Agreement is the "Section 2 Effective Date." In the event that this
Agreement is not approved by the Bankruptcy Court, this Agreement shall be
null and void in its entirety and of no further force or effect and the
Change in Control Agreements shall remain in full force and effect.
i. Timing of Payments. The payments provided for in this
Section 2 shall be made not later than the tenth day following the date on
which the General Release by Executive becomes irrevocable.
3. SUCCESSORS; BINDING AGREEMENT. This Agreement shall inure to the
benefit of and shall be binding upon the Companies and their respective
successors and assigns, including any purchaser of all or substantially all of
their respective assets, and shall be binding upon Executive's assigns,
executors, administrators, beneficiaries, or their legal representatives.
4. NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the last known mailing address of the respective Party, provided
that all notices to Cricket shall be directed to the attention of the Cricket
Board with a copy to the Secretary of Cricket, and all notices to Leap shall be
directed to the attention of the Board of Directors of Leap with a copy to the
Secretary of Leap, or to such other address as any Party may have furnished to
the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
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5. NON-COMPETE, CONFIDENTIALITY AND NON-SOLICITATION COVENANTS. In
consideration of the benefits to be provided to Executive under Section 2 of
this Agreement, and in order to protect the goodwill of Cricket, Executive
hereby agrees to the following covenants.
a. Non-Compete. For a period of nine (9) months commencing on
the Date of Termination, Executive shall not, directly or indirectly, own,
manage, operate, join, control or participate in the ownership,
management, operation or control of, or be connected as a director,
officer, employee, partner, consultant or otherwise with, any profit or
nonprofit business or organization which, directly or indirectly competes
with, or in any way interferes with, the business of Cricket or any of its
respective affiliates in any region in which Cricket is then operating or
has firm plans to operate.
b. Confidentiality. For the period of three years commencing
on the Date of Termination, Executive shall not, directly or indirectly,
disclose or make available to any person, firm, corporation, association
or other entity for any reason or purpose whatsoever, any Confidential
Information (as defined below). Executive agrees that, upon termination of
Executive's employment with Cricket, all Confidential Information in
Executive's possession that is in writing or other tangible form (together
with all copies or duplicates thereof, including computer files) shall be
returned to Cricket and shall not be retained by Executive or furnished to
any third party, in any form except as provided herein; provided, however,
that Executive shall not be obligated to treat as confidential, or return
to Cricket copies of any Confidential Information that (i) was publicly
known at the time of disclosure to Executive, (ii) becomes publicly known
or available thereafter other than by any means in violation of this
Agreement or any other duty owed to Cricket by any person or entity, or
(iii) is lawfully disclosed to Executive by a third party. As used in this
Agreement, the term "Confidential Information" means: information
disclosed to Executive or known by Executive as a consequence of or
through Executive's relationship with Cricket, about the customers,
employees, business methods, technical operations, public relations
methods, organization, procedures or finances, including, without
limitation, information of or relating to customer lists, of Cricket and
its affiliates.
c. Non-Solicitation. For the period commencing on the Date of
Termination and terminating on the third anniversary thereof, Executive
shall not, either on Executive's own account or jointly with or as a
manager, agent, officer, employee, consultant, partner, joint venture,
owner or shareholder or otherwise on behalf of any other person, firm or
corporation, directly or indirectly solicit or attempt to solicit away
from Cricket, or any of its affiliates, any of its officers or employees
or offer employment to any person who, on or during the six (6) months
immediately preceding the date of such solicitation or offer, is or was an
officer or employee of Cricket, or any of its affiliates; provided,
however, that a general advertisement to which an employee of Cricket, or
any of its affiliates, responds shall in no event be deemed to result in a
breach of this Section 5(c).
d. Breach of Covenants. In the event that Executive breaches
any of the provisions of this Section 5, or threatens to do so, in
addition to and without limiting or waiving any other remedies available
to Cricket in law or in equity, Cricket shall be
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entitled to immediate injunctive relief in any court having the capacity
to grant such relief, to restrain such breach or threatened breach and to
enforce this Section 5. Executive acknowledges that it is impossible to
measure in money the damages that Cricket will sustain in the event that
Executive breaches or threatens to breach this Section 5 and, in the event
that Cricket institutes any action or proceeding to enforce this Section 5
seeking injunctive relief, Executive hereby waives and agrees not to
assert or use as a defense a claim or defense that Cricket has an adequate
remedy at law. Also, in addition to any other remedies available to
Cricket in law or in equity, in the event that Executive breaches the
provisions of this Section 5 in any material respect, Executive shall
forfeit Executive's right to further benefits under Section 2 and
Executive shall be obligated to repay to Cricket the benefits that
Executive has received under Section 2. If a court or arbitrator shall
hold that the duration, scope or area restriction or other provision of
this Section 5 is unreasonable under the circumstances now or then
existing, the Parties hereto agree that the maximum duration, scope or
area restriction reasonable under the circumstances shall be substituted
for the stated duration, scope or area restriction.
6. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by Executive and such officer of Cricket and Leap as may
be specifically designated thereby. No waiver by any Party hereto at any time of
any breach by any other Party hereto of or compliance with, any condition or
provision of this Agreement to be performed by such other Party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
any Party which are not expressly set forth in this Agreement. Executive
acknowledges that Executive has consulted with counsel (or has had a reasonable
opportunity to consult with counsel) and is fully aware of Executive's rights
and obligations under this Agreement. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
California without regard to its conflicts of law principles. All references to
sections of any federal, state or local law shall be deemed also to refer to any
successor provisions to such sections. Any payments provided for hereunder shall
be paid net of any applicable withholding required under federal, state or local
law. The Section headings contained in this Agreement are for convenience only,
and shall not affect the interpretation of this Agreement.
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7. SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
8. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
9. ARBITRATION; DISPUTE RESOLUTION, ETC. Any disagreement, dispute,
controversy or claim arising out of or relating to this Agreement or the
interpretation of this Agreement or any arrangements relating to this Agreement
or contemplated in this Agreement or the breach, termination or invalidity
thereof shall be settled by final and binding arbitration administered by the
American Arbitration Association ("AAA") in San Diego, California in accordance
with its then existing National Rules for the Resolution of Employment Disputes.
In the event of such an arbitration proceeding, the Parties shall select a
mutually acceptable neutral arbitrator from among the AAA panel of arbitrators.
In the event the Parties cannot agree on an arbitrator, the Administrator of AAA
will appoint an arbitrator. Neither the Parties nor the arbitrator shall
disclose the existence, content, or results of any arbitration hereunder without
the prior written consent of all Parties. Except as provided herein, the Federal
Arbitration Act shall govern the interpretation, enforcement and all
proceedings. The arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state of California, or federal law, or both, as
applicable and the arbitrator is without jurisdiction to apply any different
substantive law. The arbitrator shall have the authority to entertain a motion
to dismiss and/or a motion for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil Procedure. The
arbitrator shall render an award and a written, reasoned opinion in support
thereof. Judgment upon the award may be entered in any court having jurisdiction
thereof. Cricket shall pay all fees and expenses of the Arbitrator regardless of
the result and shall provide all witnesses and evidence reasonably required by
Executive to present Executive's case. Cricket shall pay to Executive all
reasonable arbitration expenses and legal fees incurred by Executive if
Executive prevails in enforcing or obtaining his or her rights or benefits
provided by this Agreement. Such payments shall be made within five (5) days
after Executive's request for payment accompanied with such evidence of fees and
expenses incurred as Cricket reasonably may require.
10. AT-WILL EMPLOYMENT. Nothing in the foregoing diminishes or
alters Cricket's policy of at-will employment for all employees, where both
Cricket and Executive may terminate the employment relationship at any time and
for any reason, with or without cause or notice.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
of the Parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto.
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IN WITNESS WHEREOF, the Parties have signed their names as of the day
and year first above written.
LEAP WIRELESS INTERNATIONAL, INC.
By:________________________________
Name:______________________________
Title:_____________________________
CRICKET COMMUNICATIONS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
EXECUTIVE
By:
Name: ((Name))
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EXHIBIT A
GENERAL RELEASE
1. GENERAL RELEASE OF CLAIMS. In consideration of the benefits under
Section 2 of the Severance Benefits Agreement (the "Agreement"), effective as of
________________, by and between Leap Wireless International, Inc. ("Leap"),
Cricket Communications, Inc. ("Cricket") (collectively, the "Companies") and
________________ ("Employee"), Employee does hereby for himself or herself and
his or her spouse, beneficiaries, heirs, successors and assigns, release, acquit
and forever discharge the Companies and their respective stockholders, officers,
directors, managers, employees, representatives, related entities, successors
and assigns, and all persons acting by, through or in concert with them (the
"Releasees") of and from any and all claims, actions, charges, complaints,
causes of action, rights, demands, debts, damages, or accountings of whatever
nature, except for criminal activity, known or unknown, which Employee may have
against the Releasees based on any actions or events which occurred prior to the
date of this General Release, including, but not limited to, those related to,
or arising from, Employee's employment with the Companies, or the termination
thereof, any claims under Title VII of the Civil Rights Act of 1964, the Federal
Age Discrimination and Employment Act and the California Fair Employment and
Housing Act, but excluding claims under the Agreement (collectively, "Claims").
This General Release shall not, however, constitute a waiver of any of
Employee's rights under the Agreement or under any outstanding stock option
granted to Employee, or under the terms of any employee benefit plan of the
Companies in which Employee is a participant.
2. RELEASE OF UNKNOWN CLAIMS. In addition, Employee expressly waives
all rights under Section 1542 of the Civil Code of the State of California,
which reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIM FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
3. OLDER WORKER'S BENEFIT PROTECTION ACT. Employee agrees and
expressly acknowledges that this General Release includes a waiver and release
of all claims which Employee has or may have under the Age Discrimination in
Employment Act of 1967, as amended, 29 U.S.C. Section 621, et seq. ("ADEA"). The
following terms and conditions apply To and are part of the waiver and release
of the ADEA claims under this General Release:
a. That the Agreement and this General Release are written in
a manner calculated to be understood by Employee.
b. The waiver and release of claims under the ADEA contained
in this General Release do not cover rights or claims that may arise after
the date on which Employee signs this General Release.
c. The Agreement provides for consideration in addition to
anything of value to which Employee is already entitled.
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d. Employee is advised to consult an attorney before signing
this General Release.
e. Employee is afforded twenty-one (21) days (or, in the event
that the termination of Employee's employment is in connection with an
exit incentive or other employment termination program, forty-five (45)
days) after Employee is provided with this General Release to decide
whether or not to sign this General Release. If Employee executes this
General Release prior to the expiration of such period, Employee does so
voluntarily and after having had the opportunity to consult with an
attorney.
f. In the event that the termination of Employee's employment
is in connection with an exit incentive or other employment termination
program, Employee is provided with written information, calculated to be
understood by the average individual eligible to participate, as to:
(i) any class, unit, or group of individuals covered by
such program, any eligibility factors for such program, and any time
limits applicable to such programs; and
(ii) the job titles and ages of all individuals eligible
or selected for the program, and the ages of all individuals in the
same job classification or organizational unit who are not eligible
or not selected for the program.
g. Employee will have the right to revoke this General Release
within seven (7) days of signing this General Release. In the event this
General Release is revoked, this General Release will be null and void in
its entirety, and Employee will not receive the benefits described in
Section 2 of the Agreement.
h. If Employee wishes to revoke the General Release, Employee
shall deliver written notice stating his intent to revoke this General
Release to Cricket's President on or before the seventh (7th) day after
the date hereof.
4. NO ASSIGNMENT OF CLAIMS. Employee represents and warrants to the
Releasees that there has been no assignment or other transfer of any interest in
any Claim which Employee may have against the Releasees, or any of them, and
Employee agrees to indemnify and hold the Releasees harmless from any liability,
claims, demands, damages, costs, expenses and attorneys' fees incurred as a
result of any person asserting any such assignment or transfer of any rights or
Claims under any such assignment or transfer from such party.
5. NO SUITS OR ACTIONS. Employee agrees that if he or she hereafter
commences, joins in, or in any manner seeks relief through any suit arising out
of, based upon, or relating to any of the Claims released hereunder, or in any
manner asserts against the Releasees any of the Claims released hereunder, then
he or she will pay to the Releasees against whom such suit or Claim is asserted,
in addition to any other damages caused thereby, all attorneys' fees incurred by
such Releasees in defending or otherwise responding to said suit or Claim.
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6. NO ADMISSION. Employee further understands and agrees that
neither the payment of money nor the execution of this Release shall constitute
or be construed as an admission of any liability whatsoever by the Releasees.
EMPLOYEE
-------------------------------------
((Name))
Date:
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