[Exhibit 10(a)(12)]
EMPLOYMENT AGREEMENT
Agreement, made and entered into as of the 1st day of March,
1995, by and between Vanguard Cellular Systems, Inc., a North
Carolina corporation (the "Company"), and STEPHEN R. LEEOLOU (the
"Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to assure the continuing services
of the Employee, the Employee desires to continue employment with the
Company, and each desires to enter into an agreement embodying the
terms of such employment;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
1. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment with the Company, for the term set
forth in paragraph 2 below, in the position and with the duties and
responsibilities set forth in paragraph 3 below, and upon the other
terms and conditions hereinafter stated.
2. Term. The term of this Agreement shall commence as
of the date hereof, and unless otherwise terminated as hereinafter
provided, shall continue for an initial term of three years and from
year to year thereafter until terminated by either party. The
Agreement may be terminated at the end of the initial term or at the
end of any subsequent year (a "Termination Date") by written notice
by either party to the other, given not less than one year nor more
than 15 months prior to the Termination Date reflected in such
notice.
3. Duties; Position. The Employee is engaged as Executive Vice
President, and Chief Operating Officer and Secretary of the Company.
The Employee shall be responsible for such duties as are commensurate
with his office that may from time to time be assigned to the
Employee by the Company's Board of Directors.
4. Compensation. In consideration of the services to be
rendered by the Employee to the Company and in consideration of the
Employee's other covenants hereunder, the Employee will receive an
initial base salary at the rate of $340,200 (such salary as it may
be increased from time to time being hereafter referred to as "Base
Salary"), payable at such intervals as may be established by the
Company from time to time for salary payments to its senior
management employees. The Employee shall receive such increases in
his Base Salary as the Board of Directors of the Company may from
time to time approve in its discretion, provided, however, that the
Employee's Base Salary will be reviewed not less often than annually.
No decreases in Base Salary may be effected without the written
consent of the Employee. The Employee shall also be eligible to
receive such bonuses as the Board of Directors may, in its
discretion, deem appropriate, from time to time.
5. Long-Term Incentive Compensation. The Company has
established the Executive Officer Long-Term Incentive Compensation
Plan, which, by its terms, is binding on the Company and continues
until 1998. The Employee is a participant in that Plan.
6. Employee Benefits. The Employee will be entitled to
participate, in accordance with the provisions thereof, in any
employee benefit plans and programs made available by the Company to
its executive management employees generally and the Company agrees
to continue, in a form no less favorable to the Employee, those
benefits currently in effect.
7. Business Expense Reimbursements. During the period of his
employment under this Agreement, the Employee will be entitled to
reimbursement for all reasonable out-of-pocket expenses incurred by
him in performing his duties hereunder upon presentation by the
Employee, from time to time, of an itemized account of such expenses
and appropriate documentation therefor.
8. Termination of Employment.
(a) Death. In the event of the death of the Employee during his
employment under this Agreement, the following payments shall be made
to the Employee's designated beneficiary, or, in the absence of such
designation, to the estate or other legal representative of the
Employee: (i) the Employee's Base Salary shall be continued for a
period of one year following the date of his death, and (ii) such
bonuses and incentive compensation as shall have been earned by the
Employee and not paid to him at the time of his death. Any other
rights and benefits the Employee's estate or any other person may
have under employee benefit plans and programs of the Company in the
event of the Employee's death shall be determined in accordance with
the terms of such plans and programs.
(b) Disability. In the event of the disability of the Employee
during his employment under this Agreement (a "Disability"), the
Employee's Base Salary will be continued for a period of one year
following occurrence of the Disability or until commencement of
payments to the Employee equal to not less than 60% of the Employee's
Base Salary under the terms of disability insurance provided by the
Company for the benefit of the Employee, whichever first occurs. For
purposes of this Agreement, "Disability" shall mean the inability, by
reason of bodily injury or physical or mental disease, or any
combination thereof, of the Employee to perform his customary or
other comparable duties with the Company. In the event the parties
are unable to agree as to whether the Employee is suffering a
Disability, the Employee and the Company shall each select a
physician and the two physicians so chosen shall make the
determination or, if they are unable to agree, they shall select a
third physician, and the determination as to whether the Employee is
suffering a Disability shall be based upon the determination of a
majority of the three physicians. Any other rights and benefits the
Employee may have under employee benefit plans and programs of the
Company generally in the event of the Employee's disability shall be
determined in accordance with the terms of such plans and programs.
(c) Termination for Cause. Nothing herein shall prevent the
Company from terminating the Employee's employment at any time for
Cause (as hereinafter defined). Upon termination for Cause, the
Employee shall receive his Base Salary only through the date of
termination, and neither the Employee nor any other person shall be
entitled to any further payments from the Company, for salary, unpaid
bonuses or any other amounts. Any rights and benefits the Employee
may have under employee benefit plans and programs of the Company
generally following a termination of the Employee's employment for
Cause shall be determined in accordance with the terms of such plans
and programs. For purposes of this Agreement, termination for Cause
shall mean termination due to (i) continued willful or gross neglect
of duties for 30 days following receipt by the Employee of one or
more written warnings from the Board of Directors of the Company
specifying in detail the duties neglected, (ii) incapacity due to
continuing alcohol or drug addiction, (iii) continued intentional
refusal to perform the duties for which employed 30 days following
receipt by the Employee of one or more written warnings from the
Board of Directors of the Company specifying in detail the Employee's
misconduct, (iv) fraud or embezzlement committed against the
Company, or (v) the Employee's conviction for a felony.
(d) Termination Other Than For Cause. The Company may terminate
the Employee's employment under this Agreement at any time upon
written notice to the Employee for whatever reason it deems
appropriate, or for no reason. In the event such termination by the
Company occurs prior to a "change in control" (as hereafter defined)
and is not due to disability as provided in paragraph 8(b) above or
for Cause as provided in paragraph 8(c) above, the Employee shall be
entitled to the continuation of payment of his Base Salary, at the
rate in effect at the time of such termination, and to all other
benefits to which he is then entitled hereunder or as an employee of
the Company, including, without limitation, the Executive Officer
Long-Term Incentive Compensation Plan. If such termination occurs
following a "change in control," the provisions of paragraph 8(e)
shall govern in lieu of this paragraph with respect to the amounts
payable to the Employee. In the event of a termination under this
paragraph 8(d) or under paragraph 8(e), the Employee shall be under
no obligation to attempt to mitigate the obligations of the Employee
hereunder by seeking other employment, nor will any income from any
other source be offset against any amounts due hereunder, and the
Employee shall be deemed to have earned the maximum amount payable to
him under the Executive Officer Long-Term Incentive Compensation Plan
to the extent such amounts relate to periods within the term of this
Agreement with all performance goals thereunder having been deemed
to have been satisfied, which amounts shall be paid to him under that
Plan as if his employment had continued.
(e) Change in Position or Employment Conditions; Termination
Other Than for Cause Following a Change in Control. The Employee may
terminate his employment immediately upon written notice to the
Company upon the occurrence, following a "change in control" of the
Company, of any one of the following events: (i) his authority and/or
responsibility are substantially reduced, without his consent, below
that described in paragraph 3, (ii) the Employee is required to
change his residence or principal place of business from Greensboro,
North Carolina, or (iii) the travel obligations of the Employee are,
without his consent, increased materially above those in effect on
the date of this Agreement. If the Employee's employment is
terminated pursuant to this paragraph 8(e) or if the Employee's
employment is terminated pursuant to paragraph 8(d) following a
change in control, the Employee shall be entitled to receive an
amount equal a severance payment in an amount equal to his average
annual total cash compensation for the immediately preceding five
fiscal years of the Company, multiplied by 2.99 (the "Severance
Payment"). Upon entitlement, the Severance Payment will be payable
in cash or by certified check within thirty (30) days following
termination of the Employee's employment. Notwithstanding anything
to the contrary contained herein, in the event that any portion of
the Severance Payment received or to be received by the Employee,
together with any other payments received by him, whether paid or
payable pursuant to the terms of this Plan or any other plan,
arrangement or agreement with the Company or any other person or
entity, would not be deductible in whole or in part by the Company in
the calculation of its federal income tax by reason of Section 280G
of the Internal Revenue Code or would cause, either directly or
indirectly, an "excess parachute payment" to exist within the meaning
of said Section 280G, the Severance Payment payable shall be reduced
until no portion of the Severance Payment would fail to be deductible
by reason of being an "excess parachute payment." In the event that
any dispute arises as to whether an "excess parachute payment"
exists, the appropriate calculations shall be made by the Company's
regularly employed independent public auditors and delivered to the
Employee in writing within 30 days following the date for payment of
the Severance Payment, and the Company will warrant to the Employee
the accuracy of the calculations and the information on which they
are based.
For purposes of this paragraph 8(e), a "change of control" shall
be deemed to have occurred upon the occurrence of any of the
following events:
(i) Any "person" (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") but excluding any employee benefit plan of
the Company) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the
combined voting power of the Company's outstanding securities
then entitled ordinarily (and apart from rights accruing under
special circumstances) to vote for the election of directors; or
(ii) Individuals who are "Continuing Directors" (as
hereinafter defined) cease for any reason to constitute at least
a majority of the Board of Directors; or
(iii) The Board of Directors shall approve a sale of all
or substantially all of the assets of the Company; or
(iv) The Board of Directors shall approve any merger,
consolidation, or like business combination or reorganization of
the Company the consummation of which would result in the
occurrence of any event described in clause (i) or (ii) above.
For purposes of the foregoing, "Continuing Directors" shall mean
(i) the directors of the Company in office on the date hereof and
(ii) any successor to any such director (and any additional director)
who after the date hereof (y) was nominated or selected by a majority
of the Continuing Directors in office at the time of his nomination
or selection and (z) who is not an "affiliate" or "associate" (as
defined in Regulation 12B under the Exchange Act) of any person who
is the beneficial owner, directly or indirectly, of securities
representing 50% or more of the combined voting power of the
Company's outstanding securities then entitled ordinarily to vote for
the election of directors.
9. Covenants Not To Compete.
(a) The Employee hereby promises and agrees that during the term
of this Agreement or for a period of one year following the
termination of his employment with the Company, whichever later
occurs:
(i) He will not, directly or indirectly, own any
interest in, manage, operate, control, be employed by,
render consulting or advisory services to, or
participate in or be connected with the management or
control of any business that is then engaged in the
operation of a cellular telephone system (or any competitive
communication system then operated by the Company) in
competition with the Company in the Territory;
(ii) He will not, directly or indirectly, influence
or attempt to influence any customer of the Company to
discontinue its use of the Company's services or to divert
such business to any other person, firm or corporation;
(iii) He will not, directly or indirectly, interfere
with, disrupt or attempt to disrupt the relationship,
contractual or otherwise, between the Company and any of its
respective suppliers, principals, distributors, lessors or
licensors; and
(iv) He will not, directly or indirectly, solicit any
employee of the Company, whose base annual salary at the
time of the Employee's termination was $30,000 or more, to
work for any person, firm or corporation.
(b) It is the desire and intent of the parties that the
provisions of paragraph 9(a) shall be enforced to the fullest extent
permitted under the laws and public policies of each jurisdiction in
which enforcement is sought. Accordingly, if any particular portion
of paragraph 9(a) shall be adjudicated to be invalid or
unenforceable, such adjudication shall apply only with respect to the
operation of that portion in the particular jurisdiction in which
such adjudication is made, and all other portions shall continue in
full force and effect.
(c) It is expressly agreed that the provisions and covenants in
this paragraph 9 shall not apply and shall be of no force or effect
in the event that the Company fails to honor its obligations
hereunder.
(d) For purposes of this Section 9, the "Territory" shall mean
any geographic area in which the Company or any subsidiary of the
Company is operating a cellular telephone system immediately prior
to a "change in control" as defined in paragraph 8(e) of this
Agreement.
10. Injunctive Relief. The Employee acknowledges and agrees
that the Company would suffer irreparable injury in the event of a
breach by him of any of the provisions of paragraph 8 of this
Agreement and that the Company shall be entitled to an injunction
restraining him from any breach or threatened breach thereof.
Nothing herein shall be construed, however, as prohibiting the
Company from pursuing any other remedies at law or in equity which
it may have for any such breach or threatened breach of any provision
of paragraph 8 hereof, including the recovery of damages from the
Employee.
11. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Employee and his personal
representatives, estate and heirs and to the Company and its
successors and assigns, including without limitation any corporation
or other entity to which the Company may transfer all or
substantially all of its assets and business (by operation of law or
otherwise) and to which the Company may assign this Agreement. The
Employee may not assign this Agreement or any part hereof without the
prior written consent of the Company, which consent may be withheld
by the Company for any reason it deems appropriate.
12. Entire Agreement. This Agreement, together with any
agreements and similar documents entered into between the Company and
the Employee under any stock option, stock compensation or similar
employee benefit plans maintained by the Company, contains the entire
agreement of the parties with respect to the employment of the
Employee by the Company and supersedes and replaces all other
understandings and agreements, whether oral or in writing, if any,
previously entered into by the parties with respect to such
employment.
13. Amendment; Waiver. No provision of this Agreement may be
amended, modified or waived unless such amendment, modification or
waiver is agreed to in writing and signed by the Employee and by a
duly authorized officer of the Company. No waiver by either party
of any breach by the other party of any provision of this Agreement
shall be deemed a waiver of any other breach.
14. Notices. All notices or other communications given pursuant
to this Agreement shall be in writing and either delivered personally
or by prepaid registered or certified mail, return receipt requested.
Notices and other communications mailed to the Employee shall be
addressed to his last address as shown on the personnel records of
the Company, and notices and other communications to the Company
shall be addressed to Vanguard Cellular Systems, Inc., 2002 Pisgah
Church Road, Suite 300, Greensboro, North Carolina 27408, Attn:
Chairman. Either party may change the address to which notices are
to be mailed pursuant to this paragraph 13, by written notice given
in accordance herewith. Any notice pursuant to this paragraph 13
shall be effective for all purposes on the date delivered or mailed
as herein provided.
15. Severability. If any one or more of the provisions
contained in this Agreement shall be invalid, illegal, or
unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provision shall not in
any way be affected or impaired thereby.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws and judicial decisions of the
State of North Carolina.
IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first above written.
VANGUARD CELLULAR SYSTEMS, INC.
By:
(SEAL)
Stephen R. Leeolou