EXECUTIVE SEVERANCE AND
CHANGE IN CONTROL AGREEMENT
AGREEMENT (this
“Agreement”) by and between USA Mobility, Inc., a
Delaware corporation (the “ Company ”) and
___(the “ Executive ”) dated as of October 30,
2008 (the “ Effective Date ”).
WHEREAS, the
Executive is currently an employee of the Company;
WHEREAS, the Board
of Directors of the Company (the “ Board ”) has
determined that it is in the best interests of the Company and its
shareholders to foster the continued employment of the Executive,
notwithstanding recent reductions-in-force of employees at the
Company and notwithstanding the possibility, threat or occurrence
of a Change in Control (as defined in Section 1 hereof) of the
Company;
WHEREAS, the Board
has determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of the
Executive in the Executive’s assigned duties without
distraction in the face of potentially disturbing circumstances
arising from any future reductions-in-force of employees at the
Company and any possible Change in Control of the Company;
and
WHEREAS, the Board
has concluded that the interests of the Company described above can
be best satisfied by agreeing to make certain payments to the
Executive if the Executive’s employment is terminated without
cause (as defined in Section 1 hereof) either before or
following a Change in Control;
NOW, THEREFORE,
the parties hereto hereby agree as follows:
1.
Definitions . As used in this Agreement, the following terms
shall have the meanings set forth below:
“
Affiliate ” shall mean (i) any entity that,
directly or indirectly, is controlled by the Company, (ii) any
entity in which the Company has a significant equity interest and
(iii) an affiliate of the Company, as defined in
Rule 12b-2 promulgated under Section 12 of the Exchange
Act, in each case as determined by the Committee.
“
Beneficial Owner ” shall have the meaning given to
such term in Rule 13d-3 issued under the Exchange Act;
provided, however, that Beneficial Owner shall exclude any Person
becoming a Beneficial Owner by reason of the stockholders of the
Company approving a merger of the Company with another
entity.
“
Cause ” shall mean (A) dishonesty of a material
nature that relates to the performance of services for the Company
by Executives; (B) criminal conduct (other than minor
infractions and traffic violations) that relates to the performance
of services under for the Company by Executive; (C) the
Executive’s willfully breaching or failing to perform his
duties as an employee of the Company (other than any such failure
resulting from the Executive having a Disability), within a
reasonable period of time after a written demand for substantial
performance
is delivered to
the Executive by the Board, which demand specifically identifies
the manner in which the Board believes that the Executive has not
substantially performed his duties; or (D) the willful
engaging by the Executive in conduct that is demonstrably and
materially injurious to the Company, monetarily or otherwise. No
act or failure to act on the Executive’s part shall be deemed
“willful” unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that such
action or omission was in the reasonable best interests of the
Company.
“ Change
in Control ” shall be deemed to occur upon the earliest
to occur after the date of this Agreement of any of the following
events:
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(i)
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Any Person (excluding any employee
benefit plan of the Company or any subsidiary of the Company) is or
becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the
combined voting power of the Company’s outstanding securities
then entitled ordinarily to vote for the election of directors;
or
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(ii)
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During any period of two
(2) consecutive years commencing on or after the Effective
Date, the individuals who at the beginning of such period
constitute the Board or any individuals who would be Continuing
Directors (as defined below) cease for any reason to constitute at
least a majority thereof; or
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(iii)
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The Board shall approve a sale of
all or substantially all of the assets of the Company;
or
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(iv)
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The Board 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.
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“
Continuing Directors ” shall mean the directors of the
Company in office on the Effective Date and any successor to any
such director and any additional director who after the Effective
Date (i) was nominated or selected by a majority of the
Continuing Directors in office at the time of his or her nomination
or selection and (ii) who is not an “affiliate” or
“associate” (as defined in Regulation 12B
promulgated under the Exchange Act) of any person who is the
beneficial owner, directly or indirectly, of securities
representing ten percent (10%) or more of the combined voting power
of the Company’s outstanding securities then entitled
ordinarily to vote for the election of directors.
“
Code ” shall mean the Internal Revenue Code of 1986,
as amended.
“
Disability ” shall mean a condition or circumstance
such that the Executive has become totally and permanently disabled
as defined or described in the Company’s long term disability
benefit plan applicable to executive officers as in effect at the
time the Executive’s disability is incurred.
“
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended.
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“ Good
Reason ” shall mean, without the Executive’s
express written consent, any of the following, unless such act or
failure to act is corrected prior to the Date of Termination
specified in the Notice of Termination given in respect
thereof:
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(i)
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the Executive is removed from the
Executive’s position as was in effect prior to the Change in
Control for any reason other than (A) by reason of death,
Disability or Retirement or (B) for Cause; provided that such
action results in a material diminution of Executive’s
authority, duties or responsibilities;
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(ii)
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the Executive is assigned any
duties inconsistent in a material respect with the
Executive’s position (including status, offices, titles and
reporting relationships), authority, duties or responsibilities as
in effect immediately prior to the Change in Control if such
assignment results in a material diminution in such position,
authority, duties or responsibilities (excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in bad
faith and which is remedied by the Company promptly following
notice thereof given by the Executive);
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(iii)
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the Company materially breaches any
agreement under which the Executive provides services;
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(iv)
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the Executive’s annual base
salary or annual bonus opportunity as in effect immediately prior
to the Change in Control (or thereafter if higher) is reduced
(except for across-the-board reductions similarly affecting all
senior executives of the Company and all senior executives of any
Person in control of the Company); provided such reduction is a
material diminution of Executive’s base compensation or a
material breach of any agreement under which the Executive provides
services;
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(v)
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the failure by the Company to
continue to provide the Executive with benefits at least as
favorable in the aggregate as those enjoyed by the Executive under
the Company’s pension, life insurance, medical, health and
accident, disability, travel, deferred compensation and savings
plans in which the Executive was participating at the time of the
Change in Control, the taking of any action by the Company that
would directly or indirectly materially reduce such benefits in the
aggregate or deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of the Change in Control
unless such material fringe benefit is replaced with a comparable
benefit, or the failure by the Company to continue to provide the
Executive with the number of paid vacation days to which the
Executive is entitled; provided such reduction in benefits and
compensation is a material breach of any agreement under which the
Executive provides services;
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(vi)
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the failure of the Company to
obtain a satisfactory agreement from any successor to assume and
agree to perform this Agreement, as contemplated in Section 11
hereof;
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(vii)
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any relocation of the
Executive’s principal place of business as of the date
immediately preceding a Change in Control or thereafter that would
require him to relocate his principal residence by more than fifty
(50) miles; or
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(viii)
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any purported termination of the
Executive’s employment that is not effected pursuant to a
Notice of Termination satisfying the requirements of Section 5(b)
hereof, which termination for purposes of this Agreement shall be
ineffective.
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Notwithstanding
the foregoing, a termination shall not be treated as a termination
for Good Reason unless the Executive shall have delivered a Notice
of Termination stating that the Executive intends to terminate
employment for Good Reason within thirty (30) days, and such
Termination must occur within seventy five (75) days, of the
Executive’s having actual knowledge of the initial occurrence
of one or more of such events, provided, in each such event, the
Company fails to cure within thirty (30) days of receipt of
such Notice of Termination. For purposes of this Agreement, any
good faith determination of “Good Reason” or good faith
determination of the Company’s failure to cure within the
thirty (30) day period made by the Executive shall be
conclusive.
“
Person ” shall have the meaning set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Company and (ii) any trustee or
other fiduciary holding securities under an employee benefit plan
of the Company or a subsidiary of the Company.
“
Retirement ” shall mean the Executive’s
separation from service initiated by the Executive after attainment
by the Executive of age sixty-five (65).
“
Section 409A Penalties ” shall have the meaning
set forth in Section 16 of this Agreement.
“
Specified Employee ” shall mean any person described
in Section 409A(a)(2)(B)(i) of the Code and Treasury
Regulation Section 1.409A-1(i) as determined from time to
time by the Company in its discretion.
“
Termination of Employment ” shall mean and be
interpreted in a manner consistent with the definition of
“separation from service” within the meaning of
Section 409A(a)(2)(A)(i) of the Code and Treasury
Regulation Section 1.409A-1(h). The Company retains the
right and discretion to specify, and may specify, whether a
Termination of Employment occurs for individuals providing services
to the Company immediately prior to an asset purchase transaction
in which the Company is the seller, who provide services to a buyer
after and in connection with such asset purchase transaction;
provided, such specification is made in accordance with the
requirements of Treasury
Regulation Section 1.409A-1(h)(4).
2. Term of
Agreement . The term of this Agreement will commence as of the
date hereof (the “Effective Date”) and shall continue
in effect until December 31, 2012. Notwithstanding the
foregoing, upon the occurrence of a Change in Control during the
term of this Agreement, this Agreement shall continue in effect for
a period of two years from the date of such Change in Control,
unless sooner terminated as hereinafter provided.
3.
Termination Prior to any Changes in Control .
(a)
Termination Without Cause . Upon a Termination of Employment
of the Executive during the term of this Agreement by the Company
without Cause prior to any Change
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in Control, the
Executive shall be entitled to the benefits provided in
Section 4 hereof. If Executive is terminated for Cause during
the term of this Agreement whether before or after any Change in
Control, Executive shall have no rights or benefits
hereunder.
(b)
Notice of Termination . Prior to any Change in Control, the
Company may effectuate a Termination of Employment of Executive
without Cause upon ten (10) days written notice, or for Cause
upon immediate written notice, in either case delivered to
Executive by hand or in accordance with Section 12
hereof.
(c) Date
of Termination . Executive’s last day of employment upon
a Terminate of Employment with the Company prior to any Change in
Control shall be the date set forth in the written notice delivered
to Executive by the Company pursuant to Section 3(b)
hereof.
4.
Compensation upon Termination Without Cause Prior to any Change
in Control; Release . Prior to any Change in Control, upon
Termination of Employment of the Executive by the Company without
Cause (other than because of death, Disability or Retirement)
during the term of this Agreement, in lieu of any severance
benefits Executive would otherwise be eligible to receive under any
employment agreement or arrangement with the Company or under the
Company’s severance plan, if any, the Executive shall be
entitled to the following benefits and payments against receipt
from Executive of a written, signed release of the Company and its
Affiliates in form and substance reasonably acceptable to the
Company;
(a) Continuation
of Executive’s base salary payable in accordance with the
Company’s ordinary payroll practices for a period of
twenty-six (26) weeks plus two (2) additional weeks for
each year of continuous severance by Executive with the Company and
its Affiliates or predecessor entities for up to a maximum of fifty
two (52) weeks (the “Severance Period”) commencing
on the Date of Termination; and
(b) Payment
in accordance with the Company’s ordinary payroll practices
of the product of the (i) Executive’s Eligible Annual
Bonus, multiplied by (ii) a fraction the numerator of which
shall be the number of days from January 1 of the year of
Termination of Employment to the date of termination, inclusive,
and the denominator which shall be 365, at the time annual bonuses
are paid under the Company’s short term incentive plan for
such year (the “ STIP ”) but in any event no
later than March 15 of the year following the date of
termination. The “ Eligible Annual Bonus ” for
Executive shall be determined by the Company in good faith based
upon the Company’s actual performance during the full year in
which Executive’s Termination of Employment occurred and the
enumerated performance targets established by the Company under the
STIP for the Executive; and
(c) Subject
to Executive’s continued compliance with Section 9
hereof and the limitation in Section 14, life, accident and
health insurance benefits substantially similar to those that the
Executive was receiving immediately prior to the notice of
termination until the earlier to occur of (i) the end of the
Severance Period or (ii) such time as the Executive is covered
by comparable programs of a subsequent employer.
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5.
Termination Following Change in Control .
(a)
Termination Without Cause or for Good Reason. If a Change in
Control shall have occurred, upon a Termination of Employment
during the term of this Agreement by the Company without Cause, or
by the Executive for Good Reason, the Executive shall be entitled
to the benefits provided in Section 6 hereof.
(b)
Notice of Termination . Following a Change in Control, any
purported Termination of Employment by the Company or by the
Executive shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 12 hereof.
For purposes of this Agreement after a Change in Control, a “
Notice of Termination ” shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated, and
shall specify the Date of Termination. The failure by the Executive
or the Company to set forth in the Noti
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