Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (“Agreement”), is made as of the 6
th day
of June, 2007 (“Date of Agreement”) by and between
DOBSON COMMUNICATIONS CORPORATION, an Oklahoma corporation, (the
“Company” and as this term is further defined in
Section 12(a) below) and TIMOTHY J. DUFFY
(“Executive”).
IN CONSIDERATION of the premises and
the mutual covenants set forth below, the parties hereby agree as
follows:
1. Employment . The
Company hereby agrees to employ the Executive as Senior Vice
President and Chief Technical Officer of the Company, and Executive
hereby accepts employment, on the terms and conditions set forth in
this Agreement.
2. Term . The period of
employment of Executive by the Company under this Agreement (the
“Employment Period”) will commence on the Date of
Agreement and continue for a period of two (2) years through
the second anniversary of the Date of Agreement (the
“Expiration Date”) and subsequent extension or
continuation of employment thereafter, if any. In the absence of
written notice from either the Executive or the Company at least
six months prior to the Expiration Date, the Agreement shall
automatically renew for one (1) year beginning on the stated
Expiration Date. After the Expiration Date and a one (1) year
extension, if applicable, no further automatic extensions shall
occur without the written authorization of the Compensation
Committee of the Company’s Board of Directors
(“Board”); in the absence of such authorization,
employment shall continue solely on an at will basis in which the
Executive or the Company may terminate the employment relationship
at any time for any reason. The Employment Period may be sooner
terminated under Section 6 of this Agreement.
3. Position and Duties .
Executive will have those powers and duties normally associated
with the position of Vice President and Chief Technical Officer,
will devote substantially all of Executive’s working time,
attention and energies (other than absences due to illness or
vacation) to the performance of Executive’s duties for the
Company. Notwithstanding the above, Executive will be permitted, to
the extent such activities do not reasonably interfere with the
performance by Executive of Executive’s duties and
responsibilities under this Agreement or violate
Sections 10(a), (b) or (c) of this Agreement, to
(i) manage Executive’s personal, financial and legal
affairs, (ii) serve on civic or charitable boards or
committees; and (iii) serve on boards or committees of other
entities not in conflict or competition with the Company.
4. Place of Performance
. Executive acknowledges and agrees that the principal place of
employment of Executive will be the Company’s principal
executive offices in Oklahoma City, Oklahoma or in such location
where the Executive is regularly employed by the Company on the
Date of Agreement.
5. Compensation and Related
Matters .
(a)
Base Salary . During the Employment Period, the Company will
pay Executive a base salary at the rate of not less than Two
Hundred Seventy-Seven Thousand and No/100 Dollars ($277,000.00) per
year (“Base Salary”), in approximately equal
installments in accordance with the Company’s customary
payroll practices. Executive’s Base Salary may be increased,
but not decreased, pursuant to annual review by the Board. Such
increased Base Salary will then constitute the Base Salary for all
purposes of this Agreement.
(b)
Annual Incentive Bonus . The Board shall establish bonus
target amounts and performance goals for the Executive during each
calendar year of the Employment Period.
(c)
Welfare, Pension and Incentive Benefit Plans . During the
Employment Period, Executive (and Executive’s spouse and/or
dependents to the extent provided in the applicable plans and
programs) will be entitled to participate in and be covered under
all the welfare benefit plans or programs maintained by the Company
for the benefit of its senior executive officers pursuant to the
terms of such plans and programs, including, without limitation,
all medical, life, hospitalization, dental, disability, accidental
death and dismemberment and travel accident insurance plans and
programs. In addition, during the Employment Period, Executive will
be eligible to participate in all pension, retirement, savings
incentive or other stock option programs; and other employee
benefit plans and programs maintained from time to time by the
Company for the benefit of its senior executive officers.
6. Termination .
Executive’s employment under this Agreement may be terminated
during the Employment Period under the following
circumstances:
(a)
Death . Executive’s employment under this Agreement
will terminate upon Executive’s death.
(b)
Disability . If, as a result of Executive’s incapacity
due to physical or mental illness, Executive is substantially
unable to perform Executive’s duties under this Agreement
(with or without reasonable accommodations, as defined under the
Americans With Disabilities Act), for an entire period of six
(6) consecutive months, and within thirty (30) days after
a Notice of Termination (as defined in Section 7(a)), is given
after such six (6) month period, Executive does not return to
the substantial performance of Executive’s duties on a full-
time basis, the Company has the right to terminate
Executive’s employment under this Agreement for
“Disability,” and such termination will not be a breach
of this Agreement by the Company.
(c)
Cause . The Company has the right to terminate
Executive’s employment for Cause, and such termination will
not be a breach of this Agreement by the Company.
“Cause” means termination of employment for one of the
following reasons: (i) the conviction of the Executive by a
federal or state court of competent jurisdiction of a felony which
relates to the Executive’s employment the Company;
(ii) an act or acts of dishonesty taken by the Executive and
intended to result in substantial personal enrichment of the
Executive at the expense of the Company; or,(iii) the
Executive’s “willful” failure to follow a direct,
reasonable and lawful written directive from Executive’s
supervisor or the Board, within the reasonable scope of the
Executive’s duties, which failure is not cured to the
satisfaction of the Board within thirty (30) days. Further,
for purposes of this Subsection (c):
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(1) No
act or omission by the Executive shall be deemed
“willful” unless done, or omitted by the Executive in
bad faith and without reasonable belief that the Executive’s
action or omission was in the best interest of the Company.
(2) The
Executive shall not be deemed to have been terminated for Cause
unless and until the Company delivers to the Executive a copy of
the resolution duly adopted by the affirmative vote of not less
than three-fourths (3/4ths) of the entire membership of the Board,
at a meeting of the Board, called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the
Executive, together with the Executive’s counsel, to be heard
before the Board), finding that in the good faith opinion of the
Board, the Executive was guilty of conduct set forth in clauses
(i), (ii), or (iii) above and specifying the particulars
thereof in detail.
(d)
Good Reason . For a period of one (1) year after a
Change in Control (as defined in Section 17 herein), Executive
may terminate Executive’s employment for “Good
Reason” upon the occurrence, within one (1) year after a
Change in Control and without Executive’s written consent of
one of the two events set forth below:
(i) a
material change in Executive’s authority, duties or
responsibilities; or
(ii) the
Company requiring Executive to be based at any office or location
outside of the Oklahoma City metropolitan area or outside the
metropolitan area where the Executive is regularly employed
immediately before a Change in Control except for travel reasonably
required in the performance of Executive’s responsibilities;
provided, transfer of the Executive from any location to Oklahoma
City, Oklahoma shall not be a violation of this Subsection
(d)(ii);
Executive shall give Notice of Termination for Good Cause to the
Company within seven (7) days of Executive’s actual
knowledge of such occurrence. Such termination for Good Reason will
not be a breach of this Agreement.
(e)
Without Cause . The Company has the right to terminate
Executive’s employment under this Agreement without Cause by
providing Executive with a Notice of Termination, and such
termination will not in and of itself be a breach of this
Agreement.
(f)
Voluntary Termination . The Executive may voluntarily
terminate employment with the Company at any time, and if such
termination is not for Good Reason, then, the Executive shall be
only entitled to compensation and benefits as described in
Section 8 (b) hereof.
7. Termination Procedure
.
(a)
Notice of Termination . Any termination of Executive’s
employment by the Company or by Executive during the Employment
Period (other than termination pursuant to Section 6(a)) will
be communicated by written Notice of Termination to the other party
in
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accordance with Section 15. For purposes of this Agreement, a
“Notice of Termination” means a written notice which
indicates the specific termination provision in this Agreement
relied upon and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive’s employment.
(b)
Date of Termination . “Date of Termination”
shall mean (i) if Executive’s employment is terminated
by Executive’s death, the date of Executive’s death,
(ii) if Executive’s employment is terminated due to
Disability pursuant to Section 6(b), thirty (30) days
after Notice of Termination (provided that Executive has not
returned to the substantial performance of Executive’s duties
on a full-time basis during such thirty (30) day period),
(iii) if Executive’s employment is terminated for Good
Reason pursuant to Section 6(d), the date on which Notice of
Termination is given as required in Section 6(d), or
(iv) if Executive’s employment is terminated for any
other reason, the date on which a Notice of Termination is given or
any later date (within thirty (30) days after the giving of
such Notice of Termination) set forth in such Notice of
Termination.
8. Compensation Upon
Termination or During Disability . In the event of
Executive’s disability or termination of Executive’s
employment under this Agreement during the Employment Period, the
Company will provide Executive with the payments and benefits set
forth below. The Executive agrees that the Company has the right to
deduct any amounts owed by the Executive to the Company for any
reason, including, without limitation, due to the Executive’s
misappropriation of Company funds, from the payments set forth in
this Section 8.
(a)
Termination By Company without Cause or By Executive for Good
Reason . If Executive’s employment is terminated by the
Company without Cause or by Executive for Good Reason:
(i) The
Company will pay to Executive in a single lump sum payment
(A) Executive’s pro rata Base Salary and accrued
vacation pay through the Date of Termination, as soon as
practicable following the Date of Termination, and (B) the
product obtained by multiplying the Executive’s Annual
Compensation by a factor of 1. For purposes of this Agreement,
Annual Compensation is the sum of the Executive’s annualized
Base Salary and the bonus paid to Executive for the last twelve
(12) months before the Date of Termination.
(ii) The
Company will maintain in full force and effect, for the continued
benefit of Executive (and Executive’s spouse and/or
Executive’s dependents, as applicable) for a period of twelve
(12) months following the Date of Termination the medical,
hospitalization, and dental programs, in which Executive (and
Executive’s spouse and/or Executive’s dependents, as
applicable) participated immediately prior to the Date of
Termination at the level in effect and upon substantially the same
terms and conditions (including without limitations contributions
required by Executive for such benefits) as existed immediately
prior to the Date of Termination; provided, if the Executive (or
Executive’s spouse) is eligible for Medicare of a similar
type of government medical benefit, such benefit shall be the
primary provider before Company medical benefits are provided. If
Executive (or Executive’s spouse and/or Executive’s
dependents) cannot continue to participate in the Company programs
providing such benefits, the Company shall arrange to provide
Executive (and Executive’s spouse and/or Executive’s
dependents, as applicable) with the economic equivalent of
such
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benefits
which they otherwise would have been entitled to receive under such
plans and programs (“Continued Benefits”). However, if
Executi
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