EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made, entered into and is
effective as of November 30, 2004 (the “Effective Date”) by and between iPCS
Wireless, Inc., a Delaware corporation (the “Company”), Edmund L. Quatmann, Jr.
(“Executive”) and, for the limited purposes specified herein, iPCS, Inc.
(“Parent”).

 

WITNESSETH THAT:

 

WHEREAS, Executive will provide services to the Company as an employee as the
General Counsel;

 

WHEREAS, the Company desires to employ Executive as an employee and Executive
desires to be employed by the Company, pursuant to the terms of this Agreement,
all effective as of the Effective Date;

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
below, it is hereby covenanted and agreed by the Company, Executive and, for the
limited purposes specified, the Parent, as follows:

 

1.                                       Employment Period.  Subject to the
terms and conditions of this Agreement, the Company hereby agrees to employ
Executive during the Employment Period (as defined below) and Executive hereby
agrees to remain in the employ of the Company and to provide services during the
Employment Period in accordance with this Agreement.  The “Initial Employment
Period” shall be the period beginning on the Effective Date and ending on the
third anniversary thereof, unless sooner terminated as provided herein.  At the
conclusion of the Initial Employment Period, this Agreement shall automatically
renew for additional one year terms (each a “Renewal Employment Period” and
together with the Initial Employment Period, the “Employment Period”) unless
either party gives notice of intent not to renew at least 90 days prior to the
beginning of any Renewal Employment Period.

 

2.                                       Change in Control.  In the event of a
Change in Control (as defined below) of the Company or the Parent, the
provisions of Exhibit A, which is attached hereto and which forms part of this
Agreement, shall apply.  For purposes of this Agreement, the term “Change in
Control” shall be as defined in the iPCS, Inc. 2004 Long-Term Stock Incentive
Plan (the “Incentive Plan”), as in effect as of the Effective Date (modified as
necessary, if applied to the Company, to substitute the Company for the Parent
in such definition).

 

3.                                       Duties.  Executive agrees that during
the Employment Period from and after the Effective Date, while Executive is
employed by the Company, Executive will devote Executive’s full business time,
energies and talents to serving as the General Counsel of the Company and the
Parent, at the direction of the Company’s President and Chief Executive Officer
(“CEO”).  Executive shall have such duties and responsibilities, as are
commensurate with Executive’s

 

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position with the Company and Parent, as may be assigned to Executive from time
to time by the CEO, shall perform all duties assigned to Executive faithfully
and efficiently, subject to the direction of the CEO, and shall have such
authorities and powers as are inherent to the undertakings applicable to
Executive’s position and necessary to carry out the responsibilities and duties
required of Executive hereunder.  Executive will perform the duties required by
this Agreement at the Company’s principal place of business unless the nature of
such duties requires otherwise.  Notwithstanding the foregoing, during the
Employment Period, Executive may devote reasonable time to activities other than
those required under this Agreement, including activities of a charitable,
educational, religious or similar nature (including professional associations)
to the extent such activities do not, in the reasonable judgment of the CEO,
inhibit, prohibit, interfere with or conflict with Executive’s duties under this
Agreement or conflict in any material way with the business of the Parent, the
Company and their respective affiliates; provided, however, that Executive shall
not serve on the board of directors of any business (other than the Parent or
the Company, or their affiliates) or hold any other position with any business
without receiving the prior written consent of the CEO, which consent, with
respect to private company boards, may not be unreasonably withheld.

 

4.                                       Compensation and Benefits.  Subject to
the terms and conditions of this Agreement, during the Employment Period, while
Executive is employed by the Company, the Company shall compensate Executive for
Executive’s services as follows for periods following the Effective Date:

 

(a)                                  Executive shall be compensated at an annual
rate of $190,000 (the “Annual Base Salary”), which shall be payable in
accordance with the normal payroll practices of the Company.  Beginning on
January 1, 2006 and on each anniversary of such date, Executive’s rate of Annual
Base Salary shall be reviewed by the CEO and/or the Compensation Committee of
the Parent’s Board of Directors (the “Compensation Committee”), and following
such review, the Annual Base Salary may be adjusted upward but in no event will
be decreased.

 

(b)                                 Executive shall be entitled to receive
performance based annual incentive bonuses (each, the “Incentive Bonus”) from
the Company in accordance with the Company’s Executive Compensation Strategy and
Incentive Design Plan as in effect from time to time (the “Incentive Bonus
Plan”).  The annual Incentive Bonus at the target level of performance will be
40% of the Annual Base Salary for the year to which the bonus relates (the
“Target Incentive Bonus”), determined and payable for the first time for fiscal
year 2005 on a pro-rated basis.  The annual Incentive Bonus may range from 50%
to 200% of the Target Incentive Bonus based the level of the Company’s and
Executive’s performance.  In addition, the Incentive Bonus is subject to further
adjustment as described below.

 

After discussions with Executive, the CEO and/or the Compensation Committee
shall establish annual incentive goals that provide Executive with the
opportunity to earn an annual Incentive Bonus.  Such goals will be delivered in
writing to

 

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Executive annually prior to the 60th day following the beginning of the
applicable performance period.  Within 45 days after the end of each performance
period, the CEO and/or the Compensation Committee shall review the goals for
such year and develop recommendations as to the amount of Incentive Bonus
Executive is eligible to receive based on the satisfaction of the applicable
criteria.  The CEO’s and/or the Compensation Committee’s recommendation may
include recommendations to increase or decrease the Incentive Bonus by up to an
additional 20% based on individual performance.  All such recommendations will
be submitted to the Parent’s Board of Directors (the “Board”) for review and
amendment (if necessary).  Promptly after review by the Board, Executive shall
be notified of the outcome and, if applicable, any Incentive Bonus that was
awarded shall be paid.  Notwithstanding the Board’s review of the Compensation
Committee’s recommendations, the Compensation Committee shall have the final
authority to determine any Incentive Bonus actually payable to Executive
hereunder, subject to the terms and conditions of this Agreement and the
Incentive Bonus Plan.

 

(c)                                  The Parent shall issue to Executive an
option to acquire up to 45,000 shares of the Parent’s common stock effective as
of the Effective Date, under the terms of the Incentive Plan.  The per-share
exercise price of the options shall be determined as of the Effective Date,
pursuant to the terms of the Incentive Plan and such options shall be vested as
of any date with respect to 6.25% of the covered shares, multiplied by the sum
of one plus the number of the Company’s full fiscal quarters that have lapsed
since the option grant date as of such date.  Any determinations of future
grants under the Incentive Plan shall be made in the sole discretion of the
Compensation Committee and nothing in this Agreement shall be construed so as to
entitle Executive to any such awards.

 

(d)                                 Except as otherwise specifically provided to
the contrary in this Agreement, Executive shall be provided with pension and
welfare fringe benefits to the same extent and on the same terms as those
benefits are provided by the Company from time to time to the Company’s other
senior management employees and Executive shall be entitled to no less than four
weeks’ vacation for each calendar year, no more than two weeks of which may be
taken together, without the prior consent of the CEO.  Executive shall be
reimbursed for attorney registration fees for the State of Illinois, bar and
committee dues for one bar association and one bar committee.  In addition,
Executive shall be covered by Parents director and officer and errors and
omissions insurance coverages on the same terms and conditions as other
executives of the Company and Parent.

 

(e)                                  Executive shall be reimbursed by the
Company, on terms and conditions that are substantially similar to those that
apply to other similarly situated senior management employees of the Company,
for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging
and similar items which are consistent

 

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with the Company’s expense reimbursement policy and actually incurred by
Executive in the promotion of the Company’s business.

 

(f)                                    Executive shall be entitled, if
applicable, to the “Gross-Up Payment” as described in Exhibit B, which is
attached hereto and which forms a part of this Agreement.

 

5.                                       Rights and Payments Upon Termination. 
Executive’s right to benefits and payments, if any, for periods after the date
on which Executive’s employment with the Company and its affiliates terminates
for any reason (the “Termination Date”) shall be determined in accordance with
this Section 5:

 

(a)                                  Minimum Payments.  If Executive’s
Termination Date occurs during the Employment Period for any reason, Executive
shall be entitled to the following payments, in addition to any payments or
benefits to which Executive may be entitled under the following provisions of
this Section 5 (other than this paragraph 5(a)) or the express terms of any
employee benefit plan or as required by law:

 

(i)                                     Executive’s earned but unpaid Annual
Base Salary for the period ending on Executive’s Termination Date;

 

(ii)                                  Executive’s earned but unpaid Incentive
Bonus for the prior fiscal year;

 

(iii)                               Executive’s accrued but unpaid vacation pay
for the period ending with Executive’s Termination Date, as determined in
accordance with the Company’s policy as in effect from time to time;

 

(iv)                              Executive’s unreimbursed business expenses and
all other items earned and owed to Executive through and including the
Termination Date; and

 

(v)                                 the Gross-Up Payment, if applicable, to the
extent provided by Exhibit B.

 

Payments to be made to Executive pursuant to this paragraph 5(a) shall be made
within 30 days after Executive’s Termination Date.  Except as may be otherwise
expressly provided to the contrary in this Agreement or as otherwise provided by
law, nothing in this Agreement shall be construed as requiring Executive to be
treated as employed by the Company following Executive’s Termination Date for
purposes of any employee benefit plan or arrangement in which Executive may
participate at such time.

 

(b)                                 Termination By Company for Cause.  If
Executive’s Termination Date occurs during the Employment Period and is a result
of the Company’s termination of Executive’s employment on account of Cause (as
defined in paragraph 5(f) below), then, except as described in paragraph 5(a) or
as agreed in writing between Executive and the Company, Executive shall have no
right to payments or benefits under this Agreement (and the Company shall have
no obligation to

 

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make any such payments or provide any such benefits) for periods after
Executive’s Termination Date.

 

(c)                                  Termination for Death or Disability.  If
Executive’s Termination Date occurs during the Employment Period and is a result
of Executive’s death or Disability (as defined in paragraph 5(f) below), then,
except as described in paragraph 5(a) or as agreed in writing between Executive
and the Company, Executive (or in the event of Executive’s death, Executive’s
estate) shall be entitled to the following:

 

(i)                                     continuing payments of Executive’s
Annual Base Salary (payable in accordance with paragraph 4(a)) for the
Continuation Period (as defined below);

 

(ii)                                  continuation of health benefits for
Executive and Executive’s “qualified beneficiaries,” as defined in Section 4980B
of the Internal Revenue Code of 1986, as amended (“COBRA”) for the Continuation
Period at a cost which is no greater than is charged to active employees of the
Company and their dependents, which continuing health benefits shall be provided
only if Executive and Executive’s qualified beneficiaries, as applicable, make a
timely and proper election to be covered under COBRA;

 

(iii)                               immediate vesting of any and all stock
options, shares of restricted stock, restricted stock units and other unvested
incentive awards then held by Executive; and

 

(iv)                              a lump sum payment equal to the Target
Incentive Bonus for the year in which the Termination Date occurs, prorated (on
a daily basis) through Executive’s Termination Date.

 

For purposes of this Agreement, the “Continuation Period” shall be the period
commencing on Executive’s Termination Date and ending on the earlier of (A) the
first anniversary of Executive’s Termination Date, or (B) if applicable, the
date on which Executive violates the provisions of Sections 6 or 7 of this
Agreement.  All lump sum payments required under this paragraph 5(c) shall be
made no later than 15 days after the Termination Date.

 

(d)                                 Certain Terminations by the Company or
Executive.  If Executive’s Termination Date occurs during the Employment Period
and is a result of Executive’s termination of employment (i) by the Company for
any reason other than Cause (and is not on account of Executive’s death,
Disability, or voluntary resignation, the mutual agreement of the parties or
pursuant to paragraph 5(e)), (ii) by Executive following the Company’s breach of
this Agreement in any material respect and failure to cure the breach within 30
days after notice thereof from Executive, or (iii) by Executive within 60 days
after Executive’s principal place of employment with the Company is relocated
outside of the greater Chicago

 

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metropolitan area, then, except as described in paragraph 5(a) or as agreed in
writing between Executive and the Company, Executive shall be entitled to the
following payments and benefits:

 

(i)                                     continuing payments of Executive’s
Annual Base Salary (payable in accordance with paragraph 4(a)) for the
Continuation Period;

 

(ii)                                  continuation of health benefits for
Executive and Executive’s qualified beneficiaries for the Continuation Period at
a cost which is no greater than is charged to active employees of the Company
and their dependents, which continuing health benefits shall be provided only if
Executive and Executive’s qualified beneficiaries, as applicable, make a timely
and proper election to be covered under COBRA;

 

(iii)                               a lump sum payment equal to the Target
Incentive Bonus for the year in which the Termination Date occurs; and

 

(iv)                              the additional vesting, as of the Termination
Date, of any and all stock options, shares of restricted stock, restricted stock
units and other unvested incentive awards then held by Executive as if the
Executive had completed one additional year of service as of the Termination
Date.

 

All lump sum payments required under this paragraph 5(d) shall be made within 15
days after the Termination Date.  Notice by the Company that the term of this
Agreement will not be renewed, and any subsequent termination of Executive’s
employment at the end of the Employment Period, will not result in Executive
being eligible for any payments or benefits contemplated by this paragraph
5(d).  If Executive is entitled to payments and benefits pursuant to Exhibit A,
he shall not also be entitled to payments and benefits under this paragraph
5(d).

 

(e)                                  Termination for Voluntary Resignation,
Mutual Agreement or Other Reasons.  If Executive’s Termination Date occurs
during the Employment Period and is a result of Executive’s voluntary
resignation, the mutual agreement of the parties, or any reason other than those
specified in paragraphs (b), (c), or (d) above or Exhibit A, then, except as
described in paragraph 5(a) or as agreed in writing between Executive and the
Company, Executive shall have no right to payments or benefits under this
Agreement (and the Company shall have no obligation to make any such payments or
provide any such benefits) for periods after Executive’s Termination Date.

 

(f)                                    Definitions.  For purposes of this
Agreement:

 

(i)                                     the term “Cause” shall mean (A) the
continuous failure by Executive to substantially perform Executive’s duties
under this Agreement, as determined by the CEO and/or the Board and after
expiration of a cure

 

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period of 30 days following Executive’s receipt of written notice from the CEO
and/or the Board describing such failure; (B) the willful engaging by Executive
in conduct which is demonstrably and materially injurious to the Company or its
affiliates, monetarily or otherwise, as determined by the CEO and/or the Board,
(C) conduct by Executive that involves theft, fraud or dishonesty, (D) repeated
instances of drug or alcohol abuse or unauthorized absences during scheduled
work hours, (E) the Executive’s having been convicted of, or having pled guilty
or no contest to, a felony, or (F) Executive’s violation of the provisions of
Section 6 or 7 of this Agreement; and

 

(ii)                                  the term “Disability” shall mean the
inability of Executive to continue to perform Executive’s duties under this
Agreement on a full-time basis as a result of mental or physical illness,
sickness or injury for a period of 120 days within any 12-month period, as
determined in the discretion of the CEO and/or the Board.

 

Notwithstanding any other provision of this Agreement, Executive shall
automatically cease to be an officer of the Parent, the Company and their
respective affiliates as of Executive’s Termination Date and, to the extent
permitted by applicable law, any and all monies that Executive owes to the
Company shall be repaid to the extent possible, through deduction of such
amounts from any post-termination payments owed to Executive pursuant to this
Agreement.  Notwithstanding any other provision of this Agreement, the Company
may suspend Executive from performing Executive’s duties under this Agreement; 
provided, however, that during the period of suspension (which shall end no
later than Executive’s Termination Date), Executive shall continue to be treated
as an employee of the Company for other purposes, and Executive’s rights to
compensation or benefits hereunder shall be in effect.  Other than as expressly
provided in paragraphs 5(c) and (d), post-termination benefits may not be
suspended or not paid.

 

6.                                       Confidential Information.  Executive
agrees that:

 

(a)                                  Except as may be required by the lawful
order of a court or agency of competent jurisdiction, or except to the extent
that Executive has express authorization from the Company, Executive agrees to
keep secret and confidential indefinitely all non-public information (including,
without limitation, information regarding litigation and pending litigation)
concerning the Company and its affiliates (collectively, “Confidential
Information”) which was acquired by or disclosed to Executive during the course
of Executive’s employment with the Company and not to disclose the same, either
directly or indirectly, to any other person, firm, or business entity, or to use
it in any way.

 

(b)                                 Confidential Information does not include
(i) information which, at the time of disclosure is published, known publicly or
is otherwise in the public domain, through no fault of Executive; (ii)
information which, after disclosure is published

 

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or becomes known publicly or otherwise becomes part of the public domain,
through no fault of Executive; and (iii) information which is required to be
disclosed in compliance with applicable laws or regulations or by order of a
court or other regulatory body of competent jurisdiction.

 

(c)                                  To the extent that any court or agency
seeks to have Executive disclose Confidential Information, Executive shall
promptly inform the Company, and Executive shall take such reasonable steps to
prevent disclosure of Confidential Information until the Company has been
informed of such requested disclosure, and the Company has an opportunity to
respond to such court or agency.  To the extent that Executive obtains
information on behalf of the Company or any of its affiliates that may be
subject to attorney-client privilege as to the Company’s attorneys, Executive
shall follow the guidelines provided by the Company’s legal counsel on
maintaining the confidentiality of such information and to preserve such
privilege.

 

(d)                                 Nothing in the foregoing provisions of this
Section 6 shall be construed so as to prevent Executive from using, in
connection with Executive’s employment for himself or an employer other than the
Company and its affiliates, knowledge which was acquired by Executive during the
course of Executive’s employment with the Company and its affiliates and which
is generally known to persons of Executive’s experience in other companies in
the same industry.

 

7.                                       Noncompetition and Nonsolicitation. 
While Executive is employed by the Company and its affiliates, and for a period
of 1 year after Executive’s Termination Date (except as provided in Exhibit A),
Executive agrees that:

 

(a)                                  Executive will not, directly or indirectly
engage in, assist, perform services for, establish or open, or have any equity
interest (other than ownership of 5% or less of the outstanding stock of any
corporation listed on the New York or American Stock Exchange or included in the
National Association of Securities Dealers Automated Quotation System) in any
person, firm, corporation, partnership or business entity (whether as an
employee, officer, partner, director, agent, security holder, creditor,
consultant, or otherwise) that engages in the Restricted Business (as defined
below) in the Restricted Territory (as defined below);

 

(b)                                 Executive will not, directly or indirectly,
for himself or on behalf of or in conjunction with any other person, firm,
corporation, partnership or business entity, solicit or attempt to solicit any
party who is then or, during the 12-month period prior to such solicitation or
attempt by Executive was (or was solicited to become), a customer of the
Company, provided that the restriction in this paragraph 7(b) shall not apply to
any activity on behalf of a business that is not a Restricted Business; and

 

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(c)                                  Executive will not (and will not attempt
to) solicit, entice, persuade or induce any individual who is employed by the
Company or its affiliates to terminate or refrain from renewing or extending
such employment or to become employed by or enter into contractual relations
with any other individual or entity other than the Company or its affiliates,
and Executive shall not approach any such employee for any such purpose or
authorize or knowingly cooperate with the taking of any such actions by any
other individual or entity.

 

For purposes of this Agreement the term (A) “Restricted Business” means the
business of providing wireless telecommunication services or any other business
in which the Company is materially engaged on Executive’s Termination Date, and
(B) “Restricted Territory” means the basic trading areas (as defined in the Rand
McNally Commercial Atlas and Marketing Guide or the successor thereto) (“BTA”)
set forth in Exhibit C hereto in which the Company has been granted the right to
carry on the Restricted Business, or any other BTA in which the Company has been
granted the right to carry on the Restricted Business as of Executive’s
Termination Date.

 

8.                                       Equitable Remedies.  Executive
acknowledges that the Company would be irreparably injured by a violation of
Sections 6 or 7 hereof and Executive agrees that the Company, in addition to any
other remedies available to it for such breach or threatened breach, shall be
entitled to a preliminary injunction, temporary restraining order, or other
equivalent relief, restraining Executive from any actual or threatened breach of
either Section 6 or 7.  If a bond is required to be posted in order for the
Company to secure an injunction or other equitable remedy, the parties agree
that said bond need not be more than a nominal sum.

 

9.                                       Notices.  Any notices provided for in
this Agreement shall be in writing and shall be deemed to have been duly
received when delivered in person or sent by facsimile transmission, on the
first business day after it is sent by air express courier service or on the
second business day following deposit in the United States registered or
certified mail, return receipt requested, postage prepaid and addressed, in the
case of Executive, to the most recent home address reflected in the Company’s
records and, in the case of the Company, to its principal executive offices, or
such other address as either party may have furnished to the other in writing in
accordance herewith, except that a notice of change of address shall be
effective only upon actual receipt.  In addition, on and after Executive’s
Termination Date, the Company shall notify Executive of the person or persons
Executive should contact regarding matters relating to this Agreement (and the
address and telephone number of such person or persons) and any changes to such
contact information.  All notices pursuant to the preceding sentence shall be
given in accordance with this Section 9.

 

10.                                 Withholding.  All compensation payable under
this Agreement shall be subject to customary withholding taxes and other
employment taxes as may be required with respect to compensation paid by a
corporation to an employee and the amount of compensation payable hereunder
shall be reduced appropriately to reflect the amount of any required
withholding.

 

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Except as specifically required herein, the Company shall have no obligation to
make any payments to Executive or to make Executive whole for the amount of any
required taxes.

 

11.                                 Successors.  This Agreement shall be binding
on, and inure to the benefit of, the Company and its successors and assigns and
any person acquiring, whether by merger, reorganization, consolidation, by
purchase of assets or otherwise, all or substantially all of the assets of the
Company.  To the extent applicable, this Agreement shall be binding on, and
inure to the benefit of, the Parent and its successors and assigns and any
person acquiring, whether by merger, reorganization, consolidation, by purchase
of assets or otherwise, all or substantially all of the assets of the Parent.

 

12.                                 Nonalienation.  The interests of Executive
under this Agreement are not subject to the claims of Executive’s creditors,
other than the Company, and may not otherwise be voluntarily or involuntarily
assigned, alienated or encumbered.

 

13.                                 Waiver of Breach.  The waiver by the
Company, the Parent or Executive of a breach of any provision of this Agreement
shall not operate as or be deemed a waiver by such party of any subsequent
breach.  Continuation of payments hereunder by the Company following a breach by
Executive of any provision of this Agreement shall not preclude the Company from
thereafter terminating said payments based upon the same violation.

 

14.                                 Severability.  It is mutually agreed and
understood by the parties that should any of the agreements and covenants
contained herein be determined by any court of competent jurisdiction to be
invalid by virtue of being vague or unreasonable, including but not limited to
the provisions of Sections 6 or 7, then the parties hereto consent that this
Agreement shall be amended retroactive to the date of its execution to include
the terms and conditions said court deems to be reasonable and in conformity
with the original intent of the parties and the parties hereto consent that
under such circumstances, said court shall have the power and authority to
determine what is reasonable and in conformity with the original intent of the
parties to the extent that said covenants and/or agreements are enforceable.

 

15.                                 Prevailing Party.  In the event of any
action, proceeding or litigation (collectively, the “Action”) between the
parties arising out of or in relation to this Agreement, the prevailing party in
such Action, shall be entitled to recover, in addition to any damages,
injunctions, or other relief and without regard to whether the Action is
prosecuted to final appeal, all of its costs and expenses including, without
limitation, reasonable attorney’s fees, from the non-prevailing party.

 

16.                                 Applicable Law.  This Agreement shall be
construed in accordance with the laws of the State of Illinois, without regard
to conflict of law principles.

 

17.                                 Amendment.  This Agreement may be amended or
cancelled by mutual Agreement of the parties in writing without the consent of
any other person.

 

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18.                                 Counterparts.  This Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.  Each counterpart may consist of a copy
hereof containing multiple signature pages, each signed by one party hereto, but
together signed by both of the parties hereto.

 

19.                                 Other Agreements.  This Agreement
constitutes the sole and complete Agreement between or among the Company, the
Parent and Executive and supersedes all other prior or contemporaneous
agreements, both oral and written, between or among the Company, the Parent and
Executive with respect to the matters contained herein including, including
without limitation, any prior employment agreements and any severance agreements
or arrangements between or among the parties. No verbal or other statements,
inducements, or representations have been made to or relied upon by Executive.
The parties have read and understand this Agreement.

 

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IN WITNESS THEREOF, Executive has hereunto set Executive’s hand, and the Company
has caused these presents to be executed in its name and on its behalf, all as
of the day and year first above written.

 

 

iPCS Wireless, Inc.

 

 

 

 

 

By:

/s/ Timothy M. Yager

 

 

 

 

Its: President and Chief Executive Officer

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Edmund L. Quatmann, Jr.

 

 

Edmund L. Quatmann, Jr.

 

IN WITNESS THEREOF, the Parent has caused these presents to be executed in its
name and on its behalf, all as of the day and year first above written, for the
limited purposes specified herein.

 

 

iPCS, Inc.

 

 

 

 

 

By:

/s/ Timothy M. Yager

 

 

 

 

Its: President and Chief Executive Officer

 

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Exhibit A

 

Change in Control

 

The provisions of this Exhibit A shall apply if Executive’s Termination Date (i)
occurs during the Employment Period, (ii) occurs on or within the one year
period after the effective date of a Change in Control and (iii) is a result of
the termination of Executive’s employment by the Company (or its successor) for
any reason other than Cause or is a result of Executive’s termination of his
employment with the Company (or its successor) for Good Reason (as defined in
Section 2 of this Exhibit A).

 

1.                                       Benefits and Payments on Termination. 
If the provisions of this Exhibit A apply, then Executive shall be entitled to
the following payments and benefits (in addition to any payments and benefits to
which he is entitled under paragraph 5(a) of the Agreement and the following
provisions of this Exhibit A):

 

(a)                                  a lump sum payment equal to 100% of
Executive’s Annual Base Salary;

 

(b)                                 continuation of health benefits for
Executive and Executive’s qualified beneficiaries for period beginning on the
Termination Date and ending on the first anniversary of the Termination Date at
a cost which is no greater than is charged to active employees of the Company
and their dependents, which continuing health benefits shall be provided only if
Executive and Executive’s qualified beneficiaries, as applicable, make a timely
and proper election to be covered under COBRA;

 

(c)                                  a lump sum payment equal to one times
Executive’s Target Incentive Bonus for the year in which the Termination Date
occurs;

 

(d)                                 immediate vesting of any and all stock
options, restricted stock units, shares of restricted stock or other incentive
awards held by Executive; and

 

(e)                                  an amount equal to the Target Incentive
Bonus that would have been payable to Executive for the fiscal year in which the
Termination Date occurs assuming all applicable performance targets had been
satisfied, pro rated (on a daily basis) through Executive’s Termination Date.

 

Payments to be made to Executive pursuant to this Section 1 shall be made no
later than 15 days after Executive’s Termination Date.

 

2.                                       Definition of Good Reason.  For
purposes of this Agreement, the term “Good Reason” means the occurrence of any
of the following in anticipation of or within the one year period immediately
following a Change in Control: (a) the assignment to Executive of duties that
are materially inconsistent with Executive’s duties described in Section 3 of
the Agreement,

 

1

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including, without limitation, a material diminution or reduction in Executive’s
office or responsibilities or a reduction in Executive’s rate of Annual Base
Salary, bonus opportunity or other compensation or an adverse change in
Executive’s reporting relationship, (b) the relocation of Executive to a
location that is not within 35 miles of Executive’s then current principal place
of business and more than 35 miles from Executive’s principal residence, or (c)
the failure of the Company to continue in effect any of the Company’s annual and
long-term incentive compensation plans or employee benefit or retirement plans,
policies, practices, or other compensation arrangements in which Executive
participates (other than equity-based compensation arrangements) unless such
failure to continue the plan, policy, practice or arrangement (i) is required by
law, or (ii) pertains to all plan participants generally and the lost value is
being replaced by a new plan, policy, practice or arrangement of reasonably
equivalent value.

 

3.                                       Exercisability of Stock Options.  With
respect to terminations to which this Exhibit A apply, the Parent agrees that
for purposes of determining the exercisability of Executive’s stock options
under the Incentive Plan outstanding on the Termination Date, subject to the
terms of the Incentive Plan and the option agreements thereunder, options shall
remain exercisable through the fifth anniversary of the Change in Control event,
the Parent agrees to take any and all actions necessary, if any, to ensure that
the Incentive Plan reflects the foregoing and the Parent agrees that each option
agreement evidencing the options outstanding under the Incentive Plan shall
reflect the foregoing.  Nothing in this Section 3 shall be deemed to extend the
expiration date of any stock option granted under the Incentive Plan past the
original expiration date of such option as determined at the time of grant.

 

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Exhibit B

 

Gross-Up Payment

 

Subject to the provisions of this Exhibit B, Executive shall be eligible for the
benefits described in this Exhibit B, and shall be subject to the terms of this
Exhibit B, regardless of whether Executive is employed by the Company on or
after the occurrence of a Change in Control and, if Executive’s Termination Date
shall have occurred, regardless of the reason for such termination.

 

1.                                       Gross-Up Payment.  In the event it
shall be determined that any payment, benefit or distribution (or combination
thereof) from the Company, any affiliate, or trusts established by the Company
or by any affiliate, for the benefit of its employees, to Executive or for
Executive’s benefit (whether paid or payable or distributed or distributable
pursuant to the terms of the Agreement or otherwise, and with a “payment”
including, without limitation, the vesting of an option, restricted stock units,
shares of restricted stock or other non-cash benefit or property) (any of which
are referred to as a “Payment”) would be subject to the excise tax imposed by
section 4999 of the Code, or any interest or penalties are incurred by Executive
with respect to such excise tax (such excise tax, together with any such
interest and penalties, hereinafter collectively referred to as the “Excise
Tax”), Executive shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that, after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes and payroll taxes (and any
interest and penalties imposed with respect thereto) and the Excise Tax imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the sum of: (a) the Excise Tax imposed upon the Payments; plus (b) an
amount equal to the product of any deductions disallowed for federal, state, or
local income tax purposes because of the inclusion of the Gross-up Payment in
Executive’s adjusted gross income multiplied by the highest applicable marginal
rate of federal, state, or local income taxation, respectively, for the calendar
year in which the Gross-up Payment is to be made.

 

2.                                       Determinations Relating to Gross-Up
Payment.  All determinations required to be made under this Exhibit B, including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by the nationally recognized certified public accounting firm that
performed the last annual audit of the Company in the normal course of business
immediately prior to the Change in Control (the “Accounting Firm”), which shall
provide detailed supporting calculations both to the Company and Executive
within fifteen (15) business days of the receipt of notice from the Company that
there has been a Payment, or such earlier time as is requested by the Company. 
All fees and expenses of the Accounting Firm shall be borne solely by the
Company.  Any Gross-Up Payment, as determined pursuant to this Exhibit B shall
be paid by the Company to Executive within fifteen (15) days after the receipt
of the Accounting Firm’s determination.  If the Accounting Firm determines that
no Excise Tax is payable by Executive, it shall so indicate to Executive in
writing.  Any determination by the Accounting Firm shall be binding upon the
Company and Executive.  As a result of the uncertainty in the application of

 

1

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section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder.  In the event that the
Company exhausts its remedies pursuant to Section 3 of this Exhibit B and
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be paid by the Company to Executive or for
Executive’s benefit within five (5) days after such determination is made.

 

3.                                       Notification of Claim.  Executive shall
notify the Company in writing of any claim by the Internal Revenue Service that,
if successful, would require the payment by the Company of the Gross-Up
Payment.  Such notification shall be given as soon as practicable but no later
than ten (10) business days after Executive is informed in writing of such claim
and shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid.  Executive shall not pay such claim prior to
the expiration of the thirty (30) day period following the date on which he
gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due).  If the Company
notifies Executive in writing prior to the expiration of such period that it
desires to contest such claim, Executive shall:

 

(a)                                  give the Company any information requested
by the Company relating to such claim;

 

(b)                                 take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company;

 

(c)                                  cooperate with the Company in good faith in
order to effectively contest such claim; and

 

(d)                                 permit the Company to participate in any
proceedings relating to such claim;

 

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.  Without limiting the foregoing provisions of
this Section 3, the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative

 

2

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tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to Executive, on an interest-free basis, and
shall indemnify and hold Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and provided, further, that if Executive is required to
extend the statute of limitations to enable the Company to contest such claim,
Executive may limit this extension solely to such contested amount.  The
Company’s control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

 

4.                                       Refunds.  If, after the receipt by
Executive of an amount advanced by the Company pursuant to Section 3, Executive
becomes entitled to receive any refund with respect to such claim, Executive
shall promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto).  If, after
the receipt by Executive of an amount advanced by the Company pursuant to
Section 3, a determination is made that Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

 

3

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Exhibit C

 

Basic Trading Areas

 

Illinois

Bloomington, IL

BTA#

46

 

 

Champaign,Urbana, IL

BTA#

71

 

 

Clinton, IA-Sterling, IL

BTA#

86

 

 

Danville, IL

BTA#

103

 

 

Davenport, IA-Moline, IL

BTA#

105

 

 

Decatur-Effingham, IL

BTA#

109

 

 

Galesburg, IL

BTA#

161

 

 

Jacksonville, IL

BTA#

213

 

 

Kankakee, IL

BTA#

225

 

 

LaSalle-Peru-Ottawa-Streator, IL

BTA#

243

 

 

Mattoon,IL

BTA#

286

 

 

Mt. Vernon-Centralia, IL

BTA#

308

 

 

Peoria, IL

BTA#

344

 

 

St. Louis, MO (Macoupin County, IL only)

BTA#

394

 

 

Springfield, IL

BTA#

426

 

 

 

 

 

 

Nebraska

Omaha, NE (partial)*

BTA#

332

 

 

Lincoln, NE (partial)*

BTA#

256

 

 

Hastings, NE

BTA#

185

 

 

Norfolk, NE

BTA#

323

 

 

Grand Island-Kearney, NE

BTA#

167

 

 

 

 

 

 

Iowa

Fort Dodge, IA

BTA#

150

 

 

Waterloo-Cedar Falls, IA

BTA#

462

 

 

Dubuque, IA

BTA#

118

 

 

Burlington, IA

BTA#

61

 

 

Ottumwa, IA

BTA#

337

 

 

Des Moines, IA (partial)*

BTA#

111

 

 

Marshalltown, IA

BTA#

283

 

 

Mason City, IA

BTA#

285

 

 

Cedar Rapids, IA

BTA#

70

 

 

Iowa City, IA

BTA#

205

 

 

 

 

 

 

Michigan

Traverse City, MI

BTA#

446

 

 

Saginaw-Bay City, MI

BTA#

390

 

 

Muskegon, MI

BTA#

310

 

 

Grand Rapids, MI

BTA#

169

 

 

Mount Pleasant, MI

BTA#

307

 

 

Lansing, MI (partial)*

BTA#

241

 

 

Battle Creek, MI (partial)*

BTA#

33

 

 

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