exv10w19



 





Exhibit 10.19




EMPLOYMENT AGREEMENT




          This Employment Agreement, dated as of November 16, 2004, and as amended October 30, 2007,
(the “Agreement”) is made by and between USA Mobility, Inc., a Delaware corporation, (the
“Company”) and Vincent D. Kelly (the “Executive”).




          WHEREAS, in connection with the transactions contemplated by the Agreement and Plan of Merger
by and among Wizards-Patriots Holdings, Inc., Metrocall Holdings, Inc., Wizards Acquiring Sub,
Inc., Arch Wireless, Inc. and Patriots Acquiring Sub, Inc. dated as of March 29, 2004, as amended
(the “Merger Agreement”) the Company desires to employ the Executive and the Executive desires to
be employed by the Company.




          NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth
in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:





	1.	 	Employment. The Company shall employ the Executive as the Chief Executive Officer and
President of the Company based upon the terms and conditions set forth in this Agreement, for
the period of time specified in Section 3. In such positions, the Executive shall report
directly and exclusively to the Board of Directors of the Company (the “Board”).
	 
	2.	 	Duties and Authority. During the term of this Agreement, as the Chief Executive
Officer and President of the Company, under the direction and subject to the control of the
Board (which direction shall be such as is customarily exercised over a chief executive
officer of a public company), the Executive shall be responsible for the business, affairs,
properties and operations of the Company, and shall have general executive charge, management
and control of the Company, with all such powers and authority with respect to such business,
affairs, properties, and operations as may be reasonably incident to such duties and
responsibilities, and shall perform such other duties for the Company as the Board may
determine from time to time. The Executive shall devote the Executive’s reasonable best
efforts and full business time, energies and talents to the performance of the Executive’s
duties and the advancement of the business and affairs of the Company.
	 
	3.	 	Term. The term of this Agreement and the period of employment of the Executive by the
Company hereunder (the “Agreement Term”) shall commence on the Effective Time (as defined in
the Merger Agreement) (the “Effective Date”) and shall end on a date three (3) years from the
Effective Date (the “Third Anniversary”), unless earlier terminated pursuant to Section 7
herein; provided that the Agreement Term shall be automatically extended for additional one
(1) year periods on each anniversary of the Third Anniversary, unless and until either party
provides non-renewal Notice to the other party not less than ninety (90) days before such
anniversary date that such party is terminating this Agreement, which termination shall be
effective as of the end of such initial Agreement Term or extended term, as the case may be
(the “Expiration Date”), or until sooner terminated as hereinafter set forth.




 









 






	4.	 	Compensation and Expenses.
	 
	(a)	 	Base Salary. In consideration for the Executive’s services and subject to the terms
and conditions of this Agreement, the Company shall pay to the Executive an annual base salary
(the “Base Salary”) equal to Six Hundred Thousand Dollars ($600,000), commencing as of the
Effective Date. The Base Salary shall be payable biweekly or in such other installments as
shall be consistent with the Company’s payroll procedures. The Company shall deduct and
withhold all necessary social security and withholding taxes and any other similar sums
required by law or authorized by the Executive with respect to the payment of the Base Salary.
The Board shall review the Base Salary annually before December 31 and may, in its discretion,
increase, but not decrease, his Base Salary in any renewal, extension or replacement of this
Agreement. The Board shall also review the appropriateness of creating additional forms of
nonqualified executive compensation to cover the Executive.
	 
	(b)	 	Annual Bonus. With respect to the remainder of 2004, the Executive shall be entitled
to a minimum bonus payment of $530,000, payable in February 2005; provided that Metrocall
Holdings, Inc. achieves certain targets for free cash flow on a standalone basis set by the
Compensation Committee of the Board of Directors Metrocall Holdings, Inc. in November 2003 (as
set forth on Exhibit A attached hereto). For years after 2004, the Executive shall be eligible
for an annual bonus equal to a maximum of 200% of Base Salary based on achievement of certain
bonus targets set by the Board or a committee thereof (the “Annual Bonus”); provided that the
Executive is employed by the Company on December 31 of each calendar year. Such Annual Bonus
shall be paid between January 1 and March 15 of the next following year.
	 
	(c)	 	Benefits. To the maximum extent permitted by applicable state and federal law, the
Executive shall be eligible, at no cost to the Executive, to participate in all of the
Company’s benefit plans, including fringe benefits available to the Company’s senior
executives, as such plans or programs are in effect from time to time, and use of an
automobile.
	 
	(d)	 	Holidays and Vacation. The Executive shall be entitled to (i) time off for all public
holidays observed by the Company and (ii) vacation days in accordance with the applicable
policies for the Company’s senior executives as in effect from time to time.
	 
	(e)	 	Reimbursement of Expenses. The Company shall reimburse the Executive for all
reasonable expenses the Executive incurs in accordance with the reasonable policies and
procedures adopted from time to time by the Company.
	 
	5.	 	Confidential Information.
	 
	(a)	 	“Confidential Information” means any and all Company and Company subsidiary proprietary
information, technical data, patent applications, inventions or discoveries (whether
patentable or not), know-how and trade secrets, as well as operating, design and manufacturing
procedures disclosed to the Executive, including before the date of this Agreement.
“Confidential Information” further means, without limitation, research,




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	 	 	product development activities, processes, products, specifications, designs, diagrams,
illustrations, programs, concepts, ideas, marketing plans, proposals, financial information,
confidential reports, communications and customer lists and data, as well as the nature and
results of the Company’s and its subsidiaries’ research and development activities, and all
other materials and information related to the business or activities of the Company and its
subsidiaries that are not generally known to the public; provided, however, that the term
“Confidential Information” excludes information that (i) is or becomes generally available
to the public other than through acts by the Executive in violation of this Agreement, (ii)
was legally within the Executive’s possession prior to disclosure to the Executive by or on
behalf of the Company or its predecessor, which prior possession can be evidenced by the
Executive’s written records in existence prior to the effective date of any Prior Employment
Document, or (iii) becomes available to the Executive on a non-confidential basis from a
source other than the Company or a subsidiary or predecessor of the Company, provided that
such source is not bound by a confidentiality agreement with the Company or any of its
subsidiaries, or by any other contractual, legal or fiduciary obligation of confidentiality
to the Company or any of its subsidiaries, or any other party with respect to such
information.
	 
	(b)	 	Except as may be required by the lawful order of a court or agency of competent jurisdiction,
the Executive covenants and agrees that, during the Agreement Term and at all times
thereafter, the Executive will keep secret and confidential all Confidential Information, and
will not at any time, without the prior written consent of the Board or a person authorized by
the Board, publish or disclose any Confidential Information, either directly or indirectly, to
any third party, use for the Executive’s own benefit or advantage, or make available for
others to use (except to third parties in connection with possible transactions or business
with the Company).
	 
	(c)	 	To the extent that any court or agency seeks to have the Executive disclose Confidential
Information, the Executive shall promptly inform the Company, and shall take all reasonable
steps necessary to prevent disclosure of any 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 the Executive obtains information on behalf of the
Company or any of its subsidiaries that may be subject to attorney-client privilege as to the
Company’s attorneys, the Executive shall take reasonable steps necessary to maintain the
confidentiality of such information and to preserve such privilege.
	 
	(d)	 	The Executive acknowledges that the restrictions contained in Section 5(b) and 5(c) are
reasonable and necessary, in view of the nature of the Company’s business, in order to protect
the legitimate interests of the Company, and that any violation thereof would result in
irreparable injury to the Company. Therefore, the Executive agrees that in the event of a
breach or threatened breach by the Executive of the provisions of Section 5(b) and (c), the
Company shall be entitled to obtain from any court of competent jurisdiction, preliminary or
permanent injunctive relief restraining the Executive from disclosing or using any such
Confidential Information. The Executive also acknowledges that nothing in this Section 5 shall
be construed as limiting the Executive’s duty of loyalty to the
Company, or any other duty he may otherwise have to the Company, while he is employed by the
Company.




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	6.	 	Covenant Not to Compete. The Executive agrees that, through his position as Chief
Executive Officer and President of the Company and the various other positions with the
Company that he has held from time to time, the Executive has established and will continue to
establish valuable and recognized expertise in the paging business and has had and will have
access to the Company’s Confidential Information. The Executive hereby enters into a covenant
restricting the Executive from soliciting employees of the Company and its subsidiaries and
from competing against the Company upon the terms and conditions described below:
	 
	(a)	 	During the Executive’s employment and for a period of two (2) years after the Date of
Termination for any reason, the Executive shall not:






	 	(i)	 	induce or attempt to induce any employees of the Company or those of any of its
subsidiaries to terminate their employment, or refrain from renewing or extending such
employment, with the Company or such subsidiary in order to become an director,
officer, employee, consultant or independent contractor to or for any other individual
or entity other than the Company or its subsidiaries;
	 
	 	(ii)	 	at any time and in any state or other jurisdiction in the United States in
which the Company is engaged in business or has developed plans to engage in business:
(1) engage or be a part of any Person (including as a director, consultant, employee,
agent, or representative), or have any direct or indirect financial interest (whether
as a partner, shareholder, or owner) in any Person that engages in the business of
owning and operating narrowband one-way paging and wireless messaging networks, voice
mail services or data transmitting services (the “Business”); or (2) participate as an
employee or officer in any enterprise in which the Executive’s responsibility relates
to the Business;
	 
	 	(iii)	 	directly or indirectly own an equity interest in any Competitor (other than
ownership of 1% or less of the outstanding stock of any corporation listed on a
national stock exchange or included in the NASDAQ System). The term “Competitor” means
any Person a portion of the business of which (and during any period in which it
intends to enter into business activities that would be) is materially competitive in
any way with the Business of the Company; or
	 
	 	(iv)	 	solicit or cause or encourage any person to solicit any Business in competition
with the Company or a subsidiary from any Person who is a client of the Company or of a
subsidiary during the Executive’s employment hereunder.






	(b)	 	The Executive agrees that the restrictions set forth in this Section 6 are reasonable,
proper, and necessitated by legitimate business interests of the Company and do not constitute
an unlawful or unreasonable restraint upon the Executive’ ability to earn a livelihood. The
parties agree that in the event any of the restrictions in this Agreement, interpreted in
accordance with the Agreement as a whole, are found to be unreasonable a
court of competent jurisdiction, such court shall determine the limits allowable by law and
shall enforce the same. The parties further agree that nothing in this Section 6 shall be
construed as limiting the Executive’s duty of loyalty to the Company, or any other duty he
may otherwise have to the Company, while he is employed by the Company.




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	(c)	 	The Executive further acknowledges that it may be impossible to assess the monetary damages
incurred by the Executive’s violation of this Agreement, and that violation of this Agreement
will cause irreparable injury to the Company. Accordingly, the Executive agrees that the
Company will be entitled, in addition to all other rights and remedies that may be available,
to an injunction enjoining and restraining the Executive and any other involved party from
committing a violation of this Agreement.
	 
	7.	 	Termination. Notwithstanding any other provision of this Agreement, this Agreement
shall terminate upon the death of the Executive, or it may be terminated with thirty (30)
days’ written notice as follows:
	 
	(a)	 	The Company may terminate this Agreement:






	 	(i)	 	at any time if the Executive is Disabled (as defined below) for a period of six
(6) months or more;
	 
	 	(ii)	 	at any time with “Cause.” For purposes of this Agreement. “Cause” means (A)
dishonesty of a material nature that relates to the performance of services under this
Agreement; (B) criminal conduct (other than minor infractions and traffic violations)
that relates to the performance of services under this Agreement, (C) the Executive’s
willfully breaching or failing to perform his duties as described in Section 2 hereof
(other than any such failure resulting from the Executive’s being Disabled), 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 best interests of the Company. Notwithstanding
the foregoing, the Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Executive a certificate of a
resolution duly adopted by the affirmative vote of not less than seventy-five percent
(75%) 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 has engaged in the
conduct set forth in this paragraph and specifying the particulars thereof in detail;
or
	 
	 	(iii)	 	at any time without Cause upon Notice from the Company to the Executive, which
Notice shall be effective immediately or such later time as is specified in such
Notice.




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	(b)	 	The Executive may terminate this Agreement at any time upon sixty (60) days’ Notice to the
Company.
	 
	(c)	 	At any time by the mutual agreement of the parties. Any termination of the Executive’s
employment by mutual agreement of the parties shall be memorialized by written agreement
signed by the Executive and duly-appointed officers of the Company.
	 
	(d)	 	Any purported termination of the Executive’s 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 11. For purposes of this Agreement, a “Notice of Termination” shall mean a notice
that shall indicate the Date of Termination (which shall not be earlier than the date on which
such Notice is sent), the specific provision of this Agreement relied upon and that shall set
forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment. The “Date of Termination” means the last day the
Executive is employed by the Company hereunder (including any successor to the Company as
determined in accordance with Section 14). If the Executive becomes employed by the entity
into which the Company is merged, or the purchaser of substantially all of the assets of the
Company, or a successor to such entity or purchaser, the Executive shall not be treated as
having terminated employment for purposes of this Agreement until such time as the Executive
terminates employment with the successor (including, without limitation, the merged entity or
purchaser).
	 
	8.	 	Compensation Upon Termination.
	 
	(a)	 	Death. If the Executive’s employment is terminated by the Executive’s death, the
Company shall pay to the Executive’s estate, or as may be directed by the legal
representatives to such estate, (i) the Executive’s Base Salary in effect on the date
immediately prior to the Executive’s death, through the Executive’s date of death; (ii) all
other unpaid amounts, if any, to which the Executive is entitled as of the date of the
Executive’s death, under any Company fringe benefit or incentive compensation plan or program,
at the time such payments would otherwise ordinarily be due; and (iii) the Executive’s full
Base Salary that would have been payable to the Executive from the Executive’s date of death
through the Expiration Date, in a lump sum within forty-five (45) days after his death.
	 
	(b)	 	Disability. Following the use of all sick days to which the Executive is entitled
under the policies applicable to the Company’s senior executives, while he is Disabled until
the Date of Termination, the Company shall, in lieu of payment of his Base Salary, (i) pay the
Executive a disability benefit equal to 50% of the Base Salary that he would otherwise be
entitled to receive for the period in which he is Disabled; (ii) all other unpaid amounts, if
any, to which the Executive is entitled as of the Executive’s date of disability, under any
Company fringe benefit or incentive compensation plan or program,




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	 	 	at the time such payments are due; and (iii) the Executive’s full Base Salary that would
have been payable to the Executive from the Executive’s Date of Termination through the
Expiration Date, in a lump sum within forty-five (45) days after such Date of Termination;
provided, however, that any payments made to the Executive during the
Disability Period shall be reduced by any amounts paid or payable to the Executive under any
Company disability benefit plans. Subject to the terms of this Agreement, the Executive
shall not be required to perform services under this Agreement during any period that he is
Disabled. The Executive shall be considered Disabled during any period in which he has an
illness, or a physical or mental disability, or similar incapacity, that renders him
incapable, after reasonable accommodation, of performing his duties under this Agreement.
In the event of a dispute as to whether the Executive is Disabled, the Company may refer the
same to a licensed practicing physician of the Company’s choice, and the Executive agrees to
submit to such tests and examinations as such physician shall deem appropriate. During the
period in which the Executive is Disabled, the Company may appoint a temporary replacement
to assume the Executive’s responsibilities.
	 
	(c)	 	For Cause. If the Company terminates the Executive’s employment for Cause, the
Company shall pay the Executive’s Base Salary in effect on the date immediately prior to such
termination, through the date specified in the Notice of Termination and the Company shall
have no further obligations to the Executive under this Agreement.
	 
	(d)	 	Voluntary. If the Executive terminates his employment for other than Good Reason, the
Company shall pay the Executive the Executive’s Base Salary in effect on the date immediately
prior to such termination, through the date specified in the Notice of Termination. The
Company shall have no further obligations to the Executive under this Agreement.
	 
	 	 	“Good Reason” means the occurrence, without the Executive’s express written consent, of any
of the following circumstances:






	 	(i)	 	the Company’s failure to perform or observe any of the material terms or
provisions of this Agreement and the continued failure of the Company to cure such
default within fifteen (15) days after the Executive gives a written demand for
performance to the Company, which demand shall describe specifically the nature of such
alleged failure to perform or observe such material terms or provisions;
	 
	 	(ii)	 	the assignment to the Executive of any duties inconsistent with, or any
substantial diminution in, such Executive’s status or responsibilities as in effect on
the date hereof, including imposition of travel obligations that are materially greater
than is reasonably required by the Company’s business;
	 
	 	(iii)	 	a reduction in the Executive’s Base Salary as in effect on the date hereof, as
that amount may be increased from time to time; or (II) the failure to pay a bonus
award to which the Executive is otherwise entitled, at the time such bonuses are
usually paid;




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	 	(iv)	 	a change in the principal place of the Executive’s employment, as in effect on
the date hereof or as in effect after any subsequent change to which the Executive
consented in writing, to a location more than thirty-five (35) miles distant from the
location of such principal place;
	 
	 	(v)	 	the Company’s failure to continue in effect any incentive compensation plan or
stock option plan in which the Executive participates, unless the Company has provided
an equivalent alternative compensation arrangement (embodied in an ongoing substitute
or alternative plan) to the Executive, or (II) the Company’s failure to continue the
Executive’s participation in any such incentive or stock option plan on substantially
the same basis, both in terms of the amount of benefits provided and the level of the
Executive’s participation relative to other participants;
	 
	 	(vi)	 	the Company’s violation of any applicable criminal law not due to the
Executive’s gross negligence or willful misconduct;
	 
	 	(vii)	 	(vii) the failure of the Company or any successor to obtain a satisfactory
written agreement from any successor to assume and agree to perform this Agreement, as
contemplated in Section 14 below; or
	 
	 	(viii)	 	any purported termination of the Executive’s employment that is not effected pursuant
to a Notice of Termination satisfying the requirements of Sections 7(a)(ii) or 7(d), as
applicable. For purposes of this Agreement, no such purported termination shall be
effective except as constituting Good Reason.





          The Executive’s continued employment shall not constitute consent to, or a waiver of rights
with respect to, any circumstances constituting Good Reason hereunder.





	(e)	 	Other. If the Company terminates the Executive’s employment other than for Cause or
Disability or if the Executive terminates employment with the Company for Good Reason, the
Company shall pay the Executive:






	 	(i)	 	the Executive’s Base Salary through the date specified in the Notice of
Termination within ten (10) business days after such date and all other unpaid amounts,
if any, to which the Executive is entitled as of the date specified in the Notice of
Termination under any Company fringe benefit or incentive compensation plan or program,
at the time such payments are due;
	 
	 	(ii)	 	an amount equal to the product of (a) the greater of (x) two or (y) the number
of years (and fraction thereof) remaining in the Term as of the date specified in the Notice of Termination, times (b) the full Base Salary then in effect within forty-five
(45) days after such date specified in the Notice of Termination;
	 
	 	(iii)	 	an amount equal to the Annual Bonus paid or payable to the Executive with
respect to the annual period prior to the year in which the termination of the
Executive’s employment occurs;




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	 	(iv)	 	reimbursement of the cost of continuation coverage of group health coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for
the duration of the applicable period to the extent Executive elects such continuation
coverage and is eligible and subject to the terms of the plan and the law; and
	 
	 	(v)	 	full vesting of any equity compensation and the lapse of all restrictions with
respect to any restricted stock granted to the Executive.
	 
	 	(vi)	 	Gross-Up Payments. If any payment or the value of any benefit received
or to be received by the Executive in connection with the Executive’s termination or
contingent upon a Change of Control of the Company (whether received or to be received
pursuant to the terms of this Agreement (the “Agreement Payments”) or of any other
plan, arrangement, or agreement of the Company, its successors, any person whose
actions result in a Change of Control of the Company, or any person affiliated with any
of them (or which, as a result of the completion of the transactions causing a Change
of Control, will become affiliated with any of them (“Other Payments” and, together
with the Agreement Payments, the “Payments”)) would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax
Code”) or any comparable federal, state, or local excise tax (such excise tax, together
with any interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), as determined as provided below, the Company shall pay to the Executive
an additional amount (the “Gross-Up Payment”) such that the net amount the Executive
retains, after deduction of the Excise Tax on Agreement Payments and Other Payments and
any federal, state, and local income tax and Excise Tax upon the payment provided for
by Section 8 hereof, and any interest, penalties, or additions to tax payable by the
Executive with respect thereto shall be equal to the total present value of the
Agreement Payments and Other Payments at the time such Payments are to be made. The
intent of the parties is that the Company shall be solely responsible for and shall
pay, any Excise Tax on any Payments and Gross-Up Payment and any income and employment
taxes (including, without limitation, penalties and interest) imposed on any Gross-Up
Payments as well as any loss of deduction caused by the Gross-Up Payment.






	 	(2)	 	All determinations required to be made under this Section
8(e)(vi), including, without limitation, 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 determinations, shall be made by tax counsel
(either a law firm or a nationally recognized public accounting firm) selected
by the Company and reasonable acceptable to the Executive (“Tax Counsel”). The
Company shall cause the Tax Counsel to provide detailed supporting calculations
to the Company and the Executive within fifteen (15) business days after notice
is given by the Executive to the Company that any or all of the Payments have
occurred, or such earlier time as is requested by the Company. Within two (2)
business days after such notice is given to the Company, the Company shall
instruct the Tax




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	 	 	 	Counsel to timely provide the data required by this Section 8(e)(vi) to the
Executive. The Company shall pay all fees and expenses of the Tax Counsel.
The Company shall pay any Excise Tax determined pursuant to this Section
8(e)(vi) to the Internal Revenue Service (the “IRS”) and/or other
appropriate taxing authority on behalf of the Executive within five (5) days
after receipt of the Tax Counsel’s determination. If the Tax Counsel
determines that there is substantial authority (within the meaning of
Section 6662 of the Tax Code) that no Excise Tax is payable by the
Executive, the Tax Counsel shall furnish the Executive with a written
opinion that the failure to disclose or report the Excise Tax on the
Executive’s federal income tax return will not constitute a substantial
understatement of tax or be reasonably likely to result in the imposition of
a negligence or similar penalty. Any determination by the Tax Counsel shall
be binding upon the Company and the Executive in the absence of material
mathematical or legal error. As a result of the uncertainty in the
application of Section 4999 of the Tax Code at the time of the initial
determination by the Tax Counsel hereunder, it is possible that the Company
will not have made Gross-Up payments that should have been made or that it
will have made Gross-Up Payments that should not have been made, in each
case, consistent with the calculations required to be made hereunder. If the
Company exhausts its remedies pursuant to Section 8(e)(vi)(3) below and the
Executive is thereafter required to pay an Excise Tax, the Tax Counsel shall
determine the amount of underpayment of Excise Taxes that has occurred and
the Company shall promptly pay any such underpayment to the IRS or other
appropriate taxing authority on the Executive’s behalf or, if the Executive
has previously paid such underpayment, to the Executive. Such payment shall
in all events be paid within ninety (90) days after the Tax Counsel
determines that a payment is required. If the Tax Counsel determines that
an overpayment of Gross-Up payments has occurred, any such overpayment shall
be treated for all purposes as a loan to the Executive with interest at the
applicable federal rate provided in Section 7872(f)(2) of the Tax Code, due
and payable within ninety (90) days after written demand to the Executive by
the Company; provided, however, that the Executive shall have no duty or
obligation whatsoever to repay such loan if the Executive’s receipt of the
overpayment, or any portion thereof, is includible in the Executive’s income
and the Executive’s repayment of the same is not deductible by the Executive
for federal and state income tax purposes.
	 
	 	(3)	 	The Executive shall notify the Company, in writing of any claim
by the IRS or state or local taxing authority, that, if successful, would
result in any Excise Tax or an underpayment of Gross-Up Payments. Such notice
shall be given as soon as practicable but no later than fifteen (15) business
days after the Executive is informed in writing of the claim and shall inform
the Company of the nature of the claim, the administrative or judicial appeal
period, and the date on which any payment of the claim must be paid. The
Executive shall not pay any portion of the claim before




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	 	 	 	the expiration of the thirty (30) day period following the date on which the
Executive gives such notice to the Company (or such shorter period ending on
the date that any amount under the claim is due). If the Company notifies
the Executive in writing before the expiration of such thirty (30) day
period that it desires to contest the claim, the Executive shall:






	 	(A)	 	give the Company any information reasonably
requested by the Company relating to the claim;
	 
	 	(B)	 	take such action in connection with contesting
the claim as the Company shall reasonably request in writing from time
to time, including, without limitation, accepting legal representation
concerning the claim by an attorney selected by the Company who is
reasonably acceptable to the Executive; and
	 
	 	(C)	 	cooperate with the Company in good faith in
order to effectively contest the claim; provided, however, that the
Company shall bear and pay directly all costs and expenses (including,
without limitation, additional interest and penalties and attorneys’
fees) incurred in such contests and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income
tax (including, without limitation, interest and penalties thereon)
imposed as a result of such representation. Without limitation upon the
foregoing provisions of this Section 8(e)(vi)(3)(C), except as provided
below, the Company shall control all proceedings concerning such
contest and, in its sole opinion, may pursue or forgo any and all
administrative appeal, proceedings, hearings and conferences with the
taxing authority pertaining to the claim. At the Company’s written
request and upon payment to the Executive of an amount at least equal
to the claim plus any additional amount necessary to obtain the
jurisdiction of the appropriate tribunal and/or court, the Executive
shall pay the same and sue for a refund. The Executive agrees to
prosecute any contest of a claim to a determination before any
administrative 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 requests the Executive to pay the claim
and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis, and shall
indemnify and hold the Executive harmless on an after-tax basis, from
any Excise Tax or income tax (including, without limitation, interest
and penalties thereon) imposed on such advance or for any imputed
income on such advance. Any extension of the statute of limitations
relating to the assessment of any Excise Tax for the taxable year of
the Executive that is subject of the claim is to be limited solely to
the claim. Furthermore, the Company’s
control of the contest shall be limited to the issues for which a
Gross-Up Payment would be payable hereunder. The Executive shall be
entitled to settle or contest, as the case may be, any other issue
raised by the IRS or any other taxing authority.





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	 	(4)	 	If, after the Executive receives an amount the Company advanced
pursuant to Section 8(e)(vi)(3) above, the Executive receives any refund of a
claim and/or any additional amount that was necessary to obtain jurisdiction,
the 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 Executive receives an amount the Company advanced
pursuant to Section 8(e)(vi)(3) above, a determination is made that the
Executive shall not be entitled to any refund of the claim, and the Company
does not notify the Executive in writing of its intent to contest such denial
or refund of a claim before the expiration of the thirty (30) days after such
determination, then the portion of such advance attributable to a claim shall
be forgiven and shall not be required to be repaid. The amount of such advance
attributable to a claim shall offset, to the extent thereof, the amount of the
underpayment required to be paid by the Company to the Executive.
	 
	 	(5)	 	If, after the Company advances an additional amount necessary
to obtain jurisdiction, there is a final determination made by the taxing
authority that the Executive is not entitled to any refund of such amount, or
any portion thereof, then the Executive shall repay such nonrefundable amount
to the Company within thirty (30) days after the Executive receives notice of
such final determination. A final determination shall occur when the period to
contest or otherwise appeal any decision by an administrative tribunal or court
of initial jurisdiction has been waived or the time for contesting or appealing
the same has expired.






	 	 	 	“Change of Control” means the first to occur after the Effective Date of the
following: (i) any Person or group of Persons acting in concert, in a transaction or
a series of transactions, is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing more than fifty percent (50%)
of the combined voting power of the Company’s then outstanding securities that have
the right to vote for the election of directors generally (not including in such
securities beneficially owned by such Person any securities acquired directly from
or received through an exchange offer with the Company); or (ii) there is
consummated a merger, consolidation or other business combination (including an
exchange of securities with the security holder’s of a corporation that is a
constituent in such business combination) of the Company or any direct or indirect
subsidiary of the Company with any other corporation, other than a merger,
consolidation or business combination which would result in the voting securities of
the Company outstanding immediately prior to such merger, consolidation or business
combination continuing to represent at least a majority of the combined voting power
of the securities having the right to vote for the




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	 	 	 	election of directors generally of the Company or the surviving entity or any parent
thereof outstanding immediately after such merger, consolidation or business
combination (either by remaining outstanding or by being converted into or exchanged
for voting securities of the surviving entity or parent thereof) or (iii) there is
consummated an agreement for the sale, lease or other disposition by the Company of
all or substantially all of the Company’s assets, other than a sale, lease or other
disposition by the Company of all or substantially all of the Company’s assets to an
entity, at least a majority of the combined voting power of the outstanding
securities of which are owned by stockholders of the Company in substantially the
same proportions as their ownership of the Company immediately prior to such sale.
	 
	 	(vii)	 	Notwithstanding the foregoing, a “Change of Control” shall not be deemed to
have occurred by virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the stock (entitled to
vote for directors) of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in an
entity which owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.






	(f)	 	Six-Month Delay For Key Employees. Notwithstanding anything in this Agreement to the
contrary, if the Executive is a key employee of a publicly traded corporation under section
409A at the time of his separation from service and if payment of any amount under this
Agreement is required to be delayed for a period of six months after separation from service
pursuant to section 409A, payment of such amount shall be delayed as required by section 409A,
and the accumulated postponed amount shall be paid in a lump sum payment within 10 days after
the end of the six-month period. A “key employee” shall mean an employee who, at any time
during the 12-month period ending on the identification date, is a “specified employee” under
section 409A of the Internal Revenue Code, as determined by the Board. The determination of
key employees, including the number and identity of persons considered key employees and the
identification date, shall be made by the Board in accordance with the provisions of Sections
416(i) and 409A and the regulations issued thereunder.
	 
	(g)	 	Mitigation. The Executive shall not be required to mitigate amounts payable pursuant
to this section by seeking other employment or otherwise.
	 
	9.	 	Effect of Termination. If the Executive (a) is a member of the Board or that of any
of the Company’s subsidiaries or, or (b) holds any other position with the Company and the
Company’s subsidiaries on the Date of Termination, the Executive shall resign from all such
positions as of such date.
	 
	10.	 	Termination of Other Agreements. By their execution of this Agreement, each of the
Company and the Executive confirm the termination, as of the Effective Date of all rights and
obligations that each of the parties may have had under (a) the Restated Employment Agreement
between the Executive and Metrocall Holdings, Inc. and Metrocall Inc., dated as of February 5,
2003, as amended on March 29, 2004 and (b) any other employment,
consulting, non-competition, bonus or other compensatory plan, program, arrangement or
contract relating to the employment of the Executive, written or oral, between the Executive
and the Company, the Company’s predecessor or any person affiliated with the Company or its
predecessor entered into prior to the Effective Date (together, the “Prior Employment
Documents”).




13









 






	11.	 	Notices. All notices, demands, requests, or other communications required or permitted to be
given or made hereunder (collectively, “Notice”) shall be in writing and shall be delivered,
telecopied, or mailed by first class registered or certified mail, postage prepaid, addressed
as follows:
	 
	(a)	 	if to the Company:





USA Mobility, Inc.

6677 Richmond Highway

Alexandria, Virginia 22306

Telecopier: (703) 768-9625




with a copy (which shall not constitute notice) to:




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Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telecopier: (212) 593-5955

Attention: Jeffrey S. Sabin, Esq.





	(b)	 	if to the Executive:





Vincent D. Kelly

11807 Chapel Road

Clifton, VA 20124





	 	 	or to such other address as may be designated by either party in a notice to the other. Each
notice, demand, request, or other communication that shall be given or made in the manner
described above shall be deemed sufficiently given or made for all purposes three (3) days
after it is deposited in the U.S. mail, postage prepaid, or at such time as it is delivered
to the addressee (with the return receipt, the delivery receipt, the answer back or the
affidavit of messenger being deemed conclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
	 
	12.	 	Severability. The invalidity or unenforceability of any one or more provisions of
this Agreement shall not affect the validity or enforceability of the other provisions of this
Agreement, which shall remain in full force and effect. The parties agree that in the event
any of the provisions in this Agreement, interpreted in accordance with the Agreement as a
whole, are found to be unenforceable by a court of competent jurisdiction, such court shall
determine the limits allowable by law and shall enforce the same.
	 
	13.	 	Survival. It is the express intention and agreement of the parties that the
provisions of Section 5 shall survive the termination of this Agreement, and that the
provisions of Section 6 shall survive for two (2) years following the termination of this
Agreement.
	 
	14.	 	Assignment: Successors. The rights and obligations of the parties to this Agreement
shall not be assignable, except that the rights and obligations of the Company hereunder shall
be assignable in connection with any subsequent merger, consolidation, sale of substantially
all of the assets of the Company, or similar reorganization of a successor. The Company will
require any successor (whether direct or in direct, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to the same extent
that the Company is required to perform it. Failure of the Company to obtain such assumption
and agreement before the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company as provided in
Section 8(e) herein.
	 
	15.	 	Binding Effect. Subject to any provisions restricting assignment, this Agreement
shall be binding upon the parties and shall inure to the benefit of the parties and their
respective heirs, devisees, executors, administrators, legal representatives, successors, and
assigns.




15









 






	16.	 	Amendment Waiver. This Agreement shall not be amended, altered or modified except by
an instrument in writing duly executed by all parties. Neither the waiver by any of the
parties of a breach of or a default under any of the provisions of this Agreement, nor the
failure of either of the parties, on one or more occasions, to enforce any of the provisions
of this Agreement or to exercise any right or privilege hereunder, shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver
of any such provisions, rights, or privileges.
	 
	17.	 	Headings. Section headings contained in this Agreement are inserted for convenience
of reference only, shall not be deemed to be a part of this Agreement for any purpose, and
shall not in any way define or affect the meaning, construction, or scope of any of the
provisions of this Agreement.
	 
	18.	 	Governing Law. This Agreement, the rights and obligations of the parties, and any
claims or disputes arising from this Agreement, shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia (but not including the choice of law
rules thereof).
	 
	19.	 	Entire Agreement. This Employment Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior agreements, written
or oral, with respect thereto, including, but not limited to, the Prior Employment Documents.
	 
	20.	 	Indemnification. In consideration of this Agreement, the Executive hereby waives any
and all rights under and releases, and indemnifies and holds the Company (and its officers,
directors, employees and agents) and its successors and assigns, harmless from any damage,
loss, liability, judgment, fine, penalty, assessment, settlement, cost, or expense including,
without limitation, reasonable expenses of investigation, reasonable attorneys’ fees and other
reasonable legal costs and expenses incident to any of the foregoing or to the enforcement of
this Section 20, whether or not suit is brought or, if brought, whether or not such suit is
successful, in whole or in part arising out of or relating to any and all employment,
consulting, non-competition, bonus, or other compensatory plan, program, arrangement, or
contract relating to the employment of the Executive, written or oral, between the Executive
and the Company or any person affiliated with the Company entered into prior to the Effective
Date, including, without limitation, the Prior Employment Documents.
	 
	21.	 	Arbitration. Either party may designate in writing to the other (in which case this
Section 21 shall have effect but not otherwise) that any dispute that may arise directly or
indirectly in connection with this Agreement, the Executive’s employment, or the termination
of the Executive’s employment, whether arising in contract, statute, tort, fraud,
misrepresentation, or other legal theory, shall be determined solely by arbitration in
Washington, D.C. under the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association (the “AAA”). The only legal claims between the Executive, on
the one hand, and the Company or any subsidiary, on the other, that would not be included in
this Agreement to arbitrate are claims by the Executive for workers’ compensation or
unemployment compensation benefits, claims




16









 






	 	 	for benefits under a Company or subsidiary benefit plan if the plan does not provide for
arbitration of such disputes, and claims by the Executive that seek judicial relief in the
form of specific performance of the right to be paid until the termination date during the
pendency of any dispute or controversy arising under Section 7 (a)(ii). If this Section 21
is in effect, any claim with respect to this Agreement, the Executive’s employment, or the
termination of the Executive’s employment must be established by a preponderance of the
evidence submitted to the impartial arbitrator. A single arbitrator shall conduct any
arbitration. The arbitrator shall have the authority to order a pre-hearing exchange of
information by the parties including, without limitation, production of requested documents,
and examination by deposition of parties and their authorized agents. If this Section 21 is
in effect, the decision of the arbitrator (i) shall be final and binding, (ii) shall be
rendered within ninety (90) days after the impanelment of the arbitrator, and (iii) shall be
kept confidential by the parties to such arbitration. The arbitration award may be enforced
in any court of competent jurisdiction. The Federal Arbitration Act, 9 U.S.C. §§ 1-15, not
state law, shall govern the arbitrability of all claims.
	 
	22.	 	Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be an original and all of which shall be deemed to constitute one and the same
instrument.





          IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or have caused this
Agreement to be duly executed, on their behalf as of the day and year first hereinabove written.




	 	 	 	 	 	 	 	 	 
	 	 	 	 	USA Mobility, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/George Z. Moratis
 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Date: November 16, 2004	 	Its: Senior Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Vincent D. Kelly	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Date: November 16, 2004	 	Vincent D. Kelly	 	 







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