THAT ARE SUITABLE FOR HIS POSITION AND APPROPRIATE FOR THE PERFORMANCE
OF HIS DUTIES.
2.4.
REPRESENTATION OF EMPLOYEE.
EMPLOYEE
REPRESENTS AND WARRANTS TO THE COMPANY THAT HE IS FREE TO ENTER INTO AND FULLY
PERFORM THIS AGREEMENT AND THE AGREEMENTS REFERRED TO HEREIN WITHOUT BREACH OF
ANY OTHER AGREEMENT OR CONTRACT TO WHICH EMPLOYEE IS A PARTY OR BY WHICH
EMPLOYEE IS BOUND.
3.
EXCLUSIVE SERVICE.
EMPLOYEE WILL
DEVOTE HIS FULL WORKING TIME, ENERGY, SKILL AND EFFORTS EXCLUSIVELY TO THE
PERFORMANCE OF THE SERVICES FOR THE COMPANY AND WILL APPLY ALL HIS SKILL AND
EXPERIENCE TO THE PERFORMANCE OF THE SERVICES AND ADVANCING THE COMPANY'S
INTERESTS AND WILL DO NOTHING INCONSISTENT WITH THE PERFORMANCE OF THE SERVICES
HEREUNDER.
NOTWITHSTANDING THE FOREGOING, COMPANY AGREES THAT EMPLOYEE MAY
CONTINUE HIS SERVICE AS DIRECTOR TO D&E COMMUNICATIONS, INC. AND ENGAGE IN
OTHER, NONCOMPETITIVE ACTIVITIES THAT DO NOT OTHERWISE INTERFERE WITH EMPLOYEE'S
OBLIGATION TO PROVIDE SERVICES HEREUNDER.
4.
COMPENSATION AND BENEFITS
4.1.
SALARY.
DURING THE TERM OF THE AGREEMENT, THE
COMPANY WILL PAY EMPLOYEE A GROSS BASE SALARY AT A RATE OF $250,000 ("EMPLOYEE'S
SALARY") PER YEAR PAYABLE BI-WEEKLY.
THE COMPANY WILL REVIEW THE EMPLOYEE'S
SALARY AT LEAST ONCE EACH YEAR AND MAY, AT ITS DISCRETION, INCREASE THE
EMPLOYEE'S SALARY.
4.2.
ADDITIONAL BENEFITS.
EMPLOYEE AND ELIGIBLE
FAMILY MEMBERS WILL BE ELIGIBLE TO PARTICIPATE IN THE COMPANY'S EMPLOYEE BENEFIT
PLANS OF GENERAL APPLICATION, INCLUDING WITHOUT LIMITATION ANY PENSION PLANS,
401(K), AND ANY LIFE, HEALTH AND DENTAL INSURANCE PLANS IN ACCORDANCE WITH THE
RULES ESTABLISHED FOR INDIVIDUAL PARTICIPATION IN ANY SUCH PLAN AND APPLICABLE
LAW, INCLUDING HEALTH AND DENTAL FOR SPOUSE. MEDICAL BENEFITS WILL BEGIN UPON
START DATE. IN ADDITION, EMPLOYEE WILL BE ENTITLED TO 4 WEEKS VACATION.
4.3.
STOCK OPTIONS.
EMPLOYEE HAS BEEN GRANTED
STOCK OPTIONS (THE "OPTIONS") FOR 120,000 SHARES OF THE COMPANY'S COMMON STOCK
AT AN OPTION PRICE TO BE FIXED AT NASDAQ MARKET CLOSE ON THE FIRST DAY OF
EMPLOYMENT.
THE OPTIONS SHALL VEST AT THE RATE OF 40,000 SHARES AT THE END OF
EACH 12 MONTH PERIOD PROVIDED EMPLOYEE IS IN ACCORDANCE WITH THE COMPANY'S 1998
STOCK OPTION PLAN.
EMPLOYEE EXPRESSLY ACKNOWLEDGES AND AGREES THAT, TO THE
EXTENT OF
ANY INCONSISTENCY BETWEEN THE TERMS OF THIS AGREEMENT AND THE 1998 INCENTIVE
STOCK OPTION PLAN, THE TERMS OF THE 1998 INCENTIVE STOCK OPTION PLAN SHALL
GOVERN AND CONTROL; PROVIDED HOWEVER, THAT TO THE EXTENT THAT THE TERMS OF THE
STOCK OPTION AGREEMENT ISSUED TO EMPLOYEE ON ACCOUNT OF THE OPTIONS CONTAIN
TERMS AND CONDITIONS WHICH, BY THE TERMS OF THE 1998 INCENTIVE STOCK OPTION
PLAN, MAY BE INCLUDED THEREIN, THE TERMS SET FORTH IN SUCH STOCK OPTION
AGREEMENT SHALL GOVERN AND CONTROL.
4.4.
EXPENSES.
ALL REASONABLE AND NECESSARY
EXPENSES INCURRED BY EMPLOYEE IN CONNECTION WITH EMPLOYEE'S PERFORMANCE OF THE
SERVICES SHALL BE REIMBURSED PROVIDED THAT SUCH EXPENSES ARE IN ACCORDANCE WITH
THE COMPANY'S POLICIES, AS DETERMINED FROM TIME TO TIME BY THE BOARD, AND
PROPERLY DOCUMENTED AND ACCOUNTED FOR.
5.
TERM AND TERMINATION
5.1.
TERM OF AGREEMENT.
UNLESS THIS AGREEMENT IS