Document:

Exhibit 10.1

CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE

This negotiated Separation Agreement and General Release (“Agreement”) is made and entered into between John A. Goodman (“EXECUTIVE”) and Goodman Networks, Inc. (“COMPANY”) (the EXECUTIVE and the COMPANY are referred to collectively as the “Parties”).  

Reference is hereby made to that certain Second Amended and Restated Employment Agreement by and between EXECUTIVE and the COMPANY, effective April 11, 2014 (the “Employment Agreement”) and all capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings assigned to such terms in the Employment Agreement.

The Parties desire to resolve all matters related to the EXECUTIVE’s employment with COMPANY and relationship with the COMPANY, including all matters arising under the Employment Agreement and matters related to EXECUTIVE’s separation from employment at COMPANY without cause, effective February 15, 2015 (“Separation Date”), which date is at least thirty (30) days from the date the COMPANY provided written notice to EXECUTIVE as required under Section 5.4 of Employment Agreement.  In consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:

	
1.
	
Consideration.  In exchange for the promises made herein, the Parties agree that: 

	
a.
	
As the Executive’s Final Compensation and Final Bonus pursuant to the Employment Agreement, the following described in clauses 1(a)(i) through 1(a)(iv) of this Agreement shall be paid or provided by the COMPANY to the EXECUTIVE:

(i)On the effective date of this Agreement, which is the eighth (8th) day after the EXECUTIVE signs this Agreement (“Effective Date”), the COMPANY shall pay EXECUTIVE the amount of Base Salary as of such date that has been earned through the Separation Date but has not been paid;

(ii)On the Effective Date of this Agreement, the COMPANY shall pay EXECUTIVE all PTO accrued but unused through the Separation Date according to the terms of the Employment Agreement with all PTO to cease to accrue as of the Separation Date;

(iii)The COMPANY shall pay EXECUTIVE $1,050,000 representing the full amount of the EXECUTIVE’s Management Bonus for calendar year 2014 within one week of the Separation Date;

(iv)The COMPANY shall pay EXECUTIVE $950,000 representing the full amount of the EXECUTIVE’s Discretionary Bonus within one week of the Separation Date; and

(v) The COMPANY shall reimburse EXECUTIVE, no later than February 27, 2015, for the EXECUTIVE’s business expenses which have been incurred but not reimbursed by the Separation Date, subject to substantiation prior to such date by the EXECUTIVE in accordance with the COMPANY’s expense reimbursement policies.

	
b.
	
The COMPANY agrees to pay EXECUTIVE cash severance benefits, subject to all applicable federal income and payroll taxes, deductions and withholdings, totaling thirty-six (36) months of Base Salary provided EXECUTIVE complies with Sections 7 (as amended herein), 8, 9 and 10 of the Employment Agreement (the “Severance Payment”).  Payments shall be paid in accordance with the following schedule: (i) the first $1,000,000 of the Severance Payment will be payable in four (4) equal payments, with (A) the first payment being at the Company’s next regular payroll period after the Separation Date which is at least five (5) business days following the Effective Date of this Agreement, and (B) each of the remaining three (3) payments (the “Quarterly Payments”) being paid on the next payroll period following the third, sixth and ninth month anniversary dates of the first payment; and (ii) the remaining amount of the Severance Payment will be payable in nine (9) equal monthly payments with the first of such payments being paid on the first payroll period coinciding with or next following one (1) month after the last Quarterly Payment, and each of the remaining eight (8) payments being paid monthly thereafter. 

	
c.
	
Upon the Separation Date, EXECUTIVE shall have the right, but not the obligation, to request that the COMPANY pay a Real Estate Keep Whole Amount related to his primary residence in Frisco, Texas as described in Section 4.8 of the Employment Agreement provided such request be made in writing and accompanied with a fair market appraisal within thirty (30) days of the Separation Date.

	
d.
	
EXECUTIVE may have the right to continue certain benefits pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended (“COBRA”) after the Separation Date and will receive a notification of COBRA rights 

 

 

		
under separate cover. Provided EXECUTIVE validly and timely elects COBRA continuation coverage, to the extent permitted by law, the COMPANY agrees to pay up to 100% of the COBRA premiums to continue medical, dental, and vision insurance coverage under the COMPANY’s group health insurance plan for EXECUTIVE and his “qualified beneficiaries” (as defined by COBRA) in accordance with COBRA and the terms of the COMPANY’s group health insurance plan, as it may be amended from time to time (the “Health Benefits”) for a period of up to thirty-six (36) months or such shorter period allowed by COBRA from the Separation Date.  EXECUTIVE understands and agrees that payments made pursuant to this Paragraph 1(d) shall be included in his taxable income to the extent required to avoid adverse tax consequences on the COMPANY or EXECUTIVE with respect to reimbursements under the COMPANY’s group health insurance plan for EXECUTIVE and/or his qualified beneficiaries.  EXECUTIVE and the COMPANY agree that the foregoing period of COMPANY-paid COBRA coverage shall count against, and reduce, the otherwise applicable period during which the EXECUTIVE and his “qualified beneficiaries” (as defined by COBRA) would be entitled to receive COBRA coverage that is not so paid by the COMPANY.  Notwithstanding the foregoing, if the payments made pursuant to this Paragraph 1(d) would violate the nondiscrimination rules applicable to non-grandfathered plans, or would result in the imposition of penalties as determined under final regulations promulgated pursuant to the Patient Protection and Affordable Care Act of 2010 (“PPACA”), the Company shall reform Paragraph 1(d) in a manner as is necessary to comply with PPACA.

	
e.
	
The COMPANY agrees to pay 100% of the monthly premiums on the following life insurance policies: (i) North American Company for Life and Health Insurance Buy Sell Policy Number LB00294670, (ii) North American Company for Life and Health Insurance Buy Sell Policy Number LB02941240, (iii) MetLife Life Insurance Policy #210165127, (iv) AXA Insurance Life Insurance Policy #110009595, (v) current COMPANY-provided Basic Life and AD&D Life Insurance Policy, (vi) current COMPANY-provided Voluntary Employee Life and AD&D Life Insurance Policy, (vii) current COMPANY-provided Spouse Voluntary Life and AD&D Life Insurance Policy and (viii) current COMPANY-provided Child Voluntary Life Insurance Policy (collectively, the “Respective Policies”)  for a period of up to thirty-six (36) months or such shorter period as allowed by the Respective Policy from the Separation Date, to the extent permitted by law and subject to EXECUTIVE validly electing to continue such coverage.  The COMPANY agrees to change the beneficiaries of the Respective Policies listed in (iii) and (iv) above to Cayenne Goodman.  After the 36 month period expires, to the extent permitted by law and the Respective Policy, EXECUTIVE may elect, in his sole discretion, to continue to pay the monthly premiums himself in accordance with the Respective Policy. If any one or more of the Respective Policies expire, the COMPANY shall procure a substantially similar policy to replace each such expired policy for EXECUTIVE and pay 100% of the monthly premium on such policy for the remainder of the 36 month period.  EXECUTIVE understands and agrees that payments made pursuant to this Paragraph 1(e) shall be included in his taxable income to the extent required by applicable law.  Notwithstanding the foregoing, if the payments made pursuant to this Paragraph 1(e) would violate the nondiscrimination rules applicable to non-grandfathered plans, or would result in the imposition of penalties as determined under final regulations promulgated pursuant to PPACA, the Company shall reform Paragraph 1(e) in a manner as is necessary to comply with PPACA.

	
f.
	
Notwithstanding any contrary provisions of the applicable Stock Option Award Agreements governing stock options granted to EXECUTIVE pursuant to Section 4.3 or Section 4.9 of the Employment Agreement, on and following the Effective Date, any outstanding stock options with respect to the COMPANY’s stock held by EXECUTIVE on the Separation Date (i) shall be fully vested with EXECUTIVE and exercisable to the extent not previously vested and exercisable; and (ii) may be exercised until the earlier of (a) the expiration date of the original “Option Period” as defined under such Stock Option Award Agreements (or such comparable defined term relating to the period of exercisability of the stock options), or (b) the tenth (10th) anniversary of the date of grant of the respective stock option.  The COMPANY and EXECUTIVE agree to execute such other documents in connection with the foregoing, including an amendment to the applicable Stock Option Award Agreements, as the COMPANY may reasonably determine should be executed to effectuate the foregoing provisions.

	
g.
	
EXECUTIVE represents that, as of the Effective Date, he has returned to the COMPANY all assets and equipment provided to him for the performance of his employment duties as requested by the COMPANY.  EXECUTIVE shall have the right to purchase, at book value, EXECUTIVE’s office furniture, company issued computers, iPads, and mobile phones provided to EXECUTIVE by the COMPANY.  

	
h.
	
The COMPANY grants EXECUTIVE a one-time put right to sell to the COMPANY up to $2,700,000 of EXECUTIVE’s equity interests in the COMPANY (the “Put Repurchase”), determined based on the fair market value of such equity interests on the date EXECUTIVE exercises the put right with such fair market value being determined by the COMPANY’s Board of Directors in its good-faith discretion.  The Put Repurchase can only be requested in writing at any time by the EXECUTIVE between January 1, 2016 and December 31, 2018 and may 

 

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only be requested one time.  The purchase price for the Put Repurchase shall be paid in a single sum cash payment on the closing date, which shall be on a business day within fifteen days after the date of exercise.  This put right may only be exercised by EXECUTIVE if (i) the COMPANY is permitted at such time of exercise to complete the requested Put Repurchase pursuant to law, (ii) the COMPANY receives a capital adequacy opinion satisfactory to the COMPANY’s Board of Directors prior to the closing of the Put Repurchase, and (iii) such Put Repurchase would not be in violation of any contract, agreement, instrument, arrangement, commitment, understanding or undertaking to which the COMPANY is a party or otherwise bound.

	
i.
	
The EXECUTIVE grants the COMPANY a one-time call right to purchase from EXECUTIVE up to $2,700,000 of EXECUTIVE’s equity interest in the COMPANY (the “Call Repurchase”), determined based on the fair market value of such equity interests on the date the COMPANY exercises its right with such fair market value being determined by the COMPANY’s Board of Directors in its good-faith discretion.  The Call Repurchase can be exercised in writing at any time by the COMPANY between January 1, 2016 and December 31, 2018 and may only be exercised one time.  The purchase price for the Call Repurchase shall be paid in a single sum cash payment on the closing date, which shall be on a business day within fifteen days after the date of exercise.  This call right may only be exercised by the COMPANY if (i) the COMPANY is permitted at such time of exercise to complete the Call Repurchase pursuant to law, (ii) the COMPANY receives a capital adequacy opinion satisfactory to the COMPANY’s Board of Directors prior to the closing of the Call Repurchase, and (iii) such Call Repurchase would not be in violation of any contract, agreement, instrument, arrangement, commitment, understanding or undertaking to which the COMPANY is a party or otherwise bound.  

	
j.
	
While EXECUTIVE is a member of the COMPANY’S Board of Directors, EXECUTIVE shall receive compensation and reimbursement of expenses pursuant to the Company’s standard practices and procedures.  For a period of 36 months after the Separation Date, subject to the COMPANY’s Board of Directors right to exercise its fiduciary duties with regard to nominations for the COMPANY’s Board of Directors, the COMPANY will use its commercially reasonable efforts to have its Board of Directors nominate EXECUTIVE as a nominee for election to the COMPANY’s Board of Directors by the COMPANY’s shareholders.  

	
k.
	
EXECUTIVE acknowledges that the foregoing consideration recited in this Agreement is adequate consideration for this Agreement.  

2.Acknowledgements.  Subject to the COMPANY’s payment of the amounts owed to EXECUTIVE pursuant to clauses 1(a)(i-iv) above, EXECUTIVE acknowledges that: (i) he has been paid for all hours worked, and paid all remuneration owed to him, including but not limited to all wages, bonuses, and all other payments, (ii) he has not suffered any on-the-job injury for which he has not already filed a workers’ compensation claim, (iii) he has received payment for any accrued, but unused, paid time off and has no accrued but unused PTO due to him, (iv) he has received any leave to which he was entitled during his employment, (v) he has not been retaliated or discriminated against because he took a family or medical leave or any reason protected by law, (vi) COMPANY has not interfered with his ability to request or take such leaves, (vii) except as otherwise provided in this Agreement or provided by law, all other employment related benefits terminated as of the Separation Date, and (viii) he has returned all assets and equipment provided to him for the performance of his duties.  EXECUTIVE will not be entitled to compensation for any bonus plan, savings plan, incentive plan or benefit not specifically mentioned within this Agreement.  

3.Release of All Claims.  The Parties intend to effectuate with this Agreement the complete extinguishment of any and all claims, known or unknown, and actions of any nature whatsoever, from the beginning of time to the effective date of this Agreement and for EXECUTIVE on his own behalf and on behalf of his heirs, executors, administrators, attorneys, successors and assigns (collectively, the “Releasing Parties”) to release and forever discharge COMPANY and each and every officer, director, executive, agent, parent, subsidiary, wholly owned company, affiliate and division of COMPANY, and their successors, assigns, beneficiaries, legal representatives, insurers and heirs (all of which are referred to collectively in this Paragraph 3 and in Paragraph 4 of this Agreement as “COMPANY”), of and from any and all manner of actions, causes of actions, charges, suits, rights to attorneys’ fees or costs, debts, obligations, claims, and demands whatsoever in law or equity by reason of any matter, cause or thing whatsoever, and particularly, but without limitation of the foregoing general terms, by reason of any claims or actions arising from EXECUTIVE’s separation of employment or relationship with COMPANY.  In addition, the Releasing Parties unconditionally release, discharge, waive, and hold harmless the COMPANY from each and every other claim, cause of action, right, liability, penalty, expense, or demand of any kind and nature, whether or not presently known to exist, which any of the Releasing Parties have, had, or may have against the COMPANY relating to or arising out of any matter arising on or before the effective date of this Agreement.  Notwithstanding anything to the contrary herein, nothing in this Agreement will be considered a release of EXECUTIVE’s claims, if any, (i) for vested retirement benefits and/or health insurance continuation benefits pursuant to the Employee Retirement Income Security Act of 1974, as amended, (ii) for breach of this Agreement and/or (iii) regarding any rights to  exculpation, indemnification, and/or advancement of expenses under COMPANY’s governing documents or any agreement with COMPANY and/or  any rights to benefits or coverage under directors’ and officers’ insurance policies maintained by COMPANY.  Notwithstanding anything to the 

 

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contrary herein, nothing in this Agreement will be considered a release of EXECUTIVE’s claims which arise after the Effective Date, if any, (i) for vested retirement benefits and/or health insurance continuation benefits pursuant to the Employee Retirement Income Security Act of 1974, as amended, (ii) regarding any rights, remedies, and/or benefits (collectively in this sentence, “rights”) under this Agreement, (iii) regarding any rights solely as a shareholder of COMPANY, (iv) regarding any matter under the Shareholders’ Agreement to which the Parties are a party, (v) regarding any rights under any and all voting agreements and/or proxies relating to shares of COMPANY (including, without limitation, under equity incentive plans of COMPANY and/or stock option or other award agreements of COMPANY with others), (vi) regarding any vested rights in or under stock option or other award agreements with COMPANY and corresponding equity incentive plans of COMPANY, (vii) regarding any matter solely as a member of the board of directors of COMPANY (including, without limitation, as a member of any committee of such board), (viii) for any claim of coverage of, or payment of benefits for or to, EXECUTIVE and any of his dependents with respect to claims arising during any period in which any of them has been covered by medical or healthcare benefits plans maintained or sponsored by COMPANY, and/or (ix) regarding any rights to  exculpation, indemnification, and/or advancement of expenses under COMPANY’s governing documents or any agreement with COMPANY and/or  any rights to benefits or coverage under directors’ and officers’ insurance policies maintained by COMPANY.  

With respect to the claims that the Releasing Parties are releasing and waiving, they are releasing and waiving not only their right to recover money or other relief in any action that they might institute, but also they are releasing and waiving their right to recover money or other relief in any action that might be brought on their behalf by any other person or entity including, but not limited to, the United States Equal Employment Opportunity Commission, the Department of Labor, or any other federal, state or local governmental agency or department.  The Releasing Parties acknowledge and agree that the released claims include any that have been or may hereafter be asserted on EXECUTIVE’s behalf in any class or collective action relating to his employment and/or the termination of his employment with the COMPANY (“Class/Collective Action”).  Accordingly with regard to the released claims: (a) the Releasing Parties waive any right to participate in any Class/Collective Action, including serving as a class representative or named plaintiff; and (b) the Releasing Parties waive any right to receive notice of any pending or resolved Class/Collective Action.  In the event that any of the Releasing Parties are included or identified as a member or potential member of a class or collective in Class/Collective Action with regard to claims released herein, the Releasing Parties agree to (i) opt out of such proceeding after learning of the inclusion of the Releasing Parties by executing without objection or delay any opt out form presented to the Releasing Parties, and/or (ii) not to opt in to such proceeding. 

Excluded further from the release and waiver are any claims or rights which cannot be waived by law, such as his right to file a charge with an administrative agency or participate in any agency investigation.  The Releasing Parties are, however, waiving their right to recover any money in connection with such a charge or investigation.  If a lawful subpoena to testify before any entity is issued any of the Releasing Parties, such Releasing Party will immediately notify COMPANY and provide it with a copy of the subpoena. 

This Agreement is a full and final bar to any claims that the Releasing Parties may have against the COMPANY with regard to the released claims, including, without limitation, any claims:

(a)arising from EXECUTIVE’s terms and conditions of employment, separation from employment, or the employment practices of the COMPANY, including but not limited to claims alleging a violation of personnel policies, benefit plans, procedures, and handbooks;

(b)relating to any claims for punitive or compensatory damages; back and/or front pay claims and fringe benefits including bonuses; disability benefits; penalties; interest; or payment of any attorneys’ fees, costs or expenses for him;

(c)arising under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1866, the Americans with Disabilities Act, the Age Discrimination in Employment Act (“ADEA”), the Older Workers’ Benefits Protection Act, the Family Medical Leave Act, the Fair Labor Standards Act, the Equal Pay Act, the Occupational Safety and Health Act, the Consolidated Omnibus Reconciliation Act, the Genetic Information Nondiscrimination Act, the Uniformed Services Employment and Re-Employment Rights Act, Texas Commission on Human Rights Act/Texas Employment Discrimination Law, Texas Disability Discrimination Law, Texas whistleblower protection statute, Texas Minimum Wage Act, Texas wage payment law, state and local human rights and/or discrimination laws, state and local wage and hour laws, state and local equal pay laws, state and local leave laws, state and local whistleblower laws, state and local unfair competition laws, and claims alleging discrimination or harassment or aider and abettor liability on the basis of pregnancy, age, race, color, gender (including sexual harassment), national origin, ancestry, disability, medical condition, genetic information, religion, sexual orientation, marital status, caregiver status, parental status, veteran status, source of income, entitlement to benefits, union activities, or any other status protected by local, state or federal laws, constitutions, regulations, ordinances or executive orders; and,

 

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(d)based on any express or implied contract or covenant of good faith and fair dealing, tort, common law, negligence, constitutional, statutory, whistleblower, public policy, personal injury, invasion of privacy, defamation, emotional distress, retaliation, detrimental reliance, or wrongful discharge theory.  

The Releasing Parties expressly understand that among the various rights and claims being released and waived in this Agreement are those arising under the Age Discrimination in Employment Act (“ADEA”).  This general release does not cover rights or claims under the ADEA arising after EXECUTIVE signs this Agreement.  

Notwithstanding anything to the contrary herein, this Agreement and Executive’s separation from the Company shall not preclude Executive from participating in any equity or option repurchases between the Company and its shareholders.

4.Covenant Not To Sue.  A “covenant not to sue” is a legal term which means EXECUTIVE promises not to file a lawsuit in court.  It is different from the Release of claims contained in Paragraph 3 above.  Besides waiving and releasing the claims covered by Paragraph 3 above, the Releasing Parties further agree not to sue COMPANY in any forum for any reason, including but not limited to claims, laws or theories covered by the Release language in Paragraph 3 above.  Notwithstanding this Covenant Not To Sue, the Releasing Parties may bring a claim against COMPANY to enforce this Agreement, to enforce legal rights expressly unaffected by this Agreement and/or to challenge the validity of this Agreement under the ADEA.  If the Releasing Parties sue the COMPANY in violation of this Agreement, they shall be liable to the COMPANY for its reasonable attorneys’ fees and other litigation costs incurred in defending against such a suit.  Alternatively, if the Releasing Parties sue the COMPANY in violation of this Agreement, the COMPANY can require EXECUTIVE to return all but $100 of the money paid to him pursuant to this Agreement.  In that event, COMPANY shall be excused from making any further payments otherwise owed to EXECUTIVE under the terms of this Agreement.

5.Release of Unknown Claims.  For the purpose of implementing a full and complete release, the Releasing Parties expressly acknowledges that the releases given in this Agreement are intended to include, without limitation, claims that the Releasing Parties did not know or suspect to exist in their favor at the time of the effective date of this Agreement, regardless of whether the knowledge of such claims, or the facts upon which they might be based, would materially have affected the settlement of this matter; and that the consideration given under the Agreement was also for the release of those claims and contemplates the extinguishment of any such unknown claims.

6.Confidentiality.  EXECUTIVE warrants that he has not to date and shall not in the future disclose to any person, organization, media, website, social media site, blogger, present or former executives of COMPANY (other than COMPANY employees involved in negotiating this Agreement), either directly or indirectly, in any manner whatsoever, any information regarding the terms of this Agreement, or any fact concerning its negotiation, execution or implementation.  EXECUTIVE may make disclosures regarding this Agreement in a form no more extensive than necessary: (a) to the attorney(s) who are advising him in connection with this Agreement; (b) to his tax accountants, tax preparers of financial accounts; (c) to any taxing authority as necessary for the proper payment of taxes due, if any, on the settlement amount and (d) to his spouse or other persons with whom EXECUTIVE may have privileged communications at law.  EXECUTIVE shall instruct each of the individuals listed in this Paragraph that the information must be held confidential.  EXECUTIVE may also make disclosures regarding this Agreement if COMPANY makes disclosures regarding this Agreement.  

EXECUTIVE acknowledges he has continuing obligations under the Employment Agreement and other Confidentiality and Nondisclosure Agreements he signed with the COMPANY, as modified by this Agreement, and that during his employment with COMPANY, he had access to confidential and proprietary information of COMPANY as further defined in the Employment Agreement, any confidentiality agreement and in the COMPANY’s employment handbook.  EXECUTIVE understands that the COMPANY and its subsidiaries (including but not limited to Multiband Corporation) has a leading position in a highly technical and extremely competitive business, achieved through years of work in research, development, engineering, marketing, and establishing and maintaining relationships with customers, contractors, subcontractors, manufacturers, and vendors. The COMPANY specializes in, among other things, end-to-end network solutions including design, engineering, deployment, maintenance and decommissioning services; network solutions to wireless carriers, OEMs, backhaul service providers, enterprise and government customers; and LTE deployment, DAS/in-building, small cells, carrier adds, TDM migration, 2G/3G harvesting, field technical solutions, cell site management, drive testing, spectrum conditioning, radio optimization, power upgrades, and PMO support.  The COMPANY also has developed substantial favorable goodwill with its customers, contractors, subcontractors, manufacturers, and vendors.  The COMPANY’s future success requires that its Confidential Information and other proprietary information be maintained and protected by all employees and others who perform work for the COMPANY. 

In order for the COMPANY reasonably to protect its interests against the competitive use of any of the COMPANY's Confidential Information and other proprietary information, EXECUTIVE covenants that he will not at any time after cessation of his employment with the COMPANY, directly or indirectly communicate, use, transmit electronically or otherwise, or disclose to any person or entity, any information, observations, data, written materials, records and documents or other information concerning the business or affairs of the COMPANY or its licensees or the business or affairs of any supplier or customer of the COMPANY 

 

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(including without limitation, customer lists or mailing lists, the names, addresses, e-mail addresses and telephone numbers of all subscribers and prospective subscribers to any product or service, and any other personally identifiable information relating to such subscribers), or any processes, equipment or products of the COMPANY or its licensees, or employee lists, compensation data, pricing information, customer or supplier pricing information, vendor information, manuals and training materials, pending projects or proposals, COMPANY financial, technical, business, and credit information or marketing strategies, analyses and market expansion plans, all revenue and profit analyses and projections and all commission structures and statements, all data and tasks maintained in a Siterra database or any other project database; all past, present or future bidding data, forecasts, deliverables, budgets, status reports, and invoices relating to any past, present or future customer, all implemented or planned product and service improvements or changes, all information about the COMPANY’s network configuration, plant or any equipment attached thereto, and any document or data designated as confidential (all of the foregoing are hereinafter referred to as "Confidential Information"). EXECUTIVE agrees he will not transmit electronically or otherwise transfer Confidential Information to any site (including, without limitation, computer tablet, laptop or desktop computer, smartphone, cellular phone, personal digital assistant, cloud storage, electronic storage, website or other electronic device) other than those sites approved in writing by the COMPANY. EXECUTIVE specifically acknowledges and agrees that he may not directly or indirectly provide any Confidential Information to any person or entity to be used to bid on any new work, or any Phase of new work, for any current or future customer of the COMPANY. EXECUTIVE understands and acknowledges that Confidential Information provides the COMPANY a competitive advantage over others who do not have the information, and that the COMPANY would be substantially harmed if Confidential Information were directly or indirectly disclosed or used.

It is understood, however, that these confidentiality obligations do not apply in the event and to the extent that Confidential Information is in the public domain other than as a result of EXECUTIVE’s act or omission or in the event that EXECUTIVE was in possession, custody or control of such Confidential Information prior to his employment with the COMPANY. EXECUTIVE acknowledges that the Confidential Information is the sole property of the COMPANY, even if EXECUTIVE helped acquire or develop that Confidential Information. EXECUTIVE acknowledges that all confidential information, including any originals and copies, whether in hardcopy or electronic form, shall at all times remain the property of the COMPANY and shall not be copied, published, transmitted or distributed. 

The COMPANY reserves the right to avail itself of all legal or equitable remedies to prevent impermissible use of Confidential Information or proprietary information of the COMPANY or to recover damages incurred as a result of such impermissible use. 

7.Restrictive Covenants.  The Parties acknowledge that the Employment Agreement contains Section 7.4 entitled Restrictive Covenants. In consideration of the severance and benefits set forth in this Agreement, the Parties acknowledge and agree that the Section 7.4 of the Employment Agreement is amended and replaced in its entirety as follows.  

7.4  Restrictive Covenants. Employee acknowledges that in order to effectuate the promise to hold Confidential Information in trust for the Company and in order to protect the Company's legitimate business interests (which include but are not limited to continuation of contracts and relationships with its customers, its reputation, and its competitive advantage), it is necessary to enter into the following restrictive covenants. Without the prior written consent of the Company, Employee shall not, during his employment at the Company and for the thirty-six (36) month period in which he receives severance after termination of employment for any reason:

(a)Engage in or perform services for a Competing Business. “Competing Business” is one which provides the same or substantially similar products and services as those provided by the Company during Employee’s employment, including, but not limited to telecom consulting, telecom field services, wireline EFI&T services, RF engineering, integration engineering, deployment engineering, engineering services, wireless EFI&T services, software, or circuit audits, retrofits or software development, but shall specifically exclude any OEM telecom company or electronic manufacturing services (contract manufacturing) company. The geographic area for purposes of this restriction is the area(s) within the United States and of any Company office or facility in which, from which, or in relation to which Employee performed services for the Company;

(b)Have any indirect or direct financial interest in a Competing Business; provided, however, that the ownership by Employee of any stock listed on any national securities exchange of any corporation conducting a competing business shall not be deemed a violation of this Agreement if the aggregate amount of such stock owned by Employee does not exceed five percent (5%) of the total outstanding stock of such corporation;

(c)Solicit business from, attempt to do business with, or do business with any person or entity that was a customer/client of the Company during Employee’s employment with the Company and which Employee either: (a) called on, serviced, did business with or had contact with during his employment; or (b) became acquainted with or received Confidential Information regarding during his employment. This restriction applies only to business that is in the scope of 

 

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services or products provided by the Company. The geographic area for purposes of this restriction is the area where the customer/client is located and/or does business; or

(d)Solicit, induce or attempt to solicit or induce, on behalf of himself or any other person or entity, any employee of the Company to terminate their employment with the Company and/or to accept employment elsewhere.

EXECUTIVE acknowledges that he has carefully read the above new section 7.4 and has considered all its terms and conditions. EXECUTIVE agrees that said restraints are necessary for the reasonable and proper protection of the COMPANY and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area. EXECUTIVE understands that a remedy at law for any breach or threatened breach of new section 7.4 as set forth herein would be inadequate, or will cause damage to the COMPANY in an amount difficult to ascertain. EXECUTIVE therefore agrees that the COMPANY shall be entitled to temporary and injunctive relief by any competent court in case of any such breach or threatened breach, without proof of actual damages that have been or may be caused to the COMPANY, and without bond, in addition to any other relief to which the COMPANY may be entitled. Additionally, any period or periods of breach of new section 7.4 shall not count toward the restricted period in new section 7.4 but shall instead be added to the restrictive period.  

Should any provision of new section 7.4 be held by a court of competent jurisdiction to be enforceable only if modified, the Parties agree that any such court is expressly authorized to modify any such unenforceable provision of new section 7.4 in lieu of severing such unenforceable provision from the Employment Agreement and this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language or by making such other modifications as it deems warranted to carry out the intent and agreement of the Parties as embodied herein to the maximum extent permitted by law.

8.Breach.  In the event of either Party’s breach of any terms of this Agreement, or any of his or its continuing obligations under the Employment Agreement, the other Party may pursue any and all remedies allowable under state and federal law.  Depending on the interpretation of applicable law, these remedies might include monetary damages, equitable relief, and recoupment of the consideration described in Paragraph 1 of this Agreement.  In the event that any party commences an action for damages, injunctive relief, or to enforce the provisions of this Agreement, the prevailing party in any such action shall be entitled to an award of its reasonable attorney’s fees and all costs, including appellate fees and costs, incurred in connection therewith as determined by the court in any such action.  

9.Voluntary Agreement.  Executive acknowledges that Executive has had an opportunity to review all aspects of this Agreement, the Company is advising and has advised Executive in writing (i.e. through this Agreement) to consult with an attorney of Executive’s own choosing at COMPANY’s cost regarding the effect of this Agreement before Executive signs this Agreement.  EXECUTIVE acknowledges that he consulted with Gardere Wynne Sewell LLP before signing this Agreement.  Executive acknowledges and understands that this Agreement specifically releases and waives all rights and claims Executive may have under the Age Discrimination and Employment Act (“ADEA”) prior to the date on which Executive signs this Agreement.  EXECUTIVE understands he has sixty (60) days within which to decide whether to sign this Agreement, although he may sign this Agreement at any time within the 60 day period.  The Parties expressly agree that any change to the offer, whether material or immaterial, does not restart the running of the 60 day consideration period.  If he does sign the Agreement, he will have an additional seven (7) days after he signs it to change his mind and revoke the Agreement, in which case a written notice of revocation must be delivered to Jimmy “Skip” Hulett, 6400 International Parkway Suite 1000, Plano, Texas 75093, by 5:00 P.M. on or before the seventh day following his signing of this Agreement.  EXECUTIVE understands that the Agreement will not become effective until after that seven-day period has passed and all assets and equipment provided to him for the performance of his duties has been returned prior to the extinguishment of the seven-day period.  EXECUTIVE knowingly and voluntarily agrees to all of the terms in this Agreement and intends to be bound legally by them.

10.Non-Admission.  The Parties expressly acknowledge that the fact and terms of the Agreement are not an admission or concession by COMPANY of any liability or other wrongdoing under any law.  

11.Modifications.  No modification of this Agreement shall be effective unless it is in writing duly signed by all of the Parties hereto.

12.Severability.  The Parties agree that if any provision of this Agreement is declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, including but not limited to the general release language, such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.

13.Governing Law.  The validity, construction and interpretation of this Agreement and the rights and duties of the Parties hereto shall be governed by the laws of the state of Texas without regard to its conflict of law rules.  The Parties agree to venue and jurisdiction in the state and federal courts located in Texas.

 

7

 

14.Return of Assets, Equipment, Materials and Information.  EXECUTIVE acknowledges that, except for EXECUTIVE’s personal financial, compensation, tax, employment, evaluation, and medical information, all materials and information received or generated by him in connection with his employment with the COMPANY, including but not limited to confidential and proprietary information set forth in Paragraph 6, are the sole property of COMPANY.  EXECUTIVE acknowledges that, by the close of business on the Separation Date, he has returned to COMPANY all COMPANY property, including but not limited to confidential and proprietary information set forth in Paragraph 6, office keys, security and credit cards, files, product information, and computer hardware and software (EXECUTIVE confirms he has returned or disabled the original software and all copies in his possession) as requested by the COMPANY.  EXECUTIVE agrees to return, no later than the close of business on the Separation Date, all COMPANY materials and information and all copies thereof that are located or stored, electronically or otherwise, at his home and/or another site other than COMPANY’s offices as requested by the COMPANY.  EXECUTIVE also agrees to return no later than the close of business on the Separation Date, all assets and equipment provided to him for the performance of his duties as requested by the COMPANY.

15.Entire Agreement.  This Agreement constitutes the complete, final and exclusive embodiment of the entire agreement between the Parties with regard to this subject matter.  Executive represents and acknowledges that in executing this Agreement, Executive does not rely on, has not relied on, and specifically disavows any reliance on any communications, promises, statements, inducements, or representation(s), oral or written, by the Company or its agents except as expressly contained in this Agreement.  The Parties further represents that they are relying on their own judgment in entering into this Agreement.    

16.Non-Disparagement.  EXECUTIVE agrees that he will not disparage or criticize the past or present decisions, policies or practices of COMPANY or its officers and executives, and that he will not make disparaging statements about COMPANY, its officers, executives, or any individual or entity with whom COMPANY has or may have a business or personal relationship.  COMPANY agrees it will not disparage or defame EXECUTIVE.  

17.Recommendation.  Subject to EXECUTIVE’s written approval, if EXECUTIVE pursues employment with a third party in the future, COMPANY shall make a positive recommendation and referral of EXECUTIVE and confirm in writing his dates of employment, position, salary and benefits with the Company.

18.Section 409A.  For purposes of the rules under Section 409A of the Internal Revenue Code of 1986, as amended (“the Code”), each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. It is intended that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v).  In addition, to the extent that any expenses, reimbursement, fringe benefit or other, similar plan or arrangement in which the EXECUTIVE participated during the term of the EXECUTIVE’s employment with the COMPANY or thereafter provides for a “deferral of compensation” within the meaning of Section 409A, then such amount shall be reimbursed in accordance with Section 1.409A-3(i)(1)(iv) of the Treasury Regulations, including (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year, (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to any reimbursement or in-kind benefit is not subject to liquidation or exchange for another benefit.  Notwithstanding any other provision to the contrary, in no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Section 409A of the Code and the Treasury Regulations promulgated thereunder be subject to offset by any other amount unless otherwise permitted by Section 409A of the Code. 

19.Counterparts.  This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument but all such counterparts shall constitute one agreement.  The Parties agree a facsimile signature or PDF of an original signature sent via email shall be deemed to be original signatures.   

[Signature Page Follows]

 

8

 

PLEASE READ CAREFULLY.  THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

 

	
 
	
 
	
 
	
JOHN A. GOODMAN

	
 
	
2/18/15
	
 
	
 

	
Dated:
	
 
	
 
	
/s/ John A. Goodman

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
GOODMAN NETWORKS, INC.  

	
 
	
2/18/15
	
 
	
 

	
Dated:
	
 
	
 
	
/s/ Ron B. Hill

	
 
	
 
	
 
	
Ron B. Hill

Chief Executive Officer and President

 

 

9Exhibit 10.2

EIGHTH AMENDMENT TO THAT 2012 HOME SERVICES PROVIDER AGREEMENT 

This Eighth Amendment (the “Eighth Amendment”) to that certain DIRECTV, Inc. 2012 Home Services Provider Agreement dated October 15, 2012 (the “Agreement”) by and Multiband Field Services, Inc.  (“Contractor”), and DIRECTV, LLC (“DIRECTV”), is hereby made and entered into this first (1st) day of January, 2015 (the “Eighth Amendment Effective Date”), as follows:

1.  Amendment.  For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto amend the Agreement, pursuant to paragraph 16 and paragraph 25.d. thereof, as follows:

A.Term.  Section 7 of the Agreement (“Term”) is hereby deleted in its entirety and replaced with the following.

7.Term. The term (the “Term”) of this Agreement shall be effective as of the date written above (the "Effective Date") and shall continue until October 15, 2018.  The Term will automatically renew thereafter for additional, individual one-year periods (each such year a “Renewal Term”), unless either Contractor or DIRECTV gives written notice of termination at least ninety (90) days in advance of expiration of the then-current Term.  The Agreement shall also be terminable for "cause" as set forth herein.

B.EXHIBIT 3.e.(v). Exhibit 3.e.(v) (“PERFORMANCE STANDARDS: CHARGEBACKS and PERFORMANCE INCENTIVES”) of the Agreement shall be deleted in its entirety and replaced with the following:

EXHIBIT 3.e.(v)

PERFORMANCE STANDARDS: PERFORMANCE INCENTIVES AND CHARGEBACKS

 

	
Incentive / Charge Back Matrix 2012 HSP Agreement
	
Work Order Type eligible for calculation

	
 
	
 

	
Service within 30 days- Residential
	
New, Former,  Upgrade, & Service

	
DMA
	
Charge Back 2
	
Charge Back 1
	
Incentive 1
	
Incentive 2
	
 

	
All
	
7.00% or greater
	
6.25% or greater
	
5.00% or less
	
4.50% or less

	
Incentive / Chargeback 
	
$4.00 each
	
$3.00 each
	
$2.50 each
	
$3.50 each

	
SOS30
	
 
	
 
	
6% or less an

 additional $0.50 each
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
Service within 30 days- Commercial
	
New, Former,  Upgrade, & Service Commercial

	
DMA
	
Charge Back
	
 
	
Incentive 
	
 

	
All
	
8.50% or greater
	
7.00% or less

	
Incentive / Chargeback 
	
$20.00 each
	
$20.00 each

	
 
	
 

	
CCK Take Rate Percentage
	
Eligible Activities w/ a closed CCK-All WOs

	
DMA
	
Charge Back
	
 
	
Incentive 1
	
Incentive 2
	
 

	
All
	
CCK RPR  less than 90.00% 
	
0.01% - 2.99% above DMA goal
	
3.00% or greater 

above DMA goal

	
Incentive / Chargeback 
	
$8.00 each
	
$8.00 each
	
$10.00 each

	
 
	
 
	
 
	
 
	
 
	
 

	
Average Days to First Available Production
	
New,  Former & Upgrade

	
DMA
	
Charge Back 2
	
Charge Back 1
	
Incentive 1
	
Incentive 2
	
 

	
All
	
6.00 or greater
	
5.00 or greater
	
4.00 or less
	
3.00 or less

	
Incentive / Chargeback 
	
$6.00 each
	
$5.00 each
	
$5.00 each
	
$6.00 each

	
 
	
 
	
 
	
 
	
 
	
 

 

1

	
Average Days to First Available Service
	
Service

	
DMA
	
Charge Back 2
	
Charge Back 1
	
Incentive 1
	
Incentive 2
	
 

	
All
	
3.50 or greater
	
3.00 or greater
	
2.50 or less
	
2.00 or less

	
Incentive / Chargeback 
	
$6.00 each
	
$5.00 each
	
$5.00 each
	
$6.00 each

	
 
	
 
	
 
	
 
	
 
	
 

	
Equipment Return Rate 
	
IRD Returns

	
DMA
	
Charge Back
	
 
	
Incentive
	
 

	
All
	
80.00% or less
	
90.00% or greater

	
Incentive / Chargeback 
	
$5.00 each IRD
	
$5.00 each IRD

	
 
	
 
	
 
	
 
	
 
	
 

	
Appointment Success
	
New, Former, Upgrade, & Service

	
DMA
	
Charge Back 2
	
Charge Back 1

82.00% or less
	
Incentive 1

85.00% or greater
	
Incentive 2
	
 

	
All
	
79.00% or less
	
88.00% or greater

	
Incentive / Chargeback 
	
$4.00 each
	
$3.00 each
	
$3.00 each
	
$4.00 each

	
 
	
 
	
 
	
 
	
 
	
 

	
Post Call Index Score
	
New, Former, Upgrade, & Service

	
DMA
	
Charge Back 2
	
Charge Back 1
	
Incentive 1
	
Incentive 2
	
 

	
All
	
93 or less
	
93.5 or less
	
95 or greater
	
97 or greater

	
Incentive / Chargeback 
	
$2.00 each
	
$1.00 each
	
$1.00 each
	
$2.00 each

	
 
	
 
	
 
	
 
	
 
	
 

	
Net Promoter Score - Production
	
New, Former & Upgrade

	
DMA
	
 
	
Incentive 1
	
Incentive 2
	
 

	
All
	
 
	
87% or greater
	
90% or greater

	
Incentive / Chargeback 
	
 
	
$2.50 each
	
$3.50 each

	
 
	
 

	
Net Promoter Score - Service
	
Service

	
DMA
	
 
	
Incentive 1
	
Incentive 2
	
 

	
All
	
80% or greater
	
83% or greater

	
Incentive / Chargeback 
	
$2.50 each
	
$3.50 each

	
 
	
 
	
 
	
 
	
 
	
 

	
Completion Rate
	
New

	
DMA
	
Charge Back
	
 
	
Incentive
	
 

	
By DMA
	
Provided Quarterly
	
Provided Quarterly

	
Incentive / Chargeback 
	
$2.00 each
	
$2.00 each

	
 
	
 
	
 
	
 
	
 

Definitions and calculations:

Service within 30 days- Residential shall mean the created service call percentage within thirty days of a prior closed residential truck roll activity.   Residential closed activity includes the following work order types: New Install / Former Customer Installs / Upgrades / Service, calculated monthly. If DMA finishes in incentive for Service within 30 days and 6% or less of created service last month had a prior work order type of service (SOS), an additional $0.50 per WO will be added to incentive payment.

Total created residential service activities from the 1st day of last month through the last day of last month DIVIDED BY total closed residential activities last month

Service within 30 days- Commercial shall mean the opened commercial service call percentage within thirty days of a prior closed commercial truck roll activity.  Commercial closed activity includes the following work order types:  New Install, Former Customer, Upgrades, and Service, calculated monthly.  This metric will be calculated at the organization level.

Total created commercial service activities from the 1st Day of last month through the last day of last month DIVIDED BY total closed commercial activities last month

CCK Take Rate Percentage shall mean the percentage of account level broadband DECAs calculated as added on eligible activities closed with a Broadband Eligible Order Line Item within a month.  DIRECTV’s report shall be pulled on the eighth day of each month for the prior month’s activity. Eligibility for incentive requires a 90% or better CCK Return Path Rate (CCK RPR) at the DMA level.  A successful CCK callback requires two pings to register within 7 days of work order closure along with a closed Broadband Eligible OLI and Closed DECA (internal, wired, or external wireless).  Chargeback will be determined based on CCK RPR only, not CCK take rate.  Individual DMA take rate goals will be set based on 2014 performance and company goals. 

 

2

Added DECAs on eligible closed work orders  DIVIDED BY  total broadband eligible order line items on eligible closed work orders

Average Days To First Available - Production shall mean the average number of days to first available date on all created New Installation, Former, and Upgrade activities within a month.  The first available date refers to the first date within the scheduling tool that is available for a customer to select.

Total number of days from activity created date to first available date for New Installation, Former and Upgrade activities DIVIDED BY the total number of Created New Installation, Former & Upgrade activities

Average Days To First Available - Service shall mean the average number of days to first available date on all created Service activities within a month.  The first available date refers to the first date within the scheduling tool that is available for a customer to select.

Total number of days from activity created date to first available date for Service activities DIVIDED BY the total number of Created Service activities

Equipment Return Rate shall mean non-scrapped, advanced product receivers returned to DIRECTV Repair facilities from equipment swap replacements in the field on service call and upgrade work order types.  This is measured 45 days after the last day of the month in which the swap is recorded (equipment returns subsequent to the applicable return period will not be reconciled).  Each returned IRD is validated by CAM ID and serial number. 

Received Advanced IRDs DIVIDED BY Swapped & Replaced Advanced IRDs 

Appointment Success shall mean the percentage of all closed activities in which the technician (i) arrived within the appointment window, (ii) had no prior negative reschedule activity, or (iii) had no  “Where’s My Tech” Field Service Requests.  This includes New Installs, Former Installs, Upgrades, & Service.

Total number of successful appointments met on closed activities DIVIDED BY the total number of closed activities.

Post Call Index Score shall mean the score as determined by DIRECTV’s third-party vendor outbound surveys.

Sum of Index Scores DIVIDED BY Number of Surveys

Net Promoter Score - Production shall mean the percentage equal to the number of customers who would recommend DIRECTV (promoters) minus the number of customers who would not recommend DIRECTV (detractors) divided by the total number of respondents.  Promoters are considered those individuals who answer with a score of 9 or 10, detractors 1-6.  This calculation is based on eligible closed new installations, former, and upgrade activities.

(# of Promoters - # of Detractors)  DIVIDED BY  # of Respondents

Net Promoter Score - Service shall mean the percentage equal to the number  of customers who would recommend DIRECTV (promoters) minus the number of customers who would not recommend DIRECTV (detractors) divided by the total number of respondents.  Promoters are considered those individuals who answer with a score of 9 or 10, detractors 1-6.  This calculation is based on eligible service activities.

(# of Promoters - # of Detractors) DIVIDED BY # of Respondents

Completion Rate shall mean completed New Install Work Order activities as a percentage of all Completed and Canceled New Install activities (excluding Administrative cancels as determined by DIRECTV), calculated monthly.  DIRECTV’s report shall be pulled on the eighth day of each month for the prior month’s activity. 

Total Closed New Install activities DIVIDED BY the sum of total Closed New Install activities and total Controllable Cancels

Failure by Contractor to comply with either of the two Service within Thirty (30) Days minimum standards and/or either of the two Average Days To First Available appointment metrics  FOR THREE (3) CONSECUTIVE MONTHS within a particular DMA shall be deemed a material breach of this Agreement.  In the event of such a breach by Contractor, Contractor, as of that third consecutive month, will automatically be ineligible to receive incentive earnings, if any, for any metric in the applicable defaulting DMA and shall remain ineligible for any future incentive payment in that particular DMA until the underlying breach is cured.  Additionally, the gross, aggregate chargeback amount calculated for that DMA for that third consecutive month shall be charged back to Contractor.   

 

3

Contractor shall have thirty (30) days from receipt of written notice of such failure to cure its default pursuant to section 8.b. of this Agreement (performance, in this case, shall be measured during the thirty (30) day period following the date of such notice); provided, however, that prior written notice shall not be required to notify Contractor should it become ineligible to receive incentive payments within the impacted DMA(s) as set forth herein.  Failure by Contractor to cure its material breach within this thirty (30) day period post written notification may result in immediate termination by DIRECTV at its sole discretion.  Any failure by Contractor to comply with any particular Performance Standard (other than the customer satisfaction score) for more than three (4) months in any twelve (12) month period during the Term within a particular DMA shall, upon written notification from DIRECTV, constitutes a non-curable material breach, providing DIRECTV with the option to immediately terminate this Agreement pursuant to section 8.c. of this Agreement.  In either event, DIRECTV may, short of termination, elect to remove Contractor from any current DMA (both performing and nonperforming) should Contractor be unable to cure the breach of these performance standards within the allotted cure period.   Furthermore, should Contractor be removed from a portion of a DMA strictly due to performance issues (i.e., a secondary provider is performing Fulfillment Services within one or more of Contractor’s designated DMAs), Contractor shall have sixty (60) days from this date of bifurcation to provide to DIRECTV an action plan (along with evidence of tangible resources, if applicable) reasonably acceptable to DIRECTV whereby DIRECTV can set a reasonable date for Contractor to re-enter the bifurcated portion of the DMA.  Contractor’s inability to provide such a plan within sixty days shall be considered a material breach and DIRECTV reserves all rights as it relates to its options hereunder.  

ADDITIONAL PERFORMANCE-RELATED CHARGEBACKS/BONUSES

In addition to the above, Contractor may be subject to the following chargebacks or earn the following bonuses:

	
(i)
	
DIRECTV has implemented an “On Time Service Guarantee” program which will result in a credit to customers who experience a late-arriving technician or a missed appointment.  This will apply to all Installation, Mover, Upgrade or Service Call Work Orders for residential customers.  The customer shall  be eligible to receive a credit to his/her account if Contractor’s technician, including any Approved Subcontractor, has not arrived by the end of the appointment window (the applicable 4-hour window (or the applicable “first AM/last PM window” during Daylights Savings)).  To the extent that DIRECTV reasonably determines that the customer’s complaint regarding a late or missed appointment is legitimate, Contractor shall be subject to a charge back equal to $50.00.    

	
(ii)
	
In the event that an Office of the President escalation, Contractor will be charged back DIRECTV’s actual cost (including programming or other account credits provided to the affected customer) plus a $50.00 handling fee if it is determined by DIRECTV, in its reasonable discretion, that the issue is based on the poor performance of Contractor, whatever that may be.  To the extent that the customer/pending customer elects to terminate the relationship with DIRECTV as a direct result of this poor performance, DIRECTV shall have the right to charge Contractor back an amount equal to $2,500.00 as a reasonable financial representation of the average market valuation for each DIRECTV customer.  Notwithstanding the foregoing, in the event that an Office of the President escalation is related to an appointment missed and it is reasonably determined by DIRECTV that Contractor or Contractor’s technician did not call or otherwise reasonably inform the customer that the appointment would not be met prior to the end of the applicable window (each an “OOP No Call – No Show”), Contractor shall be charged back an amount equal to $2,500.00.  In the event that the customer customer/pending customer elects to terminate the relationship with DIRECTV as a direct result of the OOP No Call – No Show, DIRECTV shall have the right to charge Contractor back an amount equal to $5,000.00 as a reasonable (i) financial representation of the average market valuation for each DIRECTV customer, and (ii) liquidated damages amount reflecting the damage to DIRECTV’s reputation as a result of the OOP No Call – No Show.

	
(iii)
	
In the event that Contractor scores below a score of 80 on any DIRECTV HSP Security/Fraud Prevention audit, DIRECTV shall charge the Contractor $10,000.00 as a reasonable penalty for failing to maintain a minimum level of security preventing fraud at the applicable Contractor site.  In the event that Contractor scores a 90 or above on a DIRECTV HSP Security/Fraud Prevention audit, DIRECTV will provide Contractor with a $10,000.00 bonus payment.

	
(iv)
	
In the event that Contractor scores below a score of 80 on any DIRECTV HSP Tandem QC audit, DIRECTV shall charge the Contractor $10,000.00 as a reasonable penalty for failing to maintain a minimum level of workmanship quality at the applicable Contractor site.  In the event that Contractor scores a 90 or above on a DIRECTV HSP Tandem QC audit, DIRECTV will provide Contractor with a $10,000.00 bonus payment.

	
(v)
	
In the event that it is reasonably validated by DIRECTV that any phone number other than the DIRECTV customer care number is left with a customer by a Contractor technician during a completed activity, Contractor will be charged $1,500.00 by DIRECTV. DIRECTV will evaluate whether the intention of the provided phone number reasonably appears to be an attempt to circumvent the normal process of a service order being created in order to impact the incentive metric calculation.

	
(vi)
	
Contractor shall maintain a Signature Capture percentage of greater than 80%. Signature Capture shall mean the percentage of work orders closed by a FSTP enabled technician where a digital signature was captured for lease agreements (and Protection Plan orders, if applicable) on new work order types and work order closure on upgrades, former installs, and service work order 

 

4

		
types.  This will be calculated at the Contractor organization level and failure to maintain greater than 80% in any month can result in a charged back of $1.00 per paid work order for the organization in that month.

C. Exhibit 11.  Exhibit 11 of the Agreement (“Marketing of DIRECTV Products to Customers”) shall be deleted in its entirety and replaced with the following:

EXHIBIT 11

Marketing of DIRECTV Products to Customers

THE DIRECTV PROTECTION PLAN

Upon mutual agreement of both Contractor and DIRECTV, Contractor may promote the DIRECTV Protection Plan and educate eligible customers as to its terms and conditions at the point of installation, service or upgrade of the DIRECTV System such that the customer will be familiar with the Protection Plan in order to elect to purchase the Protection Plan from DIRECTV upon service activation through a DIRECTV call center agent or, if approved by DIRECTV, through Contractor closing the installation, service or upgrade Work Order with a unique close code representing customer electing to purchase the Protection Plan service.

1.APPOINTMENT.  DIRECTV hereby appoints Contractor as its representative to market and promote subscriptions for the Protection Plan ("Subscriptions"), on the terms and conditions contained herein.  Contractor may market and promote Subscriptions only to single family residential household customers in the contiguous United States WHILE CONTRACTOR IS PERFORMING, PURSUANT TO THIS AGREEMENT, THE SERVICES ON BEHALF OF DIRECTV FOR THE CUSTOMER.  Contractor may market and promote Subscriptions only for the Protection Plan as described herein, and not any other services DIRECTV may currently offer or may offer in the future; provided, however, that DIRECTV may, in its sole discretion, elect to expand upon the products that Contractor may offer in which case this Exhibit 11 shall be amended to include the terms and conditions related to any such additional products.  DIRECTV may amend the terms of the Protection Plan from time to time on written notice to Contractor and Contractor shall be responsible for relaying the current terms of the Protection Plan to customers.  Contractor hereby accepts such appointment and shall use its best commercial efforts to market and promote Subscriptions.  Contractor may not sell any competing electronic product warranty program, including any program related to the DBS Service, throughout the term of this Agreement.

2.GENERAL OBLIGATIONS.

2.1TRAINING.  DIRECTV shall provide training and/or training materials regarding its Protection Plan to Contractor's training personnel, as DIRECTV reasonably deems necessary.  Contractor shall train its own employees to the satisfaction of DIRECTV.  DIRECTV may require Contractor's employees to attend supplementary training classes from time to time.  Contractor shall be responsible for all expenses and compensation of its employees during such training.

2.2PERSONNEL.  Contractor may allow its employees (including employees of Authorized Subcontractors only) to market and promote the Protection Plan, subject to the conditions herein.

2.3STANDARD POLICIES.  Contractor shall strictly comply with the standard policies and procedures of the Protection Plan as DIRECTV may promulgate for its representatives in written notices, guidelines, and bulletins, as the same may be amended from time to time (collectively "Policies").  The Policies shall be an integral part of this Agreement but may not impair any of Contractor's rights granted herein.

2.4STANDARD OF CONDUCT.  In all of its activities as a representative for DIRECTV and in its own DIRECTV System business, Contractor shall conduct itself in a commercially reputable and ethical manner, shall comply with all applicable laws, and shall engage in no deceptive sales practice or other practice which impugns DIRECTV's commercial reputation and goodwill.

3.TRANSMISSION OF CUSTOMER INFORMATION.  In the event that an eligible customer, after receiving the related materials and information, has expressed to Contractor an interest in purchasing the Protection Plan from DIRECTV, Contractor shall (i) obtain written confirmation of customer’s election (in a manner as shall be communicated by DIRECTV to Contractor), and (ii) transmit to DIRECTV, via DIRECTV’s Work Order system (“Siebel”), or other DIRECTV-specified data transmission procedure, notification of such customer’s interest.

 

5

4.RATES AND TERMS OF SERVICES.

4.1RATES.  DIRECTV shall determine the pricing, terms, and conditions of the Protection Plan in its discretion.  Contractor shall not represent that DIRECTV Protection Plan may be obtained on any different terms or rates, shall not impose additional or different terms and shall not offer customers any discount, rebate, or other material benefits in consideration for subscribing to it, except as expressly authorized by DIRECTV in writing.

4.2CHANGES.  DIRECTV may change the pricing, terms, conditions, and availability of its Protection Plan from time to time in its discretion.  DIRECTV shall notify Contractor of such changes as soon as practicable.  Contractor shall promptly replace point of sale materials as necessary.

4.3MISREPRESENTATIONS.  If Contractor misrepresents or fails to fully disclose any prices or other terms of the DIRECTV Protection Plan to any customer, it shall reimburse DIRECTV any amount which DIRECTV is compelled, or in its reasonable judgment according to its standard practices decides, to pay or credit the customer in compensation for such misrepresentation.  In addition, DIRECTV shall be entitled to offset any such payment or credit by DIRECTV to customers as a result of Contractor’s misrepresentations or omissions against any amounts owed to Contractor by DIRECTV.

5.CUSTOMER ORDERS FOR SERVICE.  Upon receipt of confirmation, via Siebel or other DIRECTV-specified data transmission procedure, that a specific customer has expressed interest in purchasing the Protection Plan, DIRECTV shall use its commercially reasonable efforts to finalize the sale of the Protection Plan to customer through agent activation or customer literature post activation.  All elections by customers to order the Protection Plan shall be subject to acceptance or rejection by DIRECTV in its discretion and Contractor understands and agrees that a customer may ultimately elect not to purchase the Protection Plan even if such customer had previously expressed to Contractor an interest in purchasing the Protection Plan. All Subscription fees shall be billed directly to the Subscriber by DIRECTV.  

6.COMPENSATION.

6.1PROTECTION PLAN COMMISSIONS.  In consideration of Contractor's services in marketing and promoting the customer’s purchase of the DIRECTV Protection Plan, DIRECTV shall pay Contractor commissions ("Protection Plan Commissions") in the amounts and on the terms and conditions set forth below, upon both of the following events (collectively a "Protection Plan Activation"):

(a)DIRECTV's receipt of an Order for the Protection Plan from an eligible customer (i.e., an existing customer not yet subscribing to the Protection Plan or a new customer who has not yet indicated, pursuant to the pending services set forth within the applicable Work Order, that he/she has elected to subscribe to the Protection Plan at service activation) where such Order is evidenced by the customer acknowledging such in writing and transmitted via the DIRECTV handheld application (or evidenced by customer signature on the DIRECTV work order); and DIRECTV's acceptance of such Order of the Protection Plan; or

(b)DIRECTV's receipt of an Up-sell for the Protection Plan from an eligible customer (i.e., an existing customer that already subscribes to the $7.99 Protection Plan and is upsold by the technician to the $19.99 or $24.99 Premier Protection Plan,) where such Up-sell is evidenced by the customer acknowledging such in writing and transmitted via the DIRECTV handheld application (or evidenced by customer signature on the DIRECTV work order) and DIRECTV's acceptance of such Up-sell of the Protection Plan.

 

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6.2COMMISSION RATE.

(a)DIRECTV shall pay Contractor a Protection Plan Commission, for its services in promoting Orders for the DIRECTV Protection Plan, on the terms and conditions in the Agreement and as described below:

 

						
	
Commission Tier
	
Take Rate Range 
	
Commission Payment $7.99 Protection Plan
	
Commission Payment $19.99 or $24.99 Protection Plan
	
60-day Chargeback $7.99 Protection Plan
	
60-day Chargeback $19.99 or $24.99 Protection Plan

	
Tier 1
	
0% to 39.99%
	
$6 
	
$6
	
$6 
	
$6

	
Tier 2
	
40% to 49.99%
	
$8 
	
$8
	
$8 
	
$8

	
Tier 3
	
50% to 59.99%
	
$12 
	
$12
	
$12 
	
$12

	
Tier 4
	
60% or greater 
	
$14 
	
$14
	
$14 
	
$14

 

A 0% to 39.99% take-rate will pay $6 Commission per sale for $7.99 Protection Plan sales and $6 Commission per sale for $19.99 or $24.99 Protection Plan sales, 40% to 49.99% take-rate will pay $8 per sale for $7.99 Protection Plan sales and $8 Commission per sale for $19.99 or $24.99 Protection Plan sales, etc. The Take-Rate is defined as the percentage of eligible customers electing to subscribe to the Protection Plan within a specific measurement period.  The take-rate calculation will be made monthly and based off volume from the previous calendar month.  A 60-day chargeback applies for each tier and will be equal to the corresponding Commission payment.  This commission will be calculated at the DMA level.

 

	
Protection Plan Up-sell Commission

(Up-selling from existing $7.99 to the $19.99 or $24.99 Plan)

	
Commission Tier
	
Take Rate Range 
	
Commission Payment $19.99 or $24.99 Protection Plan
	
60-day Chargeback $19.99 or $24.99 Protection Plan

	
Tier 1
	
0% to 2.99%
	
$10
	
$10

	
Tier 2
	
3% to 5.99%
	
$12
	
$12

	
Tier 3
	
6% to 9.99%
	
$16
	
$16

	
Tier 4
	
10% or greater 
	
$20
	
$20

 

If a customer has an active or pending $7.99 Protection Plan subscription and the customer agrees to an Up-sell Protection Plan subscription to either the $19.99 or $24.99 Premier program, a 0% to 2.99% Up-sell take-rate will pay $10 Commission per sale for $19.99 or $24.99 Protection Plan sales, 3% to 5.99% Up-sell Take-Rate will pay $12 per sale for $19.99 or $24.99 Protection Plan sales, etc.  The take-rate calculation will be made monthly and based off volume from the previous calendar month.  A 60-day chargeback applies for each tier and will be equal to the corresponding Commission payment.  This commission will be calculated at the DMA level.

 

	
Protection Plan Stick Rate Kicker Commission

	
Commission Tier
	
Take Rate Range 
	
Stick Rate Range

88% to 89.99%
	
Stick Rate Range 90% or greater

	
Tier 1
	
40% to 49.99%
	
$1
	
$2

	
Tier 2
	
50% to 59.99%
	
$3
	
$4

	
Tier 3
	
60% or greater
	
$4
	
$5

 

 

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The Kicker component of the commission program is designed to drive high take rate along with high 60-day stick rate performance.  A 40% to 49.99% Take-Rate with a Stick Rate between 88% to 89.99% will pay an extra $1 per sale and a Stick Rate of 90% or greater will pay an extra $2 per sale.  A 50% to 59.99% Take-Rate with a Stick Rate between 88% to 89.99% will pay an extra $3 per sale and a Stick Rate 90% or greater will pay an extra $4 per sale.  Finally, a 60% or greater Take-Rate with a Stick Rate between 88% to 89.99% will pay an extra $4 per sale and a Stick Rate 90% or greater will pay an extra $5 per sale.  The Kicker commission will be calculated monthly and based off a daily 60-day Stick Rate calculation for cancellations.  For clarity and as an example, January commission calculations will include Kicker Commission calculations for the prior October sales.  Stick Rate for October will be calculated as follows: Oct. 1st sales are tracked through Dec. 1st for cancellations and Oct. 2nd sales are tracked through Dec. 2nd for cancellations, etc.  Any cancellations within that 60-day period are included in the Stick Rate calculation and then rolled up monthly.  This commission will be calculated at the DMA level.

(b)DIRECTV's right to subject Contractor to a charge back shall commence upon the earliest to occur of any of the following events, as they relate to each applicable Subscription:

(i)  the termination of the Subscription for any reason (including termination resulting in a change in customer account type to an account type ineligible to purchase the Protection Plan) in the first sixty (60) days of service; or

(ii) the disconnection of the Subscription for any reason; unless a reconnection by Subscriber occurs within the first sixty (60) days of service; or

(iii)the termination of the Subscription for any reason in the first sixty (60) days of service; or

(iv)the cancellation by the Subscriber of its commissionable DIRECTV Programming Package, notwithstanding such customer maintaining its Protection Plan Subscription after said Programming Package cancellation in the first sixty (60) days of service.

(c)An accounting setting forth Contractor’s monthly Protection Plan Subscriber Base shall be included with Contractor’s monthly commissions report it receives as a commissioned DIRECTV Contractor.

(d)No Protection Plan Commissions shall be earned if a customer elects to purchase the Protection Plan on any date subsequent to that calendar date which is the customer’s DIRECTV Programming Service Activation Date or the date on which the Service Call at which the Protection Plan was promoted by the technician.

6.3EXCEPTIONS. 

(a)Notwithstanding anything to the contrary herein, DIRECTV shall not be required to pay any Protection Plan Commissions for:

(i)  any Subscription canceled prior to the commencement of service;

(ii) any Subscription that may inadvertently attach to (or change to) a customer account type not eligible as a commissionable account type as set forth in this Exhibit;

(iii)Orders made by a Subscriber subsequent to the offer made by DIRECTV to customer upon Activation;

(b)DIRECTV shall not be required to pay any Protection Plan Commissions on account of payments received by DIRECTV from Subscribers after the termination of this Agreement or termination of this Protection Plan marketing program.

6.4CHANGES.  Contractor acknowledges that DIRECTV may need to adapt its marketing cost structure to changing conditions from time to time.  Accordingly, DIRECTV may change the Commission Schedule (including the Commission rate) at any time, and from time to time, in its discretion; provided that DIRECTV shall give Contractor at least thirty (30) days prior written notice of the effective date of any such change.  

6.5SET-OFFS BY DIRECTV.  DIRECTV may set-off or recoup any amounts owed to it by Contractor, or by its subsidiaries and affiliates, pursuant to this or any other agreement with DIRECTV, and any damages suffered by DIRECTV due to Contractor's breach hereof or other misconduct, against any amounts which it owes to Contractor.  The foregoing does not limit DIRECTV's right to recover any unrecouped balance.

 

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6.6EMPLOYEE ELIGIBILITY.  Contractor employees (including employees of Authorized Subcontractors only) shall be subject to minimum standards with respect to the number of Subscriber cancellations tied to the monthly sales of each such employee (i.e., the Stick Rate).  Specifically, all employees credited with eight (8) or more commissionable Protection Plan sales in a given month (Commission period) with a corresponding 60-day Stick Rate of 50% or less will subject Contractor to a chargeback equal to 100% of Protection Plan Commissions for sales attributed to that employee in that applicable month.  Furthermore, DIRECTV may deem any and all future sales attributed to a specific employee “Commission-ineligible” if that employee’s Stick Rate falls below the minimum for an extended period of time, as shall be determined by DIRECTV in its sole discretion,

7.TERMINATION. Either party may elect to terminate this promotion and marketing of the Protection Plan by Contractor for any or no cause upon ten (10) business days written notice to the other party

2.  Counterparts.  This Eighth Amendment may be executed in counterparts, each of which shall be deemed an original, and all such counterparts together shall constitute but one and the same instrument.  

Except as expressly provided in this Eighth Amendment, the terms and conditions of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Eighth Amendment through their duly authorized representatives as of January 1, 2015.

ACCEPTED AND AGREED TO:

 

	
Multiband Field Services, Inc.
	
 
	
DIRECTV, LLC
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
By:
	
/s/ Bradley J. Fishel
	
 
	
By:
	
/s/ David W. Baker
	
 

	
Name:
	
Bradley J. Fishel
	
 
	
Name:
	
David W. Baker
	
 

	
Title:
	
Sr. Director, Contracts
	
 
	
Title:
	
Senior Vice President, Field Services
	
 

 

 

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