Document:

Exhibit 10.1

CELLSTAR CORPORATION

RESTRICTED STOCK AWARD AGREEMENT 

1.Award of Restricted Stock.  Pursuant to the CellStar Corporation 2003 Long-Term Incentive Plan (the "Plan"), CellStar Corporation, a Delaware corporation (the "Company"), hereby grants to

___________________________

(the "Participant")

an award (the "Award") of Restricted Stock under the Plan (the "Restricted Stock Award") for ______________ shares of Common Stock of the Company (the "Awarded Shares"), all upon and subject to the terms and conditions set forth in this Award Agreement (the "Agreement").  The Participant will pay no purchase price for the Restricted Stock granted hereunder.    

2.Date of Grant.  The Date of Grant of the Award is _________________.

3.Subject to Plan.  The Award and this Agreement are subject to the terms and conditions of the Plan, and the terms of the Plan shall control to the extent not otherwise inconsistent with the provisions of this Agreement.  Except as otherwise provided herein, the capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan.  The Award is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

4.Vesting.  Except as specifically provided in this Agreement and subject to certain restrictions and conditions set forth in the Plan, the Awarded Shares shall vest as follows:

a.33 1/3% shares shall vest on the first anniversary of the Date of Grant, provided the Participant is employed by the Company or a Subsidiary on that date.    

b.An additional 33 1/3% shares shall vest on the second anniversary of the Date of Grant, provided the Participant is employed by the Company or a Subsidiary on that date.  

c.An additional 33 1/3% shares shall vest on the third anniversary of the Date of Grant, provided the Participant is employed by the Company or a Subsidiary on that date.  

Notwithstanding the foregoing, all of the unvested Awarded Shares shall vest as of, and in the event of, the occurrence of any of the following events: (i) the Participant's death; (ii) the Participant's Termination of Service as a result of his or her Total and Permanent Disability; (iii) the Participant's Termination of Service by the Company or a Subsidiary without Cause (as defined below); (iv) the Participant's voluntary Termination of Service after the attainment of age 65; or (v) a Change of Control.  

 

For purposes of this Section 4, "Cause" shall mean termination because of the Participant's (i) continued unsatisfactory job performance, (ii) misconduct that causes or is likely to cause material economic harm to the Company or its affiliates or that brings or is likely to bring substantial discredit to the reputation of the Company or any of its affiliates, (iii) failure to follow directions of senior management of the Company or any Subsidiary that are consistent with his or her job duties, (iv) conviction of, or entry of a pleading of guilty or nolo contendere to, any crime involving moral turpitude or entry of an order duly issued by any federal or state regulatory agency having jurisdiction in the matter permanently prohibiting Employee from participating in the conduct of the affairs of the Company, any Subsidiary, or their affiliated entities, or (v) any other material breach of any provision of this Agreement.

 

For purposes of this Section 4, a "Change of Control" shall mean any of the following: 

(i)any consolidation merger or share exchange of the Company in which such entity is not the continuing or surviving corporation or pursuant to which shares of the Company's common stock would be converted into cash, securities or other property, other than a consolidation, merger or share exchange of the Company in which the holders of the common stock of the Company immediately prior to such transaction have the same proportionate ownership of common stock of the surviving corporation immediately after such transaction;

(ii)any sale, lease, exchange or other transfer (excluding transfer by way of pledge or hypothecation), in one transaction or a series of related transactions, of all or substantially all of the assets of the Company;

(iii)any approval by the stockholders of the Company of any plan or proposal for the liquidation or dissolution of the Company;

 (iv)the cessation of control (by virtue of their not constituting a majority of directors) of the Board by the individuals (the "Continuing Directors") who (x) at the effective date of the Plan were directors or (y) become directors after the effective date of this Plan and whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then in office who were directors at the effective date of the Plan or whose election or nomination for election was previously so approved; or 

(vi)in a Chapter 11 bankruptcy proceeding, the appointment of a trustee or the conversion of a case involving the Company to a case under Chapter 7.

 

5.Term; Forfeiture.  If the Awarded Shares have not become 100% vested in accordance with Section 4, all unvested Awarded Shares shall be forfeited at 5 p.m. on the date of the Participant's Termination of Service.  Upon any forfeiture, all rights of the Participant with respect to the forfeited Awarded Shares shall cease and terminate, without any further obligation on the part of the Company.

 

6.Restricted Stock and Related Matters.

a.Voting.  The Participant, as record holder of the Awarded Shares, has the exclusive right to vote, or consent with respect to, such Awarded Shares until such time as the Awarded Shares are transferred in accordance with this Agreement or a proxy is granted pursuant to Section 6.d. below; provided, however, that this Section 6.a. shall not create any voting right where the holders of such Awarded Shares otherwise have no such right.

b.Dividends.  The Participant, as record holder of the Awarded Shares, from the Date of Grant of the Awarded Shares until such shares are forfeited pursuant to Section 5 hereof or sold or otherwise disposed of, shall have the right to receive any and all dividends paid on such Awarded Shares, whether such dividends are paid in cash or in-kind.

c.Legend.  The following legend shall be placed on all certificates representing Awarded Shares (in addition to any legend required under applicable state securities laws):

On the face of the certificate:

"TRANSFER OF THIS STOCK IS RESTRICTED IN ACCORDANCE WITH CONDITIONS PRINTED ON THE REVERSE OF THIS CERTIFICATE."

On the reverse:

"THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AND TRANSFERABLE ONLY IN ACCORDANCE WITH THAT CERTAIN CELLSTAR CORPORATION 2003 LONG-TERM INCENTIVE PLAN, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY IN CARROLTON, TEXAS.  NO TRANSFER OR PLEDGE OF THE SHARES EVIDENCED HEREBY MAY BE MADE EXCEPT IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF SAID PLAN.  BY ACCEPTANCE OF THIS CERTIFICATE, ANY HOLDER, TRANSFEREE OR PLEDGEE HEREOF AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SAID PLAN."

The following legend shall be inserted on a certificate evidencing Common Stock issued under the Plan if the shares were not issued in a transaction registered under the applicable federal and state securities laws:

"Shares of stock represented by this certificate have been acquired by the holder for investment and not for resale, transfer or distribution, have been issued pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered for sale, sold or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon an opinion of counsel satisfactory to the Company."

d.Proxies.  Participant may not grant a proxy to any person, other than a revocable proxy not to exceed thirty (30) days in duration granted to another stockholder for the sole purpose of voting for directors of the Company.

7.Non-Assignability and Restrictions on Transfer.  Neither the Award granted under this Agreement, nor any interest in or right associated with such Award, shall be assignable or transferable by the Participant except by will or by the laws of descent and distribution, and with respect to any Awarded Shares, until such Awarded Shares are vested in accordance with Section 4 and not subject to forfeiture in accordance with Section 5.  

8.Specific Performance.  The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance.  The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

9.Representations, Etc.  Each spouse individually is bound by, and such spouse's interest, if any, in any Awarded Shares is subject to, the terms of this Agreement.  Nothing in this Agreement shall create a community property interest where none otherwise exists.

10.Simultaneous Death.  If the Participant and his or her spouse both suffer a common accident or casualty which results in their respective deaths within sixty (60) days of each other, it shall be conclusively presumed, for the purpose of this Agreement, that the Participant died first and the spouse died thereafter.

11.Participant's Acknowledgments.  The Participant acknowledges receipt of a copy of the Plan, which is annexed hereto, and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Award subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement.

12.Law Governing.  This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Texas (excluding any conflict of laws rule or principle of Texas law that might refer the governance, construction, or interpretation of this agreement to the laws of another state).

13.Legal Construction.  In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

14.Covenants and Agreements as Independent Agreements. Each of the covenants and agreements set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement.  The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

15.Entire Agreement.  This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter.  All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement.  Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.

16.Parties Bound.  The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein.  With respect to the Award, no person or entity shall be permitted to acquire any Awarded Shares without first executing and delivering an agreement in the form satisfactory to the Company making such person or entity subject to the restrictions on transfer contained in Section 7 hereof.

17.Modification.  No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties; provided, however, that the Company may change or modify the terms of this Agreement without the Participant's consent or signature if the Company determines, in its sole discretion, that such change or modification is necessary for purposes of compliance with or exemption from the requirements of the Code or any regulations or other guidance issued thereunder.  Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by the Plan.

18.Headings.  The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

19.Gender and Number.  Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

20.Notice.  Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

a.Notice to the Company shall be addressed and delivered as follows:

CellStar Corporation

601 South Royal Lane

Coppell, Texas 75019 

Attn:  Secretary

Facsimile:  (972) 323-4533

b.Notice to the Participant shall be addressed and delivered as set forth on the signature page.

21.Tax Consequences.  The Participant has reviewed with the Participant's own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement.  The Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.  Upon the lapse of restrictions on Awarded Shares, the Company shall withhold the minimum amount sufficient to satisfy federal, state and local taxes (including the Participant's employment tax obligations) that are required to be withheld with respect to such transaction.  Such taxes required to be withheld shall be satisfied through retention by the Company of a number of shares of Common Stock having a Fair Market Value equal to the amount necessary to satisfy such required withholding, provided that the Participant shall take any and all actions deemed necessary by the Committee to enable such retention.  If such withholding would result in a fractional share of Common Stock being payable to the Participant, such fractional share shall be withheld as additional withholding, or at the option of the Company, paid in cash to the Participant.  The foregoing notwithstanding, the Participant understands that the Participant (and not the Company) shall be responsible for the Participant's own tax liability that may arise as a result of the transactions contemplated by this Agreement.  If subsequent to the Company's withholding, as described above, the Company determines that additional taxes must be withheld to satisfy the above withholding requirements, to the extent the Company determines that such additional taxes must be withheld, the Company or, if applicable, any Subsidiary (for purposes of this Section 22, the term "Company" shall be deemed to include any applicable Subsidiary), shall have the right to require the Participant to pay the Company the amount of any such additional taxes that the Company is required to withhold in connection with the Participant's income arising with respect to this Award.  Such payments shall be required to be made when requested by the Company and may be made in cash or, to the extent permitted by the Committee, through the delivery of shares of Common Stock owned by the Participant, which shares have an aggregate Fair Market Value equal to the required additional withholding amount, or any combination thereof.  

With respect to the Restricted Stock Award, the Participant understands that Section 83 of the Code taxes as ordinary income the difference between the amount paid for the shares and the fair market value of the shares as of the date any restrictions on the shares lapse.  In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and ten percent (10%) stockholders also means the period after the purchase of the shares during which such officers, directors and ten percent (10%) stockholders could be subject to suit under Section 16(b) of the Exchange Act.  The Participant understands that the Participant may elect to be taxed at the time the Awarded Shares are granted rather than when the restrictions expire pursuant to Section 4 by filing an election under Section 83(b) of the Code with the Internal Revenue Service within thirty (30) days from the date of grant.

THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE TIMELY THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PARTICIPANT'S BEHALF.

22.PARTICIPANT ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE, NONEMPLOYEE DIRECTOR OR ADVISOR FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH PARTICIPANT'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE PARTICIPANT AS AN EMPLOYEE, NONEMPLOYEE DIRECTOR OR ADVISOR AT ANY TIME, WITH OR WITHOUT CAUSE.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his or her consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 2 hereof.

[Signature Page Follows]

 

 

 

 

 

 

 

 
CELLSTAR CORPORATION

 
By: ___________________________________

Robert A. Kaiser

Chief Executive Officer 

Attest:

________________________________

Elaine Flud Rodriguez, Secretary 

 

PARTICIPANT

 

By:  

 

Participant's Address for Notice:

_____________________________

_____________________________

       

 

 

 

 

 

CONSENT OF SPOUSE

 

 

I, _________________________, spouse of ___________________________, have read and approve the foregoing Agreement.  In consideration of granting of the right to my spouse to receive ______________________ shares of Common Stock of CellStar Corporation as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares issued pursuant thereto under the community property laws of the State of Texas or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement.

Dated:  __________, 2005
"Spouse of Participant"

(Signature)

(Print Name)EMPLOYMENT AGREEMENT

Exhibit 10.2

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this "Agreement"), effective as of November 15, 2005 (the "Effective Date"), is made by and among CellStar Ltd., a Texas limited partnership (the "Employer"), CellStar Corporation, a Delaware corporation and parent company of Employer ("Parent"), and Michael Farrell (the "Employee").

R E C I T A L S

WHEREAS, Employer desires to obtain the benefit of the services of Employee as an employee of Employer for the period of time provided in this Agreement; and

WHEREAS, Employee desires to render services for Employer on the terms and conditions hereinafter provided; and

WHEREAS, Employer desires that Employee participate in Parent's equity and incentive compensation plans and other benefits as provided herein; and

WHEREAS, the Board of Directors of Parent deems it advisable and in the best interests of Parent and Employer to enter into this Agreement with Employee; 

 

A G R E E M E N T

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereby agree as follows:

ARTICLE I

Employment

1.1Employment.  Employee currently serves as an employee of Employer.  Effective as of the Effective Date, Employee's employment shall be governed by, and shall be continued under, the terms and conditions contained in this Agreement.  

1.2Term.  Subject to the provisions of the next sentence, the term of this Agreement shall commence on the Effective Date and shall end on the three (3) year anniversary of the Effective Date (the "Original Term"), unless earlier terminated as provided herein (the period from the Effective Date to the date of the termination of this Agreement is hereinafter referred to as the "Term").  At the expiration of the Original Term, this Agreement shall automatically be renewed for one (1) additional year (the "Renewal Term") unless (i) notice of any decision not to renew this Agreement is given by Employer or Employee at least one hundred eighty (180) days prior to the expiration of the Original Term or (ii) this Agreement is earlier terminated as provided herein.  At the end of the Renewal Term, the Term shall terminate, unless Employee and Employer agree in writing to extend the Term for an additional period.

1.3Position and Duties.

(a)Position.  During the Term, Employee shall serve as Executive Vice President of Finance and Chief Administrative Officer of Employer and Parent, with authority, duties and responsibilities as set forth on Exhibit "A" attached hereto, and shall perform such other services for Employer, Parent and their affiliated entities consistent with such position as may be reasonably assigned to his from time to time by the Chief Executive Officer and/or the board of directors of the general partner of Employer or the Board of Directors of Parent.  During the Term, Employee shall, if reasonably requested to do so and if so elected or appointed, also accept election or appointment, and serve, as an officer and/or director of Employer or any of its affiliated entities and perform the duties appropriate thereto, without additional compensation other than as set forth herein. Employee's actions hereunder shall at all times be subject to the direction of the Chief Executive Officer and/or the board of directors of the general partner of Employer or the Board of Directors of Parent.  Unless otherwise agreed in writing by the parties hereto, Employee shall work out of the Employer's principal place of business located in the Dallas/Fort Worth metropolitan area and Employee shall be required to reside in the Dallas/Fort Worth metropolitan area during the term of this Agreement.

(b)Commitment.  During the Term, Employee shall devote substantially all of his business time, energy, skill and best efforts to the performance of his duties hereunder in a manner that will faithfully and diligently further the business and interests of Employer, Parent and their affiliated entities.  Subject to the foregoing, Employee may serve in any capacity with any civic, educational or charitable organization; provided that such activities and services do not interfere or conflict with the performance of his duties hereunder. Employee shall comply with policies, standards and regulations established from time to time by the Chief Executive Officer and/or the general partner of Employer or the Board of Directors of Parent.

1.4Compensation.

(a)Base Salary.  Subject to Section 1.4(c) below, beginning on the Effective Date, Employer shall pay Employee as compensation an aggregate salary ("Base Salary") of two hundred fifty thousand dollars ($250,000) per year during the Term, or such greater amount as shall be approved in accordance with the policies of Employer and/or Parent, as applicable.  The Base Salary for each year shall be paid by Employer in accordance with the regular payroll practices of Employer.

(b)Annual Incentive Payment.  Employee shall be eligible to participate in an annual incentive plan approved by the Board of Directors of Parent.  For fiscal 2006, based upon policy guidelines as currently determined by the Board of Directors, the target incentive shall be not less than 45% of the Employee's base salary.  Such policy guidelines are subject to change by the Board of Directors.

(c)Withholding.  With respect to any compensation received by Employee with respect to Employee's services for Employer or any of its affiliates, Employer will deduct such withholding and other payroll taxes as are required to be withheld by Employer under applicable law.

(d)Equity Incentive Awards.  Parent will recommend to the Board of Directors of Parent that Employee be granted 35,000 shares of restricted stock (the "Grant"), as the initial equity grant,  subject to such terms as are set forth in Parent's 2003 Long Term Incentive Plan and as are established by the Board of Directors of Parent.  Employee shall be entitled to annual consideration for future grants of stock options and other forms of equity incentive awards in amounts (if any) and on terms and conditions to be determined by the Board of Directors of Parent.

(e)Payment and Reimbursement of Expenses.  During the Term, Employer shall pay or reimburse Employee for all reasonable travel and other expenses incurred by Employee in performing his obligations under this Agreement in accordance with the policies and procedures of Employer or Parent, provided that Employee properly accounts therefor in accordance with the regular policies of Employer or Parent, as applicable.

(f)Fringe Benefits and Perquisites.  During the Term, Employee shall be entitled to participate in or receive benefits under any stock purchase, profit-sharing, pension, retirement, paid time off, life, medical, dental, disability or other plan or arrangement made generally available by Employer or Parent to employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements; provided, however, Employee shall be credited with the greater of 10 years or his actual years of service with Employer as of the Effective Date for purposes of determining eligibility and vesting for paid time off and short-term disability benefits.  Without limiting the generality of the foregoing, Employer shall maintain long-term disability insurance for Employee that provides for annual disability payments equal to the lesser of (i) sixty percent (60%) of Employee's Base Salary, after giving effect to all other disability benefits that would be payable to Employee by Parent, Employer or government agencies, or (ii) such lesser amount that may be payable under insurance policies that Employer can purchase in accordance with normal insurance underwriting standards. 

1.5Termination by Employer.

(a)Disability.  Employer may terminate this Agreement for Disability. "Disability" shall exist if, because of ill health or physical or mental disability, Employee shall have been unable to perform the essential functions of his position under this Agreement, after reasonable accommodation by Employer, as determined in good faith by Parent's Board of Directors or a committee thereof, for a period of one hundred eighty (180) consecutive days, or if, in any 12-month period, Employee shall have been unable or shall have failed to perform his duties for a period of one hundred thirty (130) or more business days, irrespective of whether or not such days are consecutive days.

(b)Cause.  Employer may terminate Employee's employment for Cause. Termination for "Cause" shall mean termination because of Employee's (i) failure to perform his duties under this Agreement, (ii) willful misconduct that causes or is likely to cause material economic harm to Employer, Parent or their affiliated entities or that brings or is likely to bring material discredit to the reputation of Employer, Parent or any of their affiliated entities, as determined by the Board of Directors of Parent in good faith, (iii) failure to substantially follow directions of the Chief Executive Officer and/or the general partner of Employer or the Board of Directors of Parent that are consistent with his duties under this Agreement, provided, that no act, or failure to act, on Employee's part shall be deemed to constitute Cause unless done, or omitted to be done, by Employee not in good faith and without reasonable belief that Employee's act, or failure to act, was in or not opposed to the best interest of Employer, (iv) conviction of, or entry of a pleading of guilty or nolo contendere to, any crime involving moral turpitude or entry of an order duly issued by any federal or state regulatory agency having jurisdiction in the matter permanently prohibiting Employee from participating in the conduct of the affairs of Employer, Parent or their affiliated entities, or (v) any other material breach of any provision of this Agreement. Items (i), (ii), (iii) and (v) of this Section shall not constitute Cause unless Employer or Parent notified Employee thereof in writing, specifying in reasonable detail the basis therefor and stating that it is grounds for Cause. Furthermore, if Employee's actions are curable, items (i), (ii), (iii) and (v) of this Section shall not constitute Cause unless Employee fails to cure such matter within thirty (30) days after such notice is sent or given under this Agreement. Notwithstanding the previous sentence, if Employer has given notice to Employee of the same action covered by item (i), (ii), (iii), or (iv) on two separate occasions, Cause shall exist for terminating Employee upon the giving of the second notice, and Employee shall not have the right to cure such matter covered by the second notice. It is understood that "Cause" shall not include a failure to perform due to a Disability.

(c)Without Cause.  Employer may, at any time, terminate Employee's employment Without Cause. Termination "Without Cause" shall mean termination of Employee's employment by Employer other than termination for Cause or for Disability.

	Employer Explanation of Termination.  Upon termination of this Agreement by Employer, Employer shall give prompt written notice (the "Employer Termination Notice") to Employee advising Employee of such termination.  The Employer Termination Notice shall state in reasonable detail the basis for such termination and shall indicate whether the termination is being made for Cause, Without Cause or for Disability.  

	Definition of Date of Termination.  "Date of Termination" shall mean the last day of Employee's employment.

	Payments upon Termination by Employer.  After termination by Employer, Employer shall provide the following payments to Employee:

(i)If Employer terminates Employee's employment for Disability, Employer's obligation to pay salary and benefits pursuant to Section 1.4 (Compensation) shall terminate, except that Employer shall pay Employee accrued but unpaid salary and benefits pursuant to Section 1.4 (Compensation) through the Date of Termination, after giving effect to all disability benefits received by Employee under the terms of any applicable disability policy.  

(ii)If Employer terminates Employee's employment for Cause, then Employer's obligation to make payments and provide benefits pursuant to Section 1.4 (Compensation) shall terminate, except that Employer shall pay Employee his accrued but unpaid Base Salary and benefits pursuant to Section 1.4 (Compensation) through the Date of Termination; provided, however, that Employee shall not be entitled to any payment pursuant to Section 1.4(b) (Annual Incentive Payment) for the fiscal year of Parent in which such termination occurs.

(iii)Subject to Section 1.7(b) (Termination Following a Change in Control), if Employer terminates Employee's employment Without Cause, then Employer shall pay to Employee, as severance pay in a lump sum on the thirtieth (30th) day following the Date of Termination, the following amounts:

(1)his accrued but unpaid Base Salary through the Date of Termination at the rate in effect as of the Date of Termination; and

(2)in lieu of any further Base Salary, annual incentive payments or other forms of compensation for periods subsequent to the Date of Termination, an amount equal to the result obtained from the following equation:

[(S+B) / 365] x D

where 

S = Employee's Base Salary at the rate in effect as of the Date of Termination.

B = the greater of (i) the amount of the annual incentive payment made (or to be made) to Employee pursuant to Section 1.4(b) (Annual Incentive Payment) for the fiscal year of Parent immediately preceding the fiscal year that includes the Date of Termination or (ii) the average of the annual incentive payments made (or to be made) to Employee for each of the last three fiscal years of Parent immediately preceding the fiscal year that includes the Date of Termination 

D = in the event the Date of Termination occurs during the first year of this Agreement, three hundred sixty five (365), and thereafter during the term of this Agreement, the lesser of (i) seven hundred thirty (730) and (ii) the number of days from the Date of Termination to the last day of the Original Term (or, if such termination occurs within one hundred eighty (180) days of the expiration of the Original Term and neither Employee nor Employer has given prior notice of their decision to not renew this Agreement, the last day of the Renewal Term), provided, in no event shall the number of days determined under this item (ii) be less than three hundred sixty-five (365) days

In addition, Employee will be entitled to (A) a prorated portion of any annual incentive payment earned for the fiscal year in which his employment is terminated, if earned in accordance with the terms of its grant and (B) the services of an outplacement consultant who is selected by Employer and reasonably acceptable to Employee and whose fees are paid by Employer.

(g)Waiver of Other Rights upon Employer Termination.  Employee hereby acknowledges and agrees that the payments by Employer under Section 1.5(f) ( Payments upon Termination by Employer) shall be the sole and exclusive remedy of Employee for termination of Employee's employment by Employer and Employee hereby waives any and all other remedies under law or in equity.

1.6Termination by Employee.

(a)Company Breach.  Employee may terminate his employment hereunder for Company Breach.  For purposes of this Agreement, a "Company Breach" shall be deemed to occur in the event of a material breach of this Agreement by Employer or Parent; provided, however, that Employee shall not be entitled to terminate for Company Breach unless Employee notifies Employer thereof in writing, specifying in reasonable detail the basis therefor and stating that it is grounds for Company Breach, and unless Employer fails to cure such Company Breach within thirty (30) days after such notice is sent or given under this Agreement.  For purposes of this Agreement, a material breach by Employer or Parent shall include, without limitation, (i) the reduction in Employee's Base Salary as in effect on the Effective Date, or (ii) a change in Employee's duties or responsibilities with Employer or Parent that represents a substantial reduction of the duties or responsibilities of Employee as in effect immediately prior thereto, and  Employee does not expressly consent to such reduction in writing.

(b)Voluntary Resignation.  During the Term, Employee may voluntarily terminate his employment upon thirty (30) days prior written notice to Employer, which notice may be waived by Employer in Employer's discretion. "Voluntary Resignation" shall mean termination of Employee's employment by Employee other than termination for Company Breach.

(c)Employee Explanation of Termination.  Upon termination of this Agreement by Employee, Employee shall give prompt written notice (the "Employee Termination Notice") to Employer of such termination.  The Employee Termination Notice shall state in reasonable detail the basis for such termination and shall indicate whether the termination is being made for Company Breach or if the termination is due to Voluntary Resignation. 

(d)Payments upon Termination by Employee.  Employer shall provide the following payments to Employee upon Employee's termination of this Agreement:

(i)If Employee's termination is due to Voluntary Resignation, then Employer's obligation to make payments and provide benefits pursuant to Section 1.4 (Compensation) shall terminate, except that Employer shall pay Employee his accrued but unpaid Base Salary and benefits pursuant to Section 1.4 (Compensation) through the Date of Termination; provided, however, that Employee shall not be entitled to any payment pursuant to Section 1.4(b) (Annual Incentive Payment) for the fiscal year of Parent in which such termination occurs. 

(ii)Subject to Section 1.7(b) (Termination Following a Change in Control), if Employee terminates his employment for Company Breach, then Employee shall be entitled to the payments specified in Section 1.5(f)(iii) as if Employee were terminated by Employer Without Cause; provided, that if the termination for Company Breach is based upon a material reduction by Employer of Employee's Base Salary, then for the purposes of the calculations set forth in Section 1.5(f)(iii), Employee's Base Salary as of the Date of Termination shall be deemed to be Employee's Base Salary immediately prior to the reduction that Employee claims as grounds for Company Breach. 

(e)Waiver of Other Rights upon Employee Termination.  Employee hereby acknowledges and agrees that the payments by Employer under Section 1.6(d) (Payments upon Termination by Employee) shall be the sole and exclusive remedy of Employee for termination of Employee's employment by Employee, and Employee hereby waives any and all other remedies under law or in equity. 

1.7Change in Control.

(a)Definition of Change in Control.  For the purposes of this Agreement, a "Change in Control" shall mean any of the following:

(i)any consolidation or merger of Parent in which Parent is not the continuing or surviving corporation or pursuant to which shares of Parent's common stock would be converted into cash, securities or other property, other than a merger of Parent in which the holders of Parent common stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger (subject to adjustment for rounding or fractional interests resulting therefrom);

(ii)any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of Parent;

(iii)any approval by the stockholders of Parent of any plan or proposal for the liquidation or dissolution of Parent;

(iv)the members of the Board of Directors of Parent on the date hereof (the "Incumbent Directors") cease to be a majority of the members of that Board; provided that any individual becoming a director subsequent to the date hereof whose election or nomination for election by the Parent's stockholders was approved by a majority of the Incumbent Directors shall be considered an Incumbent Director; or

(v)subject to applicable law, in a Chapter 11 bankruptcy proceeding, the appointment of a trustee or the conversion of a case involving Parent to a case under Chapter 7.

	Termination Following a Change in Control.  Notwithstanding the provisions of Section 1.5 (Termination by Employer) or Section 1.6 (Termination by Employee) hereof, if, during the twenty-four (24) month period after a Change in Control, Employee terminates his employment for Company Breach or Forced Relocation (as defined below), or if Employer or Parent terminates Employee Without Cause during such period, then in lieu of any payments that Employee would be otherwise entitled to receive pursuant to Section 1.5(f)(iii) or Section 1.6(d)(ii) of this Agreement, Employer shall pay to Employee as severance pay and as liquidated damages (because actual damages are difficult to ascertain), in a lump sum, in cash, within thirty (30) days after termination, an amount as follows:

	if such termination occurs during the first year of this Agreement, an amount which is equal to one (1) time, and

	if such termination occurs during the second year of this Agreement or thereafter during the term of this Agreement, an amount which is equal to two (2) times,

the sum of (A) Employee's Base Salary as of the Date of Termination (or such greater amount of Base Salary that was paid to Employee prior to any material salary reduction that serves as the basis for termination by Employee upon Company Breach) plus (B) the greater of (x) the amount of the annual incentive payment that Employee received (or will receive) pursuant to Section 1.4(b) (Annual Incentive Payment) for the fiscal year of Parent immediately preceding the fiscal year of the Date of Termination or (y) the average of the annual incentive payments made (or to be made) to Employee for each of the last three fiscal years of Parent immediately preceding the fiscal year that includes the Date of Termination; provided, however, that if the Date of Termination occurs during the first year of this Agreement, Employee shall be deemed to have received an Annual Incentive Payment in the fiscal year of Parent immediately preceding the fiscal year of the Date of Termination in an amount equal to not less than 80% of 45% of Base Salary for purposes of calculating the cash payment due hereunder; and provided, further however, that if such payment, either alone or together with other payments or benefits, either cash or non-cash, that Employee has the right to receive from Employer, including, but not limited to, accelerated vesting or payment of any deferred compensation, options, stock appreciation rights or any benefits payable to Employee under any plan for the benefit of employees, would constitute an "excess parachute payment" (as defined in Section 280G of the Internal Revenue Code of 1986), then such payment or other benefit shall be reduced to the largest amount that will not result in receipt by Employee of a parachute payment. The determination of the amount of the payment described in this Section shall be made by Parent's independent auditors.  

In addition, Employee will be entitled to (X) the services of an outplacement consultant who is selected by Employer and reasonably acceptable to Employee and whose fees are paid by Employer and (Y) reimbursement from Employer for all reasonable costs and expenses (including without limitation, attorneys' fees) incurred by Employee in enforcing the provisions of this Section 1.7(b) or Section 1.8 (Employee Benefits after Termination) against Employer or Parent.

For the purposes of this Section 1.7(b), after a Change in Control, "Forced Relocation" shall mean Parent or Employer requiring Employee to be based at any place outside a fifty (50) mile radius of Parent's Carrollton, Texas headquarters as in use on the date of this Agreement, except for reasonable travel on behalf of Employer or Parent.

Employee hereby acknowledges and agrees that the payments by Employer under this Section 1.7(b) shall be the sole and exclusive remedy of Employee for termination of Employee's employment Without Cause or by reason of a Company Breach or Forced Relocation within the twenty-four (24) month period following a Change in Control, and Employee hereby waives any and all other remedies under law or in equity.

1.8Employee Benefits after Termination.   Employer shall maintain in full force and effect (to the extent consistent with past practice), for the continued benefit of Employee and, if applicable, his spouse and children, the employee benefits set forth in subsections 1.4(f) (Fringe Benefits and Perquisites) through the Date of Termination (subject to the provisions of Section 1.5(f)(i)); provided, that his continued participation or, if applicable, the participation of his spouse and children, is possible under the general terms and conditions of such plans and programs.  Following the Date of Termination, Employee and his eligible dependents shall be eligible for continued health coverage in accordance with the terms of applicable law. Notwithstanding the foregoing, if Employee is terminated Without Cause or resigns upon a Company Breach, or resigns as a result of a Forced Relocation within the twenty-four (24) month period following a Change in Control, then Employer shall maintain health and life insurance coverage for the benefit of Employee and, if applicable, his spouse and children, for a period of time equal to (i) if the Date of Termination is not within the twenty-four (24) month period after a Change in Control, the lesser of (A) five hundred forty five (545) days and (B) the number of days utilized in the formula specified in Section 1.5(f)(iii) above, or (ii) if the Date of Termination is within the twenty-four (24) month period after a Change in Control, the number of years utilized in the  formula specified in Section 1.7(b); provided, however, that Employer's obligation to provide such health and life insurance coverage shall be reduced to the extent that Employer is not able to obtain such coverage in accordance with normal insurance underwriting standards.  Such insurance shall be maintained in substantially the same manner (including without limitation, coverage amounts, deductibles and level of premium contributions required by Employee) as it was maintained immediately prior to the Date of Termination. 

1.9Death of Employee.  Notwithstanding any other provision of this Agreement to the contrary, if Employee dies prior to the expiration of this Agreement, Employee's employment and other obligations under this Agreement shall automatically terminate and all compensation to which Employee is or would have been entitled hereunder (including without limitation under Sections 1.4(a) (Base Salary) and 1.4(b) (Annual Incentive Payment)) shall terminate as of the end of the month in which Employee's death occurs; provided, however, that (i) Employer shall pay to Employee's estate, as soon as practicable, a prorated amount of the annual incentive payment specified in Section 1.4(b) for the fiscal year of Parent in which Employee's death occurs, if earned in accordance with Parent's annual incentive plan; and (ii) for the balance of the month in which Employee's death occurs, Employee's spouse and children shall be entitled to receive their benefits under Employer's group hospitalization, medical and dental plans (if any), to the extent permitted under the terms of such plans, and thereafter Employee's dependents shall have a right to continued health coverage in accordance with the terms of applicable law.

ARTICLE 2

Non-Competition and Confidentiality

2.1Training/Confidential Information.  For purposes of this Article 2 (Non-Competition and Confidentiality), the term "the Company" shall be construed to include Employer, Parent and any and all Affiliates of Employer and Parent.   

The Company shall provide Employee with specialized knowledge and training regarding the business in which the Company is involved, and will provide Employee with initial and ongoing confidential information and trade secrets of the Company (hereinafter referred to as "Confidential Information").  For purposes of this Agreement, Confidential Information includes, but is not limited to:

(a)Customer lists and prospect lists developed by the Company;

(b)Information regarding the Company's customers which Employee acquired as a result of his employment with Employer, including but not limited to, customer contracts, work performed for customers, customer contacts, customer requirements and needs, data used by the Company to formulate customer bids, customer financial information and other information regarding the customer's business;

(c)Information regarding the Company's vendors which Employee acquired as a result of his employment with Employer, including but not limited to, product and service information and other information regarding the business activities of such vendors;

(d)Information related to the Company's business, including but not limited to marketing strategies and plans, sales procedures, operating policies and procedures, pricing and pricing strategies, business plans, sales, profits, and other business and financial information of the Company;

(e)Training materials developed by and utilized by the Company;

(f)Any other information which Employee acquired as a result of his employment with Employer and which Employee has a reasonable basis to believe the Company would not want disclosed to a business competitor or to the general public; and 

(g)Information which:

(i)is proprietary to, about or created by the Company;

(ii)gives the Company some competitive advantage, the opportunity of obtaining such advantage or the disclosure of which could be detrimental to the interests of the Company;

(iii)is not typically disclosed to non-employees by the Company, or otherwise is treated as confidential by the Company; or

(iv)is designated as Confidential Information by the Company or from all the relevant circumstances should reasonably be assumed by Employee to be confidential to the Company.

Notwithstanding the foregoing, Confidential Information shall not include any information that is or has become public knowledge, other than by acts by Employee or representatives of Employee in violation of this Agreement.

2.2Non-Disclosure. Employee acknowledges, understands and agrees that all Confidential Information, whether developed by the Company or others or whether developed by Employee while carrying out the terms and provisions of this Agreement (or previously while serving as an officer of the Company), shall be the exclusive and confidential property of the Company and (i) shall not be disclosed to any person (except as otherwise required by law or legal process) other than employees of the Company and professionals engaged on behalf of the Company, and other than disclosure in the scope of the Company's business in accordance with the Company's policies for disclosing information, (ii) shall be safeguarded and kept from unintentional disclosure and (iii) shall not be used for Employee's personal benefit. Subject to the terms of the preceding sentence, Employee shall not use, copy or transfer Confidential Information other than as is necessary in carrying out his duties under this Agreement.

2.3Return of Company Property and Information. Upon termination of employment, or at any earlier time as directed by the Company, Employee shall immediately deliver to the Company any and all Confidential Information in Employee's possession, any other documents or information which Employee acquired as a result of his employment with Employer, and any copies of such documents/information.  Employee shall not retain any originals or copies of such documents or materials related to the Company's business which Employee came into possession of or created as a result of his employment at the Company. Employee acknowledges that such information, documents and materials are the exclusive property of the Company.  Upon termination of employment, or at any earlier time as directed by the Company, Employee shall immediately deliver to the Company any property of the Company in Employee's possession. Employee agrees that should he fail to return any Company property, the Company shall be entitled to deduct from any sums otherwise due Employee (including, but not necessarily limited to wages and expense reimbursements) the cost and/or value of any property which Employee fails to return, up to the maximum amount allowed by law. Employee hereby authorizes the Company to deduct and/or withhold any such sums from Employee's wages and/or other sums due to Employee.

2.4Non-Competition.
(a)Description of Proscribed Actions. During the Term and for a period thereafter equal to (X) in the event of a termination Without Cause, resignation for Company Breach or resignation for Forced Relocation pursuant to Section 1.7(b) (Termination Following a Change in Control), twelve (12) months, and (Y) in all other cases, eighteen (18) months, in consideration for the obligations of Employer and Parent hereunder, including without limitation their disclosure (pursuant to Section 2.1 (Training/Confidential Information) above) of Confidential Information, Employee shall not, unless approved in writing by the Chief Executive Officer of Parent or a duly passed resolution of the Board of Directors of Parent:

(i)directly or indirectly, engage or invest in, own, manage, operate, control or participate in the ownership, management, operation or control of, be employed by, associated or in any manner connected with, or render services or advice to, any Competing Business (defined below); provided, however, that Employee may invest in the securities of any enterprise (but without otherwise participating in the activities of such enterprise) if (x) such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Exchange Act and (y) Employee is not the Beneficial Owner of more than five percent (5%) of the outstanding capital stock of such enterprise;

(ii)directly or indirectly, either as principal, agent, independent contractor, consultant, director, officer, employee, employer, advisor (whether paid or unpaid), stockholder, partner or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person or entity, solicit, divert or take away any suppliers, customers or clients of the Company or any of its Affiliates; or

(iii)directly or indirectly, either as principal, agent, independent contractor, consultant, director, officer, employee, employer, advisor (whether paid or unpaid), stockholder, partner or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person or entity, either (A) hire, attempt to hire, contact or solicit with respect to hiring, any employee of Employer or Parent or any Affiliate thereof, (B) induce or otherwise counsel, advise or encourage any employee of Employer, Parent or any Affiliate thereof to leave the employment of Employer, Parent or any Affiliate thereof, or (C) induce any representative or agent of Employer, Parent or any Affiliate thereof to terminate or modify its relationship with Employer, Parent or such Affiliate.

(b)Judicial Modification. Employee agrees that if a court of competent jurisdiction determines that the length of time or any other restriction, or portion thereof, set forth in this Section 2.4 (Non-Competition) is overly restrictive and unenforceable, the court may reduce or modify such restrictions to those which it deems reasonable and enforceable under the circumstances, and as so reduced or modified, the parties hereto agree that the restrictions of this Section 2.4 (Non-Competition) shall remain in full force and effect. Employee further agrees that if a court of competent jurisdiction determines that any provision of this Section 2.4 (Non-Competition) is invalid or against public policy, the remaining provisions of this Section 2.4 (Non-Competition) and the remainder of this Agreement shall not be affected thereby, and shall remain in full force and effect.

(c)Nature of Restrictions. Employee acknowledges that the business of Employer and Parent and their Affiliates is international in scope and that the restrictions imposed by this Agreement are legitimate, reasonable and necessary to protect Employer's, Parent's and their Affiliates' investment in their businesses and the goodwill thereof. Employee acknowledges that the scope and duration of the restrictions contained herein are reasonable in light of the time that Employee has been or will be engaged in the business of Employer, Parent and/or their Affiliates, and Employee's relationship with the suppliers, customers and clients of Employer, Parent and their Affiliates. Employee further acknowledges that the restrictions contained herein are not burdensome to Employee in light of the consideration paid therefor and the other opportunities that remain open to Employee. Moreover, Employee acknowledges that he has other means available to his for the pursuit of his livelihood.

(d)Competing Business. "Competing Business" shall mean any individual, business, firm, company, partnership, joint venture, organization, or other entity engaged in the wholesale distribution or retail sales of wireless communication equipment, similar to Employer,  in any domestic or international market area in which Employer, Parent or any of their Affiliates does business at any time during Employee's employment with Employer or any of its Affiliates.

2.5Injunctive Relief. Because of Employee's experience and reputation in the industries in which Employer, Parent and their Affiliates operate, and because of the unique nature of the Confidential Information, Employee acknowledges, understands and agrees that Employer and Parent will suffer immediate and irreparable harm if Employee fails to comply with any of his obligations under Article 2 (Non-Competition and Confidentiality) of this Agreement, and that monetary damages will be inadequate to compensate Employer and Parent for such breach. Accordingly, Employee agrees that Employer and Parent shall, in addition to any other remedies available to them at law or in equity, be entitled to injunctive relief to enforce the terms of Article 2 (Non-Competition and Confidentiality), without the necessity of proving inadequacy of legal remedies or irreparable harm.

 

ARTICLE 3

Representations and Warranties by Employee

Employee hereby represents and warrants, the same being part of the essence of this Agreement, that, as of the Effective Date, he is not a party to any agreement, contract or understanding, and that no facts or circumstances exist, that would in any way restrict or prohibit his from undertaking or performing any of his obligations under this Agreement.  The foregoing representation and warranty shall remain in effect throughout the Term.

ARTICLE 4

Indemnification

Parent agrees to indemnify, and advance expenses to, Employee to the extent provided in the Certificate of Incorporation and Bylaws of Parent as of the date of this Agreement. To the extent that a change in the Delaware General Corporation Law or other applicable law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under Parent's Certificate of Incorporation and Bylaws and this Agreement, it is the intent of the parties hereto that Employee shall enjoy by this Agreement the greater benefits so afforded by such change.

ARTICLE 5

Miscellaneous

5.1Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

5.2Indulgences, Etc.  Neither the failure nor any delay on the part of either party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power, or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.

5.3Employee's Sole Remedy. Employee's sole remedy shall be against Employer or Parent for any claim, liability or obligation of any nature whatsoever arising out of or relating to this Agreement or an alleged breach of this Agreement or for any other claim arising out of the termination of Employee's employment hereunder (collectively, "Employee Claims"). Employee shall have no claim or right of any nature whatsoever against any of Employer's or its Affiliates' directors, former directors, officers, former officers, employees, former employees, stockholders, former stockholders, agents, former agents or the independent counsel in their individual capacities arising out of or relating to any Employee Claim. Employee hereby releases and covenants not to sue any person other than Employer or Parent over any Employee Claim. The persons described in this Section 5.3 (other than Employer, Parent and Employee) shall be third-party beneficiaries of this Agreement for purposes of enforcing the terms of this Section 5.3 (Employee's Sole Remedy) against Employee.

5.4Notices. All notices, requests, demands and other communications required or permitted under this Agreement and the transactions contemplated herein shall be in writing and shall be deemed to have been duly given, made and received when sent by telecopy (with a copy sent by mail) or when personally delivered or one business day after it is sent by overnight service, addressed as set forth below:

If to Employee:

Michael Farrell

MJF Financial, Inc.

8528 Davis Blvd. #134-165

North Richland Hills, Texas 76180

If to Employer or Parent:

CellStar Corporation

601 S. Royal Lane
Coppell, Texas 75019

Attn: Chief Executive Officer

Any party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this Section for the giving of notice, which shall be effective only upon receipt.

5.5Provisions Separable. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

5.6Entire Agreement. This Agreement contains the entire understanding between the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written (including without limitation, the Old Employment Agreement), except as herein contained, which shall be deemed terminated effective immediately. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing.

5.7Headings; Index. The headings of paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

5.8Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without giving effect to principles of conflict of laws.

5.9Dispute Resolution. Subject to Employer's and Parent's right to seek injunctive relief in court as provided in Section 2.5 (Injunctive Relief) of this Agreement, any dispute, controversy or claim arising out of or in relation to or connection to this Agreement, including without limitation any dispute as to the construction, validity, interpretation, enforceability or breach of this Agreement, shall be exclusively and finally settled by arbitration, and any party may submit such dispute, controversy or claim, including a claim for indemnification under this Section 5.9 (Dispute Resolution), to arbitration.

(a)Arbitrators. The arbitration shall be heard and determined by one arbitrator, who shall be impartial and who shall be selected by mutual agreement of the parties; provided, however, that if the dispute involves more than $2,000,000, then the arbitration shall be heard and determined by three (3) arbitrators. If three (3) arbitrators are necessary as provided above, then (i) each side shall appoint an arbitrator of its choice within thirty (30) days of the submission of a notice of arbitration and (ii) the party-appointed arbitrators shall in turn appoint a presiding arbitrator of the tribunal within thirty (30) days following the appointment of the last party-appointed arbitrator. If (x) the parties cannot agree on the sole arbitrator, (y) one party refuses to appoint its party-appointed arbitrator within said thirty (30) day period or (z) the party-appointed arbitrators cannot reach agreement on a presiding arbitrator of the tribunal, then the appointing authority for the implementation of such procedure shall be the Senior United States District Judge for the Northern District of Texas, who shall appoint an independent arbitrator who does not have any financial interest in the dispute, controversy or claim. If the Senior United States District Judge for the Northern District of Texas refuses or fails to act as the appointing authority within ninety (90) days after being requested to do so, then the appointing authority shall be the Chief Executive Officer of the American Arbitration Association, who shall appoint an independent arbitrator who does not have any financial interest in the dispute, controversy or claim. All decisions and awards by the arbitration tribunal shall be made by majority vote.

(b)Proceedings. Unless otherwise expressly agreed in writing by the parties to the arbitration proceedings:

(i)The arbitration proceedings shall be held in Dallas, Texas, at a site chosen by mutual agreement of the parties, or if the parties cannot reach agreement on a location within thirty (30) days of the appointment of the last arbitrator, then at a site chosen by the arbitrators;

(ii)The arbitrators shall be and remain at all times wholly independent and impartial;

(iii)The arbitration proceedings shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as amended from time to time;

(iv)Any procedural issues not determined under the arbitral rules selected pursuant to item (iii) above shall be determined by the law of the place of arbitration, other than those laws which would refer the matter to another jurisdiction;

(v)Subject to Employee's right to recover reasonable costs and expenses as set forth in Section 1.7(b) (Termination Following a Change in Control), the costs of the arbitration proceedings (including attorneys' fees and costs) shall be borne in the manner determined by the arbitrators;

(vi)The decision of the arbitrators shall be reduced to writing; final and binding without the right of appeal; the sole and exclusive remedy regarding any claims, counterclaims, issues or accounting presented to the arbitrators; made and promptly paid in United States dollars free of any deduction or offset; and any costs or fees incident to enforcing the award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement;

(vii)The award shall include interest from the date of any breach or violation of this Agreement, as determined by the arbitral award, and from the date of the award until paid in full, at 6% per annum; and

(viii)Judgment upon the award may be entered in any court having jurisdiction over the person or the assets of the party owing the judgment or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be.

5.10Survival. The covenants and agreements of the parties set forth in Article 2 (Non-Competition and Confidentiality), and Article 5 (Miscellaneous) are of a continuing nature and shall survive the expiration, termination or cancellation of this Agreement, regardless of the reason therefor.

5.11Subrogation. In the event of payment under this Agreement, Employer and Parent shall be subrogated to the extent of such payment to all of the rights of recovery of Employee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable Employer or Parent effectively to bring suit to enforce such rights.

5.12No Duplication of Payments. Employer and Parent shall not be liable under this Agreement to make any payment in connection with any claim made against Employee to the extent Employee has otherwise actually received payment (under any insurance policy, bylaw or otherwise) of the amounts otherwise indemnifiable hereunder.

5.13Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of Employer, Parent, spouses, heirs, and personal and legal representatives. Employer and Parent shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of their business or assets, by written agreement in form and substance satisfactory to Employee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Employer or Parent would be required to perform if no such succession had taken place.

5.14Contribution. If the indemnity contained in this Agreement is unavailable or insufficient to hold Employee harmless in a claim for an indemnifiable event, then separate from and in addition to the indemnity provided elsewhere herein, Parent shall contribute to expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by or on behalf of Employee in connection with such claim in such proportion as appropriately reflects the relative benefits received by, and fault of, Parent and Employer on the one hand and Employee on the other in the acts, transactions or matters to which the claim relates and other equitable considerations.

5.15Parent Guaranty. Parent guarantees the payment and performance of all obligations of Employer under this Agreement and agrees it will pay or perform those obligations if for any reason Employer fails to do so. This guarantee is absolute, continuing, irrevocable and not conditional or contingent. Any notice given hereunder to either Employer or Parent will be deemed to be notice to Parent for purposes of this guaranty.

 

 

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IN WITNESS WHEREOF, Employer and Parent have caused this Agreement to be executed by their officer/general partner thereunto duly authorized, and Employee has signed this Agreement, as of the date first set forth above.

 
CELLSTAR LTD

By:  National Auto Center, Inc.

General Partner

 

By:   /s/ Robert Kaiser 

Robert Kaiser

Chief Executive Officer

CELLSTAR CORPORATION

 

By:   /s/ Robert Kaiser 

Robert Kaiser

Chief Executive Officer

 

 

EMPLOYEE

 

/s/ Michael Farrell

Michael Farrell

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit "A"

Duties and Responsibilities

The duties and responsibilities of the Executive Vice President of Finance and Chief Administrative Officer, as the most senior financial officer of the company and its publicly held parent, include but are not limited to, the following:

	Management of all corporate and subsidiary financial functions as well as financial staff including the Senior Vice President and Chief Financial Officer, Treasury, Risk Management and Accounting staff.

	Development and implementation of the strategies relating to accounting and reporting, capital structure and corporate finance activities.

	Primary oversight and management of relationships with independent auditors, investment banks and commercial banks as well as financial aspects of vendors.

	Primary oversight and participation in external reporting, including SEC reporting and compliance, including but not limited to certification of all SEC and Sarbanes-Oxley documentation as the senior most financial executive of the Parent.

	Primary oversight and development of the capital structure of the company.

	Primary oversight and management of the financial aspects of material contracts.

	Primary oversight and management of the financial aspects of strategic planning.

	Participation in executive committee activities.

	Participation in investor relations and communications with analysts.

	Risk management.

	Development and implementation of federal, state and foreign tax strategies.

	Primary oversight and management of the Information Technology (IT) function and staff, including the Chief Information Officer (CIO).

	Primary oversight and management of the Human Resource function and staff, including but not limited to the senior most Human Resource staff.

	Other duties consistent with the position of Executive Vice President of Finance and Chief Administrative Officer that may be assigned from time to time by the Chief Executive Officer or Board of Directors of the Parent.

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