EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), effective as of the date
(the "Effective Date") which is the Effective Date (as defined in the Plan of
Reorganization of SpectraSite Holdings, Inc. under Chapter 11 of the Bankruptcy
Code, as confirmed by an order entered on January 28, 2003 by the United States
Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division,
as it may be amended from time to time (the "Reorganization Plan")), is entered
into by and among SpectraSite, Inc., a Delaware corporation (the "Company"),
SpectraSite Communications, Inc., a Delaware corporation ("Communications") and
Xxxxxxx X. Xxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company and Communications desire to induce the Executive
to continue in the employ of the Company (including providing services to
Communications) for the period provided in this Agreement, and the Executive is
willing to accept such employment on a full-time basis, all in accordance with
the terms and conditions set forth below;
WHEREAS, the parties hereto desire that this Agreement supersede and
replace any existing employment or similar agreement between or among Executive
and the Company and/or Communications including, but not limited to, the
Employment Agreement between the Executive and the Company, dated as of April
20, 1999 (the "Old Agreement");
NOW, THEREFORE, for and in consideration of the premises hereof and the
mutual covenants contained herein, the parties hereto hereby covenant and agree
as follows:
1. EMPLOYMENT.
(a) The Company hereby agrees to employ the Executive,
and the Executive hereby agrees to accept such employment with the Company,
beginning on the Effective Date and continuing for the period set forth in
Section 2 hereof, all upon the terms and conditions hereinafter set forth.
(b) The Executive affirms and represents that as of the
Effective Date, he is under no obligation to any former employer or other party
which is in any way inconsistent with, or which imposes any restriction upon,
the Executive's acceptance of employment hereunder with the Company, the
employment of the Executive by the Company, or the Executive's undertakings
under this Agreement.
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2. TERM OF EMPLOYMENT.
(a) Unless earlier terminated as provided in this
Agreement, the term of the Executive's employment under this Agreement shall be
for a period beginning on the Effective Date and ending on the third anniversary
of the Effective Date (the "Initial Term").
(b) The term of the Executive's employment under this
Agreement shall be automatically renewed for additional one-year terms (each a
"Renewal Term"), unless earlier terminated as provided in this Agreement, upon
the expiration of the Initial Term or any Renewal Term unless the Company or the
Executive delivers to the other, at least six months prior to the expiration of
the Initial Term or the then current Renewal Term, as the case may be, a written
notice specifying that the term of the Executive's employment will not be
renewed at the end of the Initial Term or such Renewal Term, as the case may be.
The Initial Term together with any Renewal Terms shall hereinafter be referred
to as the "Employment Term."
3. DUTIES. The Executive shall be employed as the President and
Chief Executive Officer of the Company, shall faithfully and competently perform
such duties as inhere in such position and as are specified in the By-laws of
the Company and shall also perform and discharge such other executive employment
duties and responsibilities as the Board of Directors of the Company shall from
time to time determine. The parties acknowledge that the Executive, in the
course of his duties to the Company, shall perform services for and on behalf of
Communications. The Executive shall perform his duties principally at the
offices of the Company in Cary, North Carolina, with such travel to such other
locations from time to time as the Board of Directors of the Company may
reasonably prescribe. Except as may otherwise be approved in advance by the
Board of Directors of the Company, and except during vacation periods and
reasonable periods of absence due to sickness, personal injury or other
disability, the Executive shall devote his full business time throughout the
Employment Term to the services required of him hereunder. The Executive shall
render his business services exclusively to the Company and its subsidiaries
during the Employment Term and shall use his best efforts, judgment and energy
to improve and advance the business and interests of the Company and its
subsidiaries in a manner consistent with the duties of his position. Nothing
contained in this Section 3 shall preclude the Executive from performing
services for charitable or not-for-profit community organizations, provided that
such activities do not interfere with the Executive's performance of his duties
and responsibilities under this Agreement.
4. SALARY; BONUSES; SPECIAL BONUSES.
(a) SALARY. As compensation for the performance by the
Executive of the services to be performed by the Executive hereunder during the
Employment Term, the Company shall pay the Executive a base salary at the annual
rate of Three Hundred Seventy-Five Thousand Dollars ($375,000) (said amount,
together with any increases thereto as may be determined from time to time by
the Board of Directors of the Company in its sole discretion, being hereinafter
referred to as "Salary").
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Any Salary payable hereunder shall be paid in regular intervals in accordance
with the Company's payroll practices from time to time in effect.
(b) BONUS. The Executive shall receive bonus compensation
from the Company in respect of each fiscal year (or portion thereof) occurring
during the Employment Term if the Company attains a percentage of a target for
its earnings before interest, taxes, depreciation and amortization ("EBITDA") in
respect of such fiscal year (the "EBITDA Target"). The EBITDA Target for each
fiscal year and the percentage of such EBITDA Target required to be attained for
the Executive to qualify for a bonus in respect of such fiscal year shall be
established by the Board of Directors of the Company and communicated to the
Executive in writing not later than ninety (90) days after the beginning of such
fiscal year; provided, however, that if the Company attains the EBITDA Target in
respect of any fiscal year occurring during the Employment Term, the Executive
shall receive bonus compensation from the Company in respect of such fiscal year
in an amount not less than the Executive's highest annual rate of Salary at any
time during such fiscal year.
(c) EMERGENCE BONUS. On the Effective Date, the Company
shall pay to the Executive a bonus in the amount required to allow the Executive
to retain $1.45 million after the payment of all income and employment taxes
thereon, and after taking into account the value of any loss by the Executive of
tax deductions on account of the receipt of such bonus. The parties acknowledge
and agree that the Company's payment of such bonus is contingent upon the
Executive demonstrating to the reasonable satisfaction of the Company that
Wachovia Bank has agreed to accept $1.45 million in full satisfaction of its
outstanding loans to the Executive. Immediately following the payment of such
bonus, the Executive shall pay $1.45 million to Wachovia Bank in accordance with
such agreement.
5. OTHER BENEFITS; COMPANY STOCK.
(a) GENERAL. During the Employment Term, the Executive
shall:
(i) be eligible to participate in employee
fringe benefits and pension and/or profit sharing plans that may be
provided by the Company for its senior executive employees in
accordance with the provisions of any such plans, as the same may be in
effect from time to time;
(ii) be eligible to participate in any medical
and health plans or other employee welfare benefit plans that may be
provided by the Company for its senior executive employees in
accordance with the provisions of any such plans, as the same may be in
effect from time to time;
(iii) be entitled to the number of paid vacation
days in each calendar year determined by the Company from time to time
for its senior executive officers, provided that such number of paid
vacation days in each calendar year shall not be less than twenty work
days (four calendar weeks); the
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Executive shall also be entitled to all paid holidays given by the
Company to its senior executive officers;
(iv) receive an option to purchase 763,889 shares
of the Company's common stock consistent with Exhibits B and C to the
Reorganization Plan, to be granted pursuant to an agreement
substantially in the form of the Stock Option Agreement - Form A,
attached as Exhibit A to this Agreement;
(v) be entitled to sick leave, sick pay and
disability benefits in accordance with any Company policy that may be
applicable to senior executive employees from time to time; and
(vi) be entitled to reimbursement for all
reasonable and necessary out-of-pocket business expenses incurred by
the Executive in the performance of his duties hereunder in accordance
with the Company's normal policies from time to time in effect
(including, without limitation, relocation expenses).
6. CONFIDENTIAL INFORMATION. The Executive hereby covenants,
agrees and acknowledges as follows:
(a) The Executive has and will have access to, and will
participate in the development of, or be acquainted with, confidential or
proprietary information and trade secrets related to the business of the Company
and any present or future subsidiaries or "affiliates" (as defined below) of the
Company (collectively with the Company, the "Companies") including but not
limited to (i) customer lists; claims histories, adjustments and settlements and
related records and compilations of information; the identity, lists or
descriptions of any new customers, referral sources or organizations; financial
statements; cost reports or other financial information; contract proposals or
bidding information; business plans; training and operations methods and
manuals; personnel records; software programs; reports and correspondence; and
management systems, policies or procedures, including related forms and manuals;
(ii) information pertaining to future developments such as future marketing or
acquisition plans or ideas, and potential new business locations; (iii)
confidential or non-public information relating to business operations and
strategic plans of third parties with which the Companies have or may be
assessing commercial arrangements, including, without limitation, site build and
deployment plans and schedules, search ring and site locations or potential
locations, actual or projected wireless system subscribers and capital
expenditures and operating cost information ("Third Party Information"); and
(iv) all other tangible and intangible property, which are used in the business
and operations of the Companies but not made public. The information and trade
secrets relating to the business of the Companies described herein above
(including Third Party Information) in this paragraph (a) are hereinafter
referred to collectively as the "Confidential Information," provided that the
term Confidential Information shall not include any information (x) that is or
becomes generally publicly available (other than as a result of violation of
this Agreement by the Executive), (y) that the Executive receives on a
nonconfidential basis from a source (other than the Companies, or their
representatives)
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or, in the case of Third Party Information, from a source (other than the
Companies, the third parties to which such information relates or their
respective representatives) that is not known by him to be bound by an
obligation of secrecy or confidentiality to any of the Companies (or such third
parties, in the case of Third Party Information) or (z) that was in the
possession of the Executive prior to disclosure by the Companies (or such third
parties, in the case of Third Party Information). Except as set forth in Section
10 hereof, for purposes of this Agreement, an "affiliate" of any entity shall
mean any entity controlling, controlled by or under common control with such
first entity.
(b) The Executive shall not disclose, use or make known
for his or another's benefit any Confidential Information or use such
Confidential Information in any way except as is in the best interests of the
Companies in the performance of the Executive's duties under this Agreement. The
Executive may disclose Confidential Information when required by a third party
and applicable law or judicial process, but only after providing immediate
notice to the Company at any third party's request for such information, which
notice shall include the Executive's intent with respect to such request.
(c) The Executive acknowledges and agrees that a remedy
at law for any breach or threatened breach of the provisions of this Section 6
would be inadequate and, therefore, agrees that the Companies shall be entitled
to injunctive relief in addition to any other available rights and remedies in
case of any such breach or threatened breach by the Executive (and the Executive
hereby waives any requirement that any of the Companies provide a bond or other
security in connection with the issuance of any such injunction); provided,
however, that nothing contained herein shall be construed as prohibiting the
Companies from pursuing any other rights and remedies available for any such
breach or threatened breach.
(d) The Executive agrees that upon termination of his
employment with the Company for any reason, the Executive shall forthwith return
to the Company all Confidential Information in whatever form maintained
(including, without limitation, computer discs and other electronic media).
(e) The obligations of the Executive under this Section 6
shall, except as otherwise provided herein, survive the termination of the
Employment Term and the expiration or termination of this Agreement.
(f) Without limiting the generality of Section 9 hereof,
the Executive hereby expressly agrees that the foregoing provisions of this
Section 6 shall be binding upon the Executive's heirs, successors and legal
representatives.
7. TERMINATION.
(a) The Executive's employment hereunder shall be
terminated upon the occurrence of any of the following:
(i) death of the Executive;
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(ii) the Executive's inability to perform his
duties on account of disability or incapacity for a period of one
hundred eighty (180) or more days, whether or not consecutive, within
any period of twelve (12) consecutive months;
(iii) the Company giving written notice, at any
time, to the Executive that the Executive's employment is being
terminated "for cause" (as defined below);
(iv) the Company giving written notice to the
Executive that the Executive's employment is being terminated other
than during the two-year period commencing with a "Change in Control"
(as defined below) and other than pursuant to clause (i), (ii) or (iii)
above;
(v) the Company giving written notice that the
Executive's employment is being terminated during the two-year period
commencing with a Change in Control other than pursuant to clause (i),
(ii) or (iii) above;
(vi) the Executive resigning with "Good Reason"
(as defined below) during the two-year period commencing with a Change
in Control;
(vii) the Executive resigning without Good Reason
during the 30-day period beginning on the first anniversary of a Change
in Control; or
(viii) the Executive resigning for any reason
whatsoever (whether by reason of retirement, resignation or otherwise),
except as set forth in clause (vi) or (vii).
(b) The following actions, failures and events by or
affecting the Executive shall constitute "cause" for termination within the
meaning of clause (iii) above: (i) gross negligence by the Executive in the
performance of, or the willful disregard by the Executive of, his obligations
under this Agreement or otherwise relating to his employment, which gross
negligence or willful disregard continues unremedied for a period of fifteen
(15) days after written notice thereof to the Executive; (ii) acts of dishonesty
by the Executive that are materially detrimental to one or more of the
Companies; (iii) the Executive's material breach of any confidentiality
provision included in any agreement between the Executive and the Company or any
of its subsidiaries; (iv) the Executive being convicted of, or pleading guilty
or no contest to, a felony or other crime having as its predicate element fraud,
dishonesty or misappropriation; or (v) failure by the Executive to obey the
reasonable and lawful orders and policies of the Board of Directors of the
Company that are material to and consistent with the terms of this Agreement,
which failure continues unremedied for a period of fifteen (15) days after
written notice thereof to the Executive (provided that in the case of clauses
(ii) or (iii) above, the Executive shall have received written notice of such
proposed termination
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(which notice shall state the Sections of this Agreement pursuant to which such
termination is being effected and a description of the facts supporting such
termination, and a reasonable opportunity (together with the Executive's
counsel) to discuss the matter with the Board of Directors of the Company,
followed by a notice that the Board of Directors of the Company adheres to its
position). For purposes of this definition, no act or failure to act by the
Executive shall be considered "willful" unless done or omitted to be done by the
Executive in bad faith and without reasonable belief that the Executive's action
or omission was in the best interests of the Company.
(c) "Good Reason" shall mean, on and after a Change in
Control, without the Executive's written consent, the occurrence of any of the
following events:
(i) (A) any change in the duties or
responsibilities (including reporting responsibilities) of the
Executive that is inconsistent in any material and adverse respect with
the Executive's position(s), duties, responsibilities or status with
the Company immediately prior to such Change in Control (including any
material and adverse diminution of such duties or responsibilities);
provided, however, that Good Reason shall not be deemed to occur upon a
change in duties or responsibilities (other than reporting
responsibilities) that is solely and directly a result of the Company
no longer being a publicly traded entity and does not involve any other
event set forth in this paragraph (i) or (B) a material and adverse
change in the Executives' titles or offices with the Company as in
effect immediately prior to such Change in Control;
(ii) a material reduction by the Company in the
Executive's rate of annual base salary or annual target bonus
opportunity (including any material and adverse change in the formula
for such annual bonus target) as in effect immediately prior to such
Change in Control;
(iii) any requirement of the Company that the
Executive be based anywhere more than thirty-five (35) miles from the
office where the Executive is located at the time of such Change in
Control, if such relocation increases the Executive's commute by more
than twenty (20) miles; or
(iv) any failure of the Company to cause any
successor entity to the Company in such Change of Control
unconditionally to assume all of the obligations of the Company under
this Agreement (except to the extent that such obligation would be
assumed by operation of law) prior to the effectiveness of such Change
in Control.
In addition, if (i) the Executive resigns prior to a Change in Control under
circumstances that would have constituted a resignation by the Executive for
Good Reason if such circumstances occurred following a Change in Control; (ii)
such event constituting Good Reason for such resignation was at the request of a
third party who had indicated an intention or taken steps reasonably calculated
to effect a Change in Control or was
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otherwise in anticipation of a Change in Control; and (iii) a Change in Control
involving such third party (or a party competing with such third party to
effectuate a Change in Control) or such anticipated Change in Control does
occur, then the date immediately prior to the date of such termination of
employment shall be treated as a Change in Control and such termination shall be
treated as by the Executive for Good Reason.
(d) Consequences of Termination.
(i) In the event that the Executive resigns
pursuant to clause (vii) of Section 7(a) above or is terminated by the
Company pursuant to clause (iv) of Section 7(a) above or the
Executive's employment terminates pursuant to clause (i) or (ii) of
Section 7(a) above, whether during the Initial Term or during any
Renewal Term, then (i) during the twenty-four (24) month period
beginning on the date of such termination, the Company shall pay to the
Executive, as severance pay or liquidated damages or both, monthly
payments equal to one-twelfth of (x) the rate per annum of his Salary
at the time of such termination plus (y) either (A) if such termination
occurs prior to the payment of the Executive's annual bonus in respect
of the first fiscal year of the Company ending after the Effective
Date, 100% of the Executive's highest annual rate of Salary at any time
during such fiscal year, or (B) if such termination does not occur
prior to such payment, the average annualized bonus the Executive was
paid by the Company for the fiscal years during the term of this
Agreement ending prior to the date of such termination (the amount
described in clause (A) or (B), as applicable, the "Average Bonus"),
provided, however, that no such payments shall be required from and
after the time that the Executive fails to comply with his obligations
under Section 10 below; and (ii) the Company shall continue to provide
the Executive with all benefits provided to Executive immediately prior
to such termination from the date of such termination until the earlier
to occur of (x) the second anniversary of such termination or (y) as to
any particular benefit, the date upon which the Executive becomes
eligible to receive such benefit from another employer; provided,
however, that if the provision of any such benefit by the Company would
contravene any law or the terms of any employee benefit plan of the
Company, or would result in the loss of a tax benefit to which the
Company otherwise would be entitled, the Company shall pay to the
Executive, on an after-tax basis (in respect of any benefit which would
be non-taxable to the Executive if provided directly by the Company),
sufficient cash to allow the Executive to purchase an equivalent
benefit from other than the Company.
(ii) In the event that the Executive resigns
pursuant to clause (vi) of Section 7(a) above or is terminated by the
Company pursuant to clause (v) of Section 7(a) above, whether during
the Initial Term or during any Renewal Term, then (i) during the
thirty-six (36) month period beginning on the date of such termination,
the Company shall pay to the Executive, as severance pay or liquidated
damages or both, monthly payments equal to one-twelfth of (x) the rate
per annum of his Salary at the time of such termination plus (y) the
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Average Bonus; and (ii) the Company shall continue to provide the
Executive with all benefits provided to the Executive immediately prior
to such termination from the date of such termination until the earlier
to occur of (x) the third anniversary of such termination, or (y) as to
any particular benefit, the date upon which the Executive becomes
eligible to receive such benefit from another employer; provided,
however, that if the provision of any such benefit by the Company would
contravene any law or the terms of any employee benefit plan of the
Company, or would result in the loss of a tax benefit to which the
Company otherwise would be entitled, the Company shall pay to the
Executive, on an after-tax basis (in respect of any benefit which would
be non-taxable to the Executive if provided directly by the Company),
sufficient cash to allow the Executive to purchase an equivalent
benefit from other than the Company.
(e) Notwithstanding anything to the contrary expressed or
implied herein, except as required by applicable law and except as set forth in
Section 7(d) above, the Company (and its affiliates) shall not be obligated to
make any payments to the Executive or on his behalf of whatever kind or nature
by reason of the Executive's cessation of employment, other than (i) such
amounts, if any, of his Salary as shall have accrued and remained unpaid as of
the date of said cessation and (ii) such other amounts, if any, which may be
then otherwise payable to the Executive pursuant to the terms of the Company's
benefits plans.
(f) No interest shall accrue on or be paid with respect
to any portion of any payments hereunder.
(g) For purposes of this Agreement, "Change in Control"
means the occurrence of any one of the following events:
(i) any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), other than one or more "Permitted
Holders" (as defined below), is or becomes the beneficial owner (as
defined in Exchange Act Rules 13d-3 and 13d-5, except that for purposes
of this paragraph (i) such person shall be deemed to have beneficial
ownership of all shares that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time, directly or indirectly) of more than 35% of the total voting
power of the Company's "Voting Stock" (as defined below); provided,
however, that there shall not be a "Change in Control" unless the
Permitted Holders beneficially own, directly or indirectly, in the
aggregate, a lesser percentage of the total voting power of the
Company's Voting Stock than such other person, and do not have the
right or ability, by voting power, contract, or otherwise, to elect or
designate for election, a majority of the Board. For purposes of this
paragraph (i), (A) such other person shall be deemed to beneficially
own any Voting Stock of a specified entity held by a parent entity, if
such other person is the beneficial owner, directly or indirectly, of
more than 35% of the voting power of the parent entity's Voting Stock,
and the Permitted Holders beneficially own, directly or indirectly, in
the
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aggregate, a lesser percentage of the total voting power of the parent
entity's Voting Stock than such other person, and do not have the right
or ability, by voting power, contract or otherwise, to elect, or
designate for election, a majority of the parent entity's board of
directors, and (B) the Permitted Holders shall be deemed to
beneficially own any Voting Stock of an entity held by any other parent
entity, so long as the Permitted Holders beneficially own, directly or
indirectly, in the aggregate, a majority of the voting power of the
parent entity's Voting Stock;
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board,
together with any new directors whose election by the Board or whose
nomination for election by the Company's shareholders was approved by a
vote of a majority of the Company's directors then still in office who
were either directors at the beginning of such period or whose election
or nomination for election was previously so approved cease for any
reason to constitute a majority of the Board then in office;
(iii) the merger or consolidation of the Company
with or into another person or the merger of another person with or
into the Company, other than a transaction following which the holders
of securities that represented 100% of the aggregate voting power of
the Voting Stock of the Company immediately prior to such transaction
own, directly or indirectly, at least a majority of the aggregate
voting power of the Voting Stock of the surviving person immediately
after such transaction in substantially the same proportion that such
holders held the aggregate voting power of the Voting Stock of the
Company immediately prior to such transaction; or
(iv) the sale of all or substantially all of the
Company's assets to another person, other than one or more Permitted
Holders or an entity owned by one or more Permitted Holders.
The transactions occurring on or about the Effective Date under the
Reorganization Plan shall not constitute a "Change in Control" for purposes of
this Agreement.
(h) For purposes of this Agreement, "Permitted Holders"
means Apollo Management V L.P., Capital Research and Management Company, Conseco
Capital Management, Fidelity Management & Research Co. and Oaktree Capital
Management LLC and any investment fund or account managed by any of the
foregoing. For purposes of this Agreement, "Voting Stock" of a person means all
classes of capital stock or other interests, including partnership interests, of
such person then outstanding and normally entitled, without regard to the
occurrence of any contingency, to vote in the election of directors, managers,
or trustee thereof.
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8. REDUCTION OF PAYMENTS IN CERTAIN CASES.
(a) For purposes of this Section 8, (i) a "Payment" shall
mean any payment or distribution in the nature of compensation to or for the
benefit of the Executive, whether paid or payable pursuant to this Agreement or
otherwise; (ii) "Agreement Payment" shall mean a Payment paid or payable
pursuant to this Agreement; (iii) "Net After Tax Receipt" shall mean the
"Present Value" (as defined below) of a Payment net all of federal, state and
local taxes imposed on the Executive with respect thereto (including without
limitation under Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code")), determined by applying the highest marginal rates of such taxes
that applied to the Executive's taxable income for the immediately preceding
taxable year, or such other rate(s) as the Executive shall in his sole
discretion certify as likely to apply to the Executive in the relevant tax
year(s); (iv) "Present Value" shall mean such value determined in accordance
with Section 280G(d)(4) of the Code; and (v) "Reduced Amount" shall mean the
smallest aggregate amount of Agreement Payments which (A) is less than the sum
of all Agreement Payments and (B) results in aggregate Net After Tax Receipts
which are equal to or greater than the Net After Tax Receipts which would result
if the aggregate Agreement Payments were any other amount less than the sum of
all Agreement Payments.
(b) Anything in this Agreement to the contrary
notwithstanding, in the event that a nationally recognized certified public
accounting firm designated by the Company (the "Accounting Firm") shall
determine that receipt of all Payments would subject the Executive to tax under
Section 4999 of the Code, it shall determine whether some amount of Agreement
Payments would meet the definition of a "Reduced Amount." If said firm
determines that there is a Reduced Amount, the aggregate Agreement Payments
shall be reduced to such Reduced Amount.
(c) If the Accounting Firm determines that aggregate
Agreement Payments should be reduced to the Reduced Amount, the Company shall
promptly give the Executive notice to that effect and a copy of the detailed
calculation thereof, and the Executive may then elect, in his sole discretion,
which and how much of the Agreement Payments shall be eliminated or reduced (as
long as after such election the Present Value of the aggregate Agreement
Payments equals the Reduced Amount), and shall advise the Company in writing of
his election within ten business days of his receipt of notice. If no such
election is made by the Executive within such ten-day period, the Company may
elect which of such Agreement Payments shall be eliminated or reduced (as long
as after such election the present value of the aggregate Agreement Payments
equals the Reduced Amount) and shall notify the Executive promptly of such
election. All determinations made by the Accounting Firm under this Section 8
shall be binding upon the Company and the Executive. As promptly as practicable
following such determination, the Company shall pay to or distribute for the
benefit of the Executive such Agreement Payments as are then due to the
Executive under this Agreement and shall promptly pay to or distribute for the
benefit of the Executive in the future such Agreement Payments as become due to
the Executive under this Agreement.
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(d) While it is the intention of the Company and the
Executive to reduce the amounts payable or distributable to the Executive
hereunder only if the aggregate Net After Tax Receipts to the Executive would
thereby be increased, as a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that amounts will have been paid or
distributed by the Company to or for the benefit of the Executive pursuant to
this Agreement which should not have been so paid or distributed ("Overpayment")
or that additional amounts which will have not been paid or distributed by the
Company to or for the benefit of the Executive pursuant to this Agreement could
have been so paid or distributed ("Underpayment"), in each case, consistent with
the calculation of the Reduced Amount hereunder. In the event that the
Accounting Firm, based upon the assertion of a deficiency by the Internal
Revenue Service against either the Company or the Executive which the Accounting
Firm believes has a high probability of success determines that an overpayment
has been made, then the Executive shall repay any such Overpayment to the
Company within ten business days of his receipt of notice of such Overpayment.
In the event that the Accounting Firm, based upon controlling precedent or
substantial authority, determines that an Underpayment has occurred, any such
underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
(e) All fees and expenses of the Accounting Firm in
implementing the provisions of this Section 8 shall be borne by the Company.
9. NON-ASSIGNABILITY.
(a) Neither this Agreement nor any right or interest
hereunder shall be assignable by the Executive or his beneficiaries or legal
representatives without the Company's prior written consent; provided, however,
that nothing in this Section 9(a) shall preclude the Executive from designating
a beneficiary to receive any benefit payable hereunder upon his death or
incapacity.
(b) Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to exclusion, attachment, levy or similar process or to assignment by operation
of law, and any attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.
10. RESTRICTIVE COVENANTS.
(a) COMPETITION. During the Employment Term and during
the "Applicable Period" (as defined below), the Executive will not directly or
indirectly (as a director, officer, executive employee, manager, consultant,
independent contractor, advisor or otherwise) engage in competition with, or own
any interest in, perform any services for, participate in or be connected with
any business or organization which engages in competition with any of the
Companies within the meaning of Section 10(d); provided, however, that the
provisions of this Section 10(a) shall not be deemed to prohibit the Executive's
(i) ownership of not more than two percent (2%) of the total
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shares of all classes of stock outstanding of any publicly held company, (ii)
ownership, whether through direct or indirect stock holdings or otherwise, of
one percent (1%) or more of any other business, or (iii) being employed by a
wireless telecommunications services provider (other than an entity or division
of an entity that engages primarily in the business of acquiring or constructing
towers for telecom carriers or operators) during the Applicable Period. For
purposes of this Agreement, the "Applicable Period" shall mean the twenty-four
(24) month period following the termination of the Executive's employment
hereunder for any reason whatsoever.
(b) NON-SOLICITATION. During the Employment Term and
during the Applicable Period, the Executive will not directly or indirectly
induce or attempt to induce any management employee of any of the Companies to
leave the employ of the Companies, or in any way interfere with the relationship
between any of the Companies and any employee thereof.
(c) NON-INTERFERENCE. During the Employment Term and
during the Applicable Period, the Executive will not directly or indirectly
hire, engage, send any work to, place orders with, or in any manner be
associated with any supplier, contractor, subcontractor or other business
relation of any of the Companies if such action would be known by him to have a
material adverse effect on the business, assets or financial condition of any of
the Companies or materially interfere with the relationship between any such
person or entity and any of the Companies.
(d) CERTAIN DEFINITIONS. (i) For purposes of this Section
10, a person or entity (including, without limitation, the Executive) shall be
deemed to be a competitor of one or more of the Companies, or a person or entity
(including, without limitation, the Executive) shall be deemed to be engaging in
competition with one or more of the Companies, if such person or entity either
(x) engages primarily in the business of acquiring or constructing towers for
telecom carriers or operators or (y) engages in any other business engaged in by
the Companies at the time of termination of the Executive's employment with the
Company, in either case in the geographic region encompassing the service areas
in which any of the Companies conduct, or had an established plan to begin
conducting, such businesses at the time of termination of the Executive's
employment with the Company.
(ii) For purposes of this Section 10, no
corporation or entity that may be deemed to be an affiliate of the Company
solely by reason of its controlling, being controlled by, or being under common
control with any Permitted Holder or any of their respective affiliates other
than the Companies will be deemed to be an affiliate of the Company (and
therefore not included in the definition of "Companies").
(e) CERTAIN REPRESENTATIONS OF THE EXECUTIVE. In
connection with the foregoing provisions of this Section 10, the Executive
represents that his experience, capabilities and circumstances are such that
such provisions will not prevent him from earning a livelihood. The Executive
further agrees that the limitations set forth in this Section 10 (including,
without limitation, time and territorial limitations) are
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reasonable and properly required for the adequate protection of the current and
future businesses of the Companies. It is understood and agreed that the
covenants made by the Executive in this Section 10 (and in Section 6 hereof)
shall survive the expiration or termination of this Agreement.
(f) INJUNCTIVE RELIEF. The Executive acknowledges and
agrees that a remedy at law for any breach or threatened breach of the
provisions of Section 10 hereof would be inadequate and, therefore, agrees that
the Company and any of its subsidiaries or affiliates shall be entitled to
injunctive relief in addition to any other available rights and remedies in
cases of any such breach or threatened breach (and the Executive hereby waives
any requirement that any of the Companies provide a bond or other security in
connection with the issuance of any such injunction); provided, however, that
nothing contained herein shall be construed as prohibiting the Company or any of
its subsidiaries from pursuing any other rights and remedies available for any
such breach or threatened breach.
11. JOINT AND SEVERAL OBLIGATIONS. In consideration of the
services to be performed by the Executive for and on behalf of Communications in
the course of his employment with the Company, Communications agrees to be
jointly and severally liable with the Company for all payments and benefits due
to the Executive pursuant to this Agreement, other than in respect of the option
to purchase Company common stock described in Section 5(a)(iv) above.
12. BINDING EFFECT. Without limiting or diminishing the effect of
the provisions affecting assignment of this Agreement, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, successors, legal representatives and permitted assigns.
13. NOTICES. All notices which are required or may be given
pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if given in writing and (i) delivered personally,
(ii) mailed by certified or registered mail, return receipt requested and
postage prepaid, (iii) sent via a nationally recognized overnight courier or
(iv) sent via facsimile confirmed in writing to the recipient, if to the Company
at the Company's principal place of business, and if to the Executive, at his
home address most recently filed with the Company, or to such other address or
addresses as either party shall have designated in writing to the other party
hereto, provided, however, that any notice sent by certified or registered mail
shall be deemed delivered on the date of delivery as evidenced by the return
receipt.
14. LAW GOVERNING. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the principles of conflicts of laws.
15. SEVERABILITY. The Executive agrees that in the event that any
court of competent jurisdiction shall finally hold that any provision of Section
6 or 10 hereof is void or constitutes an unreasonable restriction against the
Executive, the provisions of such Section 6 or 10 shall not be rendered void but
shall apply with respect to such extent
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as such court may judicially determine constitutes a reasonable restriction
under the circumstances. If any part of this Agreement other than Section 6 or
10 is held by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced in whole or in part by reason of any rule of law or
public policy, such part shall be deemed to be severed from the remainder of
this Agreement for the purpose only of the particular legal proceedings in
question and all other covenants and provisions of this Agreement shall in every
other respect continue in full force and effect and no covenant or provision
shall be deemed dependent upon any other covenant or provision.
16. WAIVER. Failure to insist upon strict compliance with any of
the terms, covenants or conditions hereof shall not be deemed a waiver of such
term, covenant or condition, nor shall any waiver or relinquishment of any right
or power hereunder at any one or more times be deemed a waiver or relinquishment
of such right or power at any other time or times.
17. ARBITRATION. With the exception of any dispute regarding the
Executive's compliance with the provisions of Sections 6 and 10 above, any
dispute relating to or arising out of the provisions of this Agreement shall be
decided by arbitration in Cary, North Carolina, in accordance with the Expedited
Arbitration Rules of the American Arbitration Association then obtaining, unless
the parties mutually agree otherwise in a writing signed by both parties. This
undertaking to arbitrate shall be specifically enforceable. The decision
rendered by the arbitrator will be final and judgment may be entered upon it in
accordance with appropriate laws in any court having jurisdiction thereof. Each
of the parties shall pay his or its own legal fees associated with such
arbitration.
18. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes
the entire and final expression of the agreement of the parties with respect to
the subject matter hereof and supersedes all prior agreements, oral and written,
between the parties hereto with respect to the subject matter hereof including,
without limitation, the Old Agreement and any other existing agreement regarding
employment or compensation between or among Executive and the Company and/or
Communications. This Agreement may be modified or amended only by an instrument
in writing signed by both parties hereto.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company and the Executive have duly
executed and delivered this Agreement as of the day and year first above
written.
SPECTRASITE, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Xxxxx X. Xxxxxx
Executive Vice President and Chief
Financial Officer
SPECTRASITE COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Xxxxx X. Xxxxxx
Executive Vice President and Chief
Financial Officer
/s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxx X. Xxxxx
