Operations Management- Puerto Rico] [SunCom Letterhead] September 16, 2007
Exhibit 10.6
[Operations Management- Puerto Rico]
[SunCom Letterhead]
September 16, 2007
[Name]
[Address]
[Address]
[Address]
[Address]
Dear :
As you know, SunCom Wireless Holdings, Inc. (the “Company”) is currently considering strategic
alternatives including sale of the business. If the Company sells the business, you will play a
role which could impact the success of a sale transaction. For this purpose, this letter agreement
(the “Agreement”) sets forth the terms of a sale bonus that the Company will provide to you if you
remain actively employed with the Company or its Affiliates through the consummation of the Sale
Transaction, as follows:
1. Sale Bonus. You will be eligible to receive a sale bonus in connection with a Sale
Transaction (as hereinafter defined) equal to [One Hundred Seven Thousand One Hundred Forty-Three
Dollars ($107,143)] OR [Fifty Three Thousand Five Hundred Seventy-One Dollars ($53,571)] subject to
the conditions set forth in this Agreement (the “Sale Bonus”). You will receive the Sale Bonus if:
(a) the Company executes an agreement to engage in a Sale Transaction by December 31, 2007; (b)
such Sale Transaction has been consummated by December 31, 2008; (c) the Company enters into a Sale
Transaction and the Sale Proceeds allocable to the sale of the PR Business (as defined below)
equals or exceeds Five Hundred and Fifty Million Dollars ($550,000,000); (d) you remain actively
employed (not on a leave of absence, other than an FMLA leave of absence) with the Company or its
Affiliates through the consummation of the Sale Transaction; (e) you are in compliance with this
Agreement and any other agreement between you and the Company; (f) you agree to treat the existence
of the Agreement as well as all of its terms as “Confidential” as defined further in the Agreement;
(g) you comply with and use your best efforts to take such actions as may be necessary to comply
with the terms of any agreements relating to the Sale Transaction as may be communicated to you
from time to time and consistent with the scope of your duties with the Company and (h) you sign a
general release of claims against the Company and its Affiliates, in a form reasonably consistent
with the form attached hereto as Exhibit A.
The determination of the amount of Sale Proceeds allocable to the PR Business shall be made by
the Company’s Board of Directors (the “Board”) in its sole discretion. The Sale Bonus shall be
reduced by applicable federal, state and local tax withholding required by law. If your employment
is terminated by the Company without Cause (as hereinafter defined) prior to the consummation of
the Sale Transaction, you will be paid
the Sale Bonus as provided in the following paragraph. If your employment is terminated by
the Company for Cause prior to the consummation of the Sale Transaction, you will be ineligible to
receive any portion of the Sale Bonus.
The benefit described in this Section 1 shall be payable in a single lump sum as soon
as practicable, but not more than ten (10) business days following the consummation of the Sale
Transaction; provided that any Sale Bonus amount you are entitled to receive pursuant to this
Section 1, shall not be payable to you until such time as SunCom’s stockholders have
received payment with respect to their equity interests pursuant to the terms of the agreement to
engage in the Sale Transaction.. In the event that any portion of the Sale Proceeds is required by
the terms of the Sale Transaction to be placed into escrow, retained or held back by the buyer, or
the payment thereof is otherwise subject to contingencies based upon the occurrence of future
events (“Contingent Sale Proceeds”), the Sale Bonus shall not be paid in accordance with this
Section unless and until the Sale Proceeds which are not Contingent Sale Proceeds allocable to the
sale of the PR Business equal or exceed $550,000,000 (e.g., because sufficient Contingent Sale
Proceeds have been released from escrow, no longer are retained or held back by the buyer, or no
longer are subject to payment contingencies).
2. Definitions.
(A) Cause. For purposes of this Agreement, “Cause” shall mean a termination of
employment on account of inadequate performance, misfeasance, malfeasance, significant violations
of Company policy, criminal conduct, misconduct, dishonesty, mismanagement, incompetence,
deliberate and premeditated acts against the interests of the Company, or destruction of Company
property, as determined by the Company, as applicable, and any other reason determined by the
Company, in good faith, to be unacceptable behavior.
(B) Sale Transaction. For purposes of this Agreement, “Sale Transaction” shall mean a
transaction or series of transactions currently contemplated by the Board of Directors of SunCom
(the “Board”) as of the date of the execution of this Agreement whereby directly or indirectly (I)
an acquisition, merger, consolidation, or other business combination pursuant to which the business
or assets of the Company are, directly or indirectly, combined with a third party not controlled
(by ownership of a majority of the voting securities of such buyer or buyers) by the Company’s
current stockholders; (II) the acquisition, directly or indirectly, by a buyer or buyers (which
term shall include a “group” of persons as defined in Section 13(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)), of equity interests or options, or any combination
thereof constituting a majority of the then outstanding stock of the Company or possessing a
majority of the then outstanding voting power of the Company (except as may occur with current
stockholders or debtholders as a result of a restructuring), other than a buyer or buyers
controlled by the current Company stockholders by ownership of a majority of the voting securities
of such buyer or buyers; (III) any other purchase or acquisition, directly or indirectly, by a
buyer or buyers other than a buyer or buyers controlled by the current Company stockholders by
ownership of a majority of the voting securities of such buyer or buyers; or (IV) the formation of
a joint venture or partnership with the Company or direct investment in the Company for the purpose
of effect a transfer of a significant interest in the Company to a third party.
With respect to the employees performing services primarily in connection with the operation
of the businesses representing the Puerto Rico and U.S. Virgin Islands segment of the Company (the
“PR Business”), the term “Sale Transaction” shall also include (I) an acquisition, merger,
consolidation, or other business combination pursuant to which the business or assets of the PR
Business are, directly or indirectly, combined with a third party not controlled (by ownership of a
majority of the voting securities of such buyer or buyers) by the Company’s current stockholders;
(II) the acquisition, directly or indirectly, by a buyer or buyers (which term shall include a
“group” of persons as defined in Section 13(d) of the Exchange Act), of equity interests or
options, or any combination thereof constituting a majority of the then outstanding equity
interests in the PR Business or possessing a majority of the then outstanding voting power of the
equity interests in the PR Business (except as may occur with current stockholders or debtholders
as a result of a restructuring), other than a buyer or buyers controlled by the current Company
stockholders by ownership of a majority of the voting securities of such buyer or buyers; (III) any
other purchase or acquisition of the PR Business, directly or indirectly, by a buyer or buyers
other than a buyer or buyers controlled by the current Company stockholders by ownership of a
majority of the voting securities of such buyer or buyers; or (IV) the formation of a joint venture
or partnership with the Company or direct investment in the Company for the purpose of effecting a
transfer of a significant interest in the PR Business to a third party.
(C) Sale Proceeds. For purposes of this Agreement, “Sale Proceeds” shall mean: (I)
the total amount of cash and fair market value (on the date of payment) of all property paid or
payable (including amounts paid in escrow) in connection with the Sale Transaction (or any related
transaction), including amounts paid or payable in respect of convertible securities, preferred
equity securities, warrants, stock appreciation rights, options or similar rights, whether or not
vested, plus (II) in the event of a sale of the capital stock of the Company and/or its Affiliates,
the principal amount of all indebtedness for borrowed money or other liabilities of the Company
and/or its Affiliates outstanding as of the closing date of the Sale Transaction, or, in the case
of a sale of assets, all indebtedness for borrowed money or other liabilities assumed by the buyer.
Sale Proceeds shall also include the aggregate amount of all dividends or other distributions
declared by the Company and/or its Affiliates after the date hereof other than normal quarterly
cash dividends, and, in the case of a sale of assets, the net fair market value of any current
assets not sold by the Company and/or its Affiliates, less the book value of the current
liabilities not assumed by the applicable buyer. For purposes of calculating Sale Proceeds, the
value of securities, whether debt or equity, that are freely tradeable in an established public
market will be determined on the basis of the average closing price in such market for the 10
trading days prior to the closing of the Sale Transaction (the “Valuation Date”); and the value of
securities that have no established public market or other property will be the fair market value
of such securities or other property on the Valuation Date. If Sale Proceeds include any
restricted stock (i.e. stock in a public company not freely tradeable), the value of the restricted
stock shall be calculated by the Board in good faith.
(D) The term “Affiliate”, as applied to a specified person, is a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, the person specified.
(E) The term “Confidential” means that you agree to preserve the confidentiality of this
Agreement and all terms included herein. A breach or threatened breach of that obligation shall be
treated as a material breach which shall give rise to the Company’s right to pursue remedies under
this Agreement, including, without limitation, repayment of the Sale Bonus. You agree not to
disclose or discuss, other than with your spouse, legal counsel and financial or tax advisors, or
as otherwise may be required by law, any details of the Agreement, including without limitation,
the amount of the Sale Bonus and related terms. You agree that you will make a good faith effort
to ensure that your spouse, legal counsel and financial or tax advisors will not disclose or
discuss any details of the Agreement with any other person.
3. Business Efforts. The parties acknowledge and agree that the payment of the Sale Bonus
pursuant to Section 1 of this Agreement is intended as compensation for services rendered to the
Company and/or its Affiliates in connection with the consummation of a Sale Transaction. As a
condition to the payment of the Sale Bonus, you shall be required to devote substantially all of
your business efforts, which shall be a minimum of 40 hours per week (and such additional hours as
may be necessary to fulfill your responsibilities) to the management and operations of the Company
and its Affiliates pending the consummation of a Sale Transaction. In performance of your duties,
you will carry out and follow the directions of your supervisor as well as such additional
directions as may be given by the Board (including the Operating Committee of the Board) and in
conformance with all laws and Company rules and policies. You shall perform such duties (i) at the
Company’s offices at 000 Xxxxx Xxxxxx Xxx, Xxxxx 000, Xxx Xxxx, Xxxxxx Xxxx, or (ii) at any other
business location of the Company or any of its Affiliates as necessary to carry out the operations
of the business, or (iii) at any other location as the proper performance of your duties may
require with the direction of the Board or the Operating Committee; provided that the frequency and
duration of any such travel or work at a location other than the Company’s offices in San Xxxx,
Puerto Rico at the direction of the Board or the Operating Committee will be reasonable and take
into consideration your family and other personal obligations.
4. Expenses. From and after the date of execution of any agreement to engage in a Sale
Transaction, the Company shall pay or reimburse you for all reasonable expenses incurred or paid by
you in performance of your duties solely for the Company and its Affiliates that are consistent
with the policies of the Company and the business expense policies of the purchaser under such
agreement (to the extent that such purchaser requests your compliance with such policies and
discloses such policies to you).
5. New Employment/Solicitation. You represent that as of the date of this Agreement, you
have not entered into any agreement (oral or written) to engage in any employment, consulting or
similar agreement or arrangement pursuant to which you will provide services for any remuneration
for any period during which you are employed by the Company or for any period thereafter. You
further represent that you have not solicited any current or former employee of the Company or its
Affiliates for employment or consulting on behalf of any other person or entity (other than the
Company or its Affiliates). In the event that during the term of your employment, you receive any
proposal to provide any person or entity (other than the Company or its Affiliates) employment,
consulting or similar services by you or any other employee of the Company or its Affiliates for
any such period from any third party, you shall not,
without the prior consent of the Board: (i) enter into any such agreement or arrangement; (ii)
otherwise engage in any discussions, negotiations or other communications with such third party or
its representatives; (iii) solicit any current or former employee of the Company or its Affiliates
for employment or consulting on behalf of any person or entity (other than the Company or its
Affiliates); or (iv) induce or attempt to induce, influence or attempt to influence any person
employed by the Company or its Affiliates to terminate his or her employment with such entity
(other than in the normal course of carrying out his duties to the Company); provided that you,
without seeking or obtaining the prior consent of the Board, shall be permitted to respond to
unsolicited proposals for employment or the provision of consulting or similar services by
informing the person(s) making such proposal either (i) that you are not interested in the proposal
or (ii) that you are not permitted to engage in discussions or negotiations with respect to such
proposal until after the consummation of the Sale Transaction.
6. Remedies. In the event you breach any obligations under the terms of this Agreement, in
addition to any other available remedies under any other plan, arrangement or agreement with the
Company or any of its Affiliates, you will be ineligible to receive any portion of the Sale Bonus
as set forth in Section 1 of this Agreement; provided that you shall not be deemed ineligible for
the Sale Bonus based upon any such breach unless the Company and/or the Board has given you written
notice of such breach, granted you a period during which to cure such breach of not less than five
(5) business days, and you have failed to cure such breach during such period.
7. Miscellaneous. This letter sets out the entire agreement between you and the Company
regarding the subject matter of this letter and it supersedes any prior written or oral agreements
pertaining to the subject matter of this letter. If the Company has not executed an agreement to
engage in a Sale Transaction by December 31, 2007 or if the Sale Transaction is not consummated by
December 31, 2008, this Agreement automatically will terminate and you will not be eligible for any
Sale Bonus.
To accept the terms of this letter, please sign in the space indicated at the end of this
letter and return the original copy to the office of Xxxxx Xxxxxx, Senior Vice President of Human
Resources by October 1, 2007. If you have not returned a signed copy of this letter to her by that
date, this offer will be automatically withdrawn and you will not be eligible to earn the Sale
Bonus.
We thank you for your past and continuing contributions to the Company. If you have any
questions about this Agreement, please contact Xxxxx Xxxxxx, Senior Vice President of Human
Resources at (000) 000-0000.
(Signatures Contained on Next Page)
(Signature Page for (Employee’s Name) Letter Agreement- September _, 2007)
Pending execution of this Agreement or in the event you elect not to accept this offer, your
employment shall continue under the same terms that existed prior to extending this offer to you.
| SunCom Wireless Holdings, Inc. | ||||||
| By: | ||||||
| Xxxxxx Xxxxx | ||||||
| Chairman, Compensation Committee of | ||||||
| Board of Directors | ||||||
| SunCom Wireless Management Company, Inc. | ||||||
| By: | ||||||
| Xxxxxxx X. Xxxxxxxx | ||||||
| Chairman and Chief Executive Officer | ||||||
| Employee | ||||||
| (Insert employee name) | ||||||
| (Insert title) | ||||||
EXHIBIT A
Form of Release
RECEIPT AND RELEASE AGREEMENT
I, the undersigned, hereby acknowledge receipt of ___($___), minus applicable
withholding and deductions, as full payment of the Sale Bonus under the terms of the letter
agreement dated September ___, 2007. I acknowledge and agree that in consideration of the Sale
Bonus, I hereby irrevocably and unconditionally release SunCom Wireless Management Company, Inc.
(the “Company”) and its parent companies, subsidiaries and affiliates, together with all of its
and their respective employees, directors, shareholders, officers, members, managers, agents,
representatives, predecessors, successors, assigns, and the like and all persons acting by,
through or in concert with any of them (collectively, the “Releasees”) from any and all charges,
liabilities, damages or causes of action (including attorneys’ fees and costs actually incurred)
whatsoever that in any way relate to or arise out of my employment with the Company.
I represent that in signing this Agreement I do not rely, and have not relied, on any
representation or statement not set forth in this Agreement made by any representatives of the
Releasees with regard to the subject matter, basis or effect of this Agreement or otherwise. This
Agreement sets forth the entire agreement between the parties, and fully supersedes any and all
prior agreements or understandings between the parties pertaining to the subject matter hereof.
This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth
of Puerto Rico, without regard to the choice of law rules thereof.
IN WITNESS
WHEREOF, the undersigned has executed this Agreement this
___ day of , 200_.
Signature:
Name (print):
Name (print):
