EXHIBIT 10.1.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated effective June 9,
2000, by and between TRITEL, INC., a Delaware corporation (the "Company"), and
XXXXXXX X. XXXXXXX, XX ("Executive"). Capitalized terms used herein but not
otherwise defined herein shall have the meanings given to such terms in the
Stockholders Agreement of the Company, dated January 7, 1999, as amended,
modified or supplemented in accordance with the terms thereof (the
"Stockholders Agreement").
W I T N E S S E T H:
WHEREAS, the Company employed Executive pursuant to an Employment
Agreement executed by the Company and Executive embodying the terms of such
employment dated January 7, 1999 (the "Original Agreement");
WHEREAS, the Company and Executive desire to continue such employment
pursuant to terms and conditions varying from those set forth in the Original
Agreement;
WHEREAS, X. X. Xxxxxx, Xx. and Executive (collectively, the "Senior
Executives") own all of the ownership interests in Tritel Management, LLC, a
Mississippi limited liability company ("Manager");
WHEREAS, the Senior Executives have caused the Manager to enter into
a Management Agreement with the Company, dated January 7, 1999 (the
"Management Agreement"), pursuant to which the Manager has agreed, among other
things, to manage the business of the Company;
WHEREAS, pursuant to Section 3.2(e) of the Securities Purchase
Agreement, dated as of May 20, 1998 (the "Securities Purchase Agreement"),
Executive has become the record and beneficial owner of 5,961.36 shares
(pre-split) of the Company's Class A Voting Common Stock, par value $.01 per
share ("Class A Common Stock") and 1,725.56 shares (pre-split) of the
Company's Class C Common Stock, par value $.01 per share (the "Class C Common
Stock"; collectively, the "Restricted Shares");
WHEREAS, in order to induce the Purchasers referred to in the
Securities Purchase Agreement to purchase the securities issued by the Company
thereunder, Executive desires to grant to the Company the repurchase rights
with respect to the Restricted Shares as referred to in Section 7; and
WHEREAS, the Company desires to accept the grant of such repurchase
rights.
WHEREAS, on or about December 13, 1999, the Company effected a 400 to
1 stock split (the "Stock Split") of its Class A Voting Common Stock and Class
C Common Stock so that the number of Restricted Shares subject to the Original
Agreement was increased to 2,384,544 Class A Common Stock shares and 690,224
Class C Common Stock shares; and
WHEREAS, the Company and Executive desire to amend and restate the
Original Agreement to modify the Company's repurchase rights relating to the
Restricted Shares, to provide for acceleration of vesting upon certain events
and certain other matters, all in accordance with the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and Executive, intending to be legally bound, hereby
amend and restate the Original Agreement in its entirety and agree as follows:
1. Employment.
a. Agreement to Employ. Upon the terms and subject to the
conditions of this Agreement, the Company hereby employs Executive, and
Executive hereby accepts employment by the Company.
b. Employment Period. The term of Executive's employment shall
be for a period of five (5) years commencing on January 7, 1999 (the
"Commencement Date") and continuing until January 1, 2004 (the "Expiration
Date") unless this Agreement shall have been earlier terminated in accordance
with Section 5 (the "Employment Period").
2. Position and Duties.
During the Employment Period, Executive shall serve as Chairman
of the Board and Chief Executive Officer of the Company and be responsible for
the duties set forth on Schedule I, reporting directly to the Company's
President. During the Employment Period, except as set forth herein, Executive
shall devote his entire business time to the services required of him
hereunder, except for vacation time, personal time and reasonable periods of
absence due to sickness, personal injury or other disability. Nothing
contained herein shall preclude Executive from devoting reasonable periods of
time to (i) the activities described on Schedule II; (ii) serving on a board
of directors of a charitable, trade or other similar organization; or (iii)
serving on other boards of directors with the consent of the Board of
Directors (excluding the Senior Executives who are members of the Company's
Board of Directors), in each such case, so long as such activities do not
interfere with the performance of Executive's duties hereunder.
3. Compensation.
a. Base Salary. The Company shall pay Executive an annual salary
of $225,000. Upon the first anniversary of the Commencement Date, and annually
thereafter, the Compensation Committee of the Board of Directors shall review
Executive's base salary in light of the performance of Executive and the
Company, and may, in its discretion, increase (but not decrease) such base
salary by an amount it determines to be appropriate. Executive's annual base
salary payable hereunder, as it may be increased from time to time, is
referred to herein as "Base Salary". The Company shall pay Executive his Base
Salary in equal monthly installments, or in such other installments as the
parties may mutually agree.
b. Annual Bonus. For each calendar year or part thereof during
the Employment Period, Executive shall be eligible to receive an annual bonus
(an "Annual Bonus") equal to up to 50% of his Base Salary based upon the
achievement of certain objectives determined by the Compensation Committee of
the Board of Directors for such calendar year, payable within thirty (30) days
after certification of the Company's financial statements for such year.
4. Benefits, Perquisites and Expenses.
a. Benefit Plans. During the Employment Period, Executive
shall be eligible to participate in any welfare benefit plan sponsored or
maintained by the Company, including, without limitation, any group life,
hospitalization, medical, dental, health, accident or disability insurance or
similar plan or program of the Company, in each case, whether now existing or
established hereafter, to the extent that Executive is eligible to participate
in any such plan under the generally applicable provisions thereof.
b. Perquisites. Executive shall be entitled to up to four weeks
paid vacation annually in accordance with the Company's policies and
practices. Executive shall also be entitled to receive such perquisites as are
generally provided to other senior officers of the Company in accordance with
the policies and practices of the Company.
c. Business Expenses. The Company shall pay or reimburse
Executive for all reasonable expenses incurred or paid by Executive in
performance of Executive's duties hereunder, upon presentation of expense
statements or vouchers and such other information as the Company may
reasonably require.
d. Indemnification. The Company shall, to the maximum extent
permitted by applicable law, the Company's certificate of incorporation or its
bylaws, indemnify Executive and hold Executive harmless from and against any
claim, loss or cause of action arising from or out of Executive's performance
as an officer, director or employee of the Company or any of its subsidiaries
or in any other capacity, including serving as a fiduciary, in which Executive
serves at the request of the Company. If any claim is asserted hereunder for
which Executive reasonably believes in good faith he is entitled to be
indemnified, the Company shall pay Executive's reasonable legal expenses (or
cause such expenses to be paid), as may be reasonably required but no less
frequently than on a quarterly basis, provided that Executive shall reimburse
the Company for such amounts, plus simple interest thereon at the 90-day
United States Treasury Xxxx rate as in effect from time to time, compounded
annually, if Executive shall be found by a final, non-appealable order of a
court of competent jurisdiction not to be entitled to indemnification. The
indemnification obligations of the Company in this paragraph shall survive any
termination of this Agreement.
e. Directors and Officers Liability Insurance. The Company has
obtained, and shall use all commercially reasonable efforts to maintain,
directors and officers liability insurance coverage covering Executive in
amounts customary for similarly situated companies in the telecommunications
industry.
5. Termination of Employment.
a. Early Termination of the Employment Period. This Agreement
may be terminated in any of the following manners:
i. Executive may, upon 30 days' prior written notice to the
Company, voluntarily terminate employment with the Company at any time at the
sole discretion of Executive (a "Voluntary Termination");
ii. Executive may, upon written notice to the Company,
terminate employment with the Company at any time for "Good Reason" (as
defined in Section 5(g)) it being agreed that any such termination, although
effected by Executive shall not constitute a Voluntary Termination;
iii. Executive's employment may, upon written notice to
Executive, be terminated by the Company at any time for Cause (as defined in
Section 5(f));
iv. This Agreement shall terminate automatically upon
Executive's death;
v. The Company may, upon written notice to Executive,
terminate this Agreement upon Executive's Disability. As used herein, the term
"Disability" shall mean a determination that Executive suffers from illness or
other physical or mental impairment that prevents Executive from substantially
performing his duties for a period of 90 days during any six-month period
during the Employment Period or for 180 days during any 12-month period during
the Employment Period. The determination of whether (and, if appropriate,
when) a Disability has occurred shall be made by a majority of the Board of
Directors of the Company (excluding the Senior Executives that are directors
of the Company);
vi. The Company may terminate this Agreement immediately in
the event of a material breach of the Management Agreement by Manager (as
determined by a majority vote of the Board of Directors (excluding the Senior
Executives that are directors of the Company)), which has not been cured
within thirty (30) days following notice thereof from the Company, or the
failure of the Company to meet any of the objectives set forth on Schedule
III-A to this Agreement; or
vii. The Company may terminate this Agreement immediately in
the event of the failure of the Company to meet any of the objectives set
forth in Schedule III-B to this Agreement.
b. Benefits Payable Upon Termination.
i. Following the end of the Employment Period pursuant to any
manner described in Section 5(a) or for any other reason, the Company shall
pay to Executive (or, in the event of his death, his surviving spouse, if any,
or his estate): (A) any Base Salary earned, but unpaid, for services rendered
to the Company on or prior to the date on which the Employment Period ended,
and (B) amounts which are vested or which Executive is otherwise entitled to
receive under the terms of or in accordance with any plan, policy, practice or
program of, or any contract or agreement with, the Company at or subsequent to
the date the Employment Period ends without regard to the performance by
Executive of further services or the resolution of a contingency.
ii. Following the end of the Employment Period other than
pursuant to a termination described in Sections 5(a)(i), (iii) or (vii) (in
respect of which Executive shall not be entitled to any payments under this
Section 5(b)(ii)), Executive shall be entitled to receive the lesser of (x)
his Base Salary, and (y) the balance of his Base Salary through the Expiration
Date. In the event that the Employment Period shall end pursuant to a
termination by Executive pursuant to Section 5(a)(ii) or a termination by the
Company pursuant to Section 5(a)(vi), the Executive shall also be entitled to
receive the Annual Bonus (if earned in accordance with Section 3(b) of this
Agreement). The amount of the Annual Bonus shall be determined as follows: (I)
In the event that the date of termination is on or prior to June 30 of any
applicable calendar year, the amount of the Annual Bonus shall be equal to a
pro rata portion (based upon the actual number of days during such calendar
year that this Agreement shall have been in effect) of the Annual Bonus
payable in respect of such year (determined based upon the achievement by the
Company of the objectives for all of such calendar year). (II) In the event
that the date of termination is after June 30 of any applicable calendar year,
the amount of the Annual Bonus shall be equal to the Annual Bonus payable in
respect of such year (determined based upon the achievement by the Company of
the objectives for all of such calendar year).
c. Timing of Payments.
i. Amounts payable pursuant to Section 5(b)(i)(A) and, except
as provided below upon termination of the Management Agreement, payments of
Base Salary pursuant to Section 5(b)(ii) shall be payable monthly in monthly
installments in arrears commencing on the last day of the month following the
end of the Employment Period. In the event that Executive's employment shall
be terminated pursuant to Section 5(a)(ii) or (vi), the Annual Bonus payable
pursuant to Section 5(b)(ii) shall, except as provided below upon termination
of the Management Agreement, be paid 30 days after the certification of the
Company's financial statements for such year. In the event that the Management
Agreement is terminated concurrently with the termination of this Agreement
(A) the Annual Bonus (if earned in accordance with Section 3(b) of this
Agreement) shall be payable on the later to occur of (x) 30 days after the
certification of the Company's financial statements for such year, and (y) the
last day of the month after which (a) a New Provider (as defined in the
Management Agreement) shall be retained by the Company in accordance with
Section 5(e)(i)of the Management Agreement, and (b) the Senior Executives
shall have nominated a Successor Control Group (as defined in the Management
Agreement) acceptable to the Board of Directors in its sole discretion
(excluding the Senior Executives that are directors of the Company) in
accordance with Section 5(e)(ii) of the Management Agreement, and (B) the Base
Salary payable pursuant to Section 5(b)(ii) shall be payable monthly in
monthly installments on the last day of the month after which (I) a New
Provider shall be retained by the Company in accordance with Section 5(e)(i)
of the Management Agreement and (II) the Senior Executives shall have
nominated a Successor Control Group reasonably acceptable to the Board of
Directors in its sole discretion (excluding the Senior Executives that are
directors of the Company) in accordance with Section 5(e)(ii) of the
Management Agreement.
ii. Vested benefits referred to in clause (B) of Section
5(b)(i) shall be payable in accordance with the terms of the plan, policy,
practice, program, contract or agreement under which such benefits have
accrued.
d. The Company shall be entitled to set off against the
amounts payable to the Executive following the termination of this Agreement
pursuant to Section 5(b)(ii), any amounts earned by either Executive in other
employment after the termination of this Agreement; provided, however, that
Executive shall not be required, as a condition to the receipt of such payment
pursuant to Section 5(b)(ii), to seek such other employment.
e. Continuing Obligations. After receipt of written notice of
termination, but prior to the effective date of such termination, Executive
shall continue to perform his duties under this Agreement unless specifically
instructed to discontinue such performance. In the event of termination,
Executive and the Company shall remain liable for their respective obligations
accrued under this Agreement prior to the effective date of termination.
f. Definition of Cause. For purposes of this Agreement, "Cause"
means only:
i. Executive's indictment or conviction of a felony;
ii. Fraud, misappropriation or embezzlement by Executive
against the Company or any subsidiary or affiliate of the Company; or
iii. Executive's willful misconduct or gross negligence in
connection with his employment hereunder which has materially adversely
affected the Company, monetarily or otherwise, as determined by a majority
vote of the Board of Directors of the Company (excluding Executive and other
Company executives that are directors of the Company).
g. Definition of Good Reason. For purposes of this Agreement
"Good Reason" means any of the following:
i. The Company fails to make any payment when due pursuant to
Section 3 within thirty (30) days following Executive's written notice to the
Company of such failure;
ii. A material breach of this Agreement by the Company (other
than a payment default) which has not been cured within thirty (30) days
following notice thereof from the Company;
iii. Executive is demoted or removed from his/her respective
offices or there is a material diminishment of Executive's responsibilities,
duties or status which diminishment is not rescinded within 30 days after the
date of receipt by the Board of Directors of the Company of Executive's
written notice referring to this provision and describing such diminishment;
or
iv. The Company relocates its principal offices without
Executive's consent to a location more than 50 miles from the principal
offices of the Company in Jackson, Mississippi.
6. Noncompetition and Confidentiality
a. Noncompetition. During the Employment Period and for one year
thereafter, Executive shall not, without the consent of the Company, assist or
become associated with any person or entity, whether as a principal, partner,
employee, consultant or shareholder (other than as a holder of not in excess
of 5% of the outstanding voting shares of any publicly traded company) that is
actively engaged in the business of providing mobile wireless
telecommunications services in the Territory (as defined in the Company's
Stockholders' Agreement); provided, however, that in the event the Employment
Period is terminated (x) by Executive pursuant to Section 5(a)(ii) or by the
Company pursuant to Section 5(a)(vi) Executive shall have no obligations
pursuant to this Section 6(a), and (y) by the Company pursuant to Section
5(a)(vii) such one-year period shall be three (3) months, subject to the right
of the Company, upon written notice given to Executive, to extend such three
(3) month period on a month-to-month basis for up to an additional nine (9)
month period on the condition that the Company pays to Executive his Base
Salary during such three (3) month period and for any such additional period
that the Company elects to extend Executive's obligations pursuant to this
Section 6(a).
b. Confidentiality. Without the prior written consent of the
Company, except to the extent required by an order of a court having competent
jurisdiction or under subpoena from a governmental body or agency, Executive
shall not disclose any trade secrets, customer lists, drawings, designs,
information regarding product development, marketing plans, sales plans,
manufacturing plans, management organization (including data and other
information relating to members of the Board of Directors and management),
operating policies and manuals, business plans, financial records, packaging
design or other financial, commercial, business or technical information
relating to the Company or any of its subsidiaries or affiliates
(collectively, "Confidential Information"), to any third person, unless such
Confidential Information has been previously disclosed to the public by the
Company or is in the public domain (other than by reason of Executive's breach
of this Paragraph 6(b)), except that Executive may disclose Confidential
Information to the extent advisable in his sole discretion in connection with
(i) the performance of Executive's duties hereunder, or (ii) the issuance of
Company securities, or (iii) obtaining financing for the Company, or (iv) the
enforcement of Executive's rights under this Agreement, or (v) any disclosures
that may be required by law, including securities laws.
c. Inventions. Executive hereby sells, transfers and assigns to
the Company all of the right, title and interest of Executive in and to all
inventions, ideas, disclosures and improvements, whether patented or
unpatented, and copyrightable material, made or conceived by Executive, solely
or jointly, or in whole or in part, during the Employment Term which (i)
relate to methods, apparatus, designs, products, processes or devices sold,
leased, used or under construction or development by the Company or any
subsidiary or affiliate or (ii) otherwise relate to or pertain to the
business, functions or operations of the Company or any subsidiary or
affiliate, or (iii) arise (wholly or partly) from the efforts of Executive
during the Employment Period. Executive shall communicate promptly and
disclose to the Company, in such form as the Company reasonably requests, all
information, details and data pertaining to the aforementioned inventions,
ideas, disclosures and improvements; and, whether during the Employment Period
or thereafter, Executive shall execute and deliver to the Company (at the
Company's sole cost and expense) such formal transfers and assignments and
such other papers and documents as may be required of Executive to permit the
Company to file and prosecute the patent applications and, as to copyrightable
material, to obtain copyright thereon.
d. Company Property. Promptly following Executive's termination
of employment, Executive shall return to the Company all property of the
Company, and all copies thereof in Executive's possession or under his
control, and all tangible embodiments of Confidential Information in
Executive's possession in whatever media such Confidential Information is
maintained.
e. Non-Solicitation of Employees. During the Employment Period
and for one year thereafter, Executive will not directly or indirectly induce
any employee of the Company or any of its subsidiaries or affiliates to
terminate employment with such entity, and will not directly or indirectly,
either individually or as owner, agent, employee, consultant or otherwise,
employ or offer employment to any person who is or was employed by the Company
or a subsidiary thereof, unless such person shall have ceased to be employed
by such entity for a period of at least six months; provided, however, that
nothing contained in this Agreement shall prevent Executive from engaging in a
general solicitation for employment that is not directed at employees of the
Company or any of its subsidiaries or affiliates.
f. Injunctive Relief with Respect to Covenants. Executive
acknowledges and agrees that the covenants and obligations of Executive with
respect to noncompetition, inventions, confidentiality and Company property
contained in this Section 6 relate to special, unique and extraordinary
matters and that a violation of any of the terms of such covenants and
obligations will cause the Company irreparable injury for which adequate
remedies are not available at law. Therefore, Executive agrees that the
Company shall be entitled to an injunction, restraining order, or such other
equitable relief as a court of competent jurisdiction may deem necessary or
appropriate to restrain Executive from committing any violation of the
covenants and obligations contained in this Paragraph 6. These injunctive
remedies are cumulative and are in addition to any other rights and remedies
the Company may have at law or in equity.
7. Vesting and Repurchase of Unvested Shares, Etc.
a. General. Executive by his acceptance of the Restricted Share
certificates bearing the legend set forth in paragraph (e) below, agrees that
the Restricted Shares shall be subject to repurchase by the Company at the
Repurchase Price in accordance with the terms of this Section 7. As used in
this Section 7, the following terms have the following meanings:
i. "Automatic Repurchase Event" means (x) the termination of
Executive's employment pursuant to this Agreement or any agreement
supplementing, amending or extending this Agreement, (y) the seventh (7th)
anniversary of the Commencement Date.
ii. "Base Shares" means 2,384,544 shares of Class A Common
Stock and 690,224 shares of Class C Common Stock.
iii. "Change in Control" means a change in control of the
Company, which will be deemed to have occurred if:
(I) any "person" as such term is used in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof except that such term shall not include (A)
the Company or any of its subsidiaries, (B) any trustee or
other fiduciary holding securities under an employee benefit
plan of the Company or any of its affiliates, (C) an
underwriter temporarily holding securities pursuant to an
offering of such securities, (D) any corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
Common Shares, or (E) any person or group as used in Rule
13d-1(b) under the Exchange Act, is or becomes the Beneficial
Owner, as such term is defined in Rule 13d-3 under the
Exchange Act, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned
by such person any securities acquired directly from the
Company or its affiliates other than in connection with the
acquisition by the Company or its affiliates of a business)
representing 50% or more of the combined voting power of the
Company's then outstanding securities;
(II) during any period of two consecutive years,
individuals who at the beginning of such period constitute
the Board, and any new director (other than (A) a director
designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (I),
(III), or (IV) of this Section 7(a)(iii) or (B) a director
whose initial assumption of office is in connection with an
actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election
of directors of the Company) whose election by the Board or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason
to constitute at least a majority thereof;
(III) there is consummated a merger or consolidation of
the Company or any direct or indirect subsidiary of the
Company with any other corporation, other than (A) a merger
or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving
entity or any parent thereof) in combination with the
ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or
any subsidiary of the Company, at least 75% of the combined
voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (B) a
merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in
which no person (as defined above) is or becomes the
beneficial owner, directly or indirectly, of securities of
the Company (not including in the securities beneficially
owned by such person any securities acquired directly from
the Company or its affiliates other than in connection with
the acquisition by the Company or its affiliates of a
business) representing 25% or more of the combined voting
power of the Company's then outstanding securities; or
(IV) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there
is consummated an agreement for the sale or disposition by
the Company of all or substantially all of the Company's
assets (or any transaction having a similar effect) other
than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at
least 75% of the combined voting power of the voting
securities of which are owned by stockholders of the Company
in substantially the same proportions as their ownership of
the Company immediately prior to such sale.
Notwithstanding the foregoing, no change in voting power triggered solely by
the holders of shares of Voting Preference Stock of the Company beginning to
vote as a class with holders of Class A Voting Common Stock of the Company
shall be deemed a Change in Control under this Agreement.
ii. "Equity Kicker Shares" means a number of Restricted
Shares equal to 819,940 shares of Class A Common Stock.
iii. "Fully Diluted Basis" means, with respect to the shares
of Common Stock outstanding, all of the shares of Common Stock then
outstanding (regardless of whether subject to repurchase), plus (without
duplication) all the shares of Common Stock issuable upon the exercise of
outstanding options or convertible securities (excluding the Company's Series
A Preferred Stock, $.01 par value); provided, that for the purpose of
calculating the number of shares of Common Stock outstanding on a Fully
Diluted Basis in order to determine whether the Internal Rate of Return
pursuant to Section 7(b)(ii) equals (A) more than 25% but less than 35%, none
of the Equity Kicker Shares shall be deemed to be outstanding, and (B) more
than 35%, one-half of the Equity Kicker Shares shall be deemed to be
outstanding.
iv. "Market Price" means in the case of an Automatic
Repurchase Event (A) specified in clause (x) of the definition thereof the
average closing price of the Class A Common Stock during the ten (10) trading
days prior to such date of termination, or (B) specified in clause (y) of the
definition thereof, the average closing price of the Class A Common Stock
during the ten (10) trading days prior to such seventh (7th) anniversary of
the Commencement Date. In the case of a Trigger Notice, "Market Price" means
the average closing price of the Class A Common Stock during the ten (10)
trading days prior to such Trigger Date.
vii. "Precipitating Event" means (i) a diminution in the
Executive's position, duties, authority, title or responsibilities with
respect to his or her employment by the Company or (ii) the relocation of the
Executive's principal place of performance more than fifty (50) miles from his
or her principal place of performance on the Commencement Date.
vii. "Repurchase Price" means $.000025 per share.
ix. "Trigger Date" means the date of delivery to the Company
by Executive of a Trigger Notice that refers to Equity Kicker Shares.
x. "Trigger Notice" means a notice given by Executive with
respect to a specified number of Equity Kicker Shares to determine the number
of Triggered Shares.
b. Repurchase of Base Shares and Equity Kicker Shares.
i. Repurchase of Base Shares upon Automatic Repurchase Event.
Upon an Automatic Repurchase Event, Executive shall sell to the Company, and
the Company shall purchase from Executive, the aggregate of (I) all Base
Shares that shall not have vested in accordance with Schedule IV, plus (II)
the number of Restricted Shares subject to repurchase pursuant to Section
7(b)(v). Notwithstanding the provisions of Schedule IV or any other provision
of this Agreement, all Base Shares shall fully vest and shall not be subject
to repurchase upon the occurrence of any of the following: (x) a Change in
Control, provided that Executive remains in continuous service with the
Company or any Subsidiary until the effective date of such Change in Control;
(y) if Executive's employment with the Company and all Subsidiaries is
terminated (a) by reason of his or her death or Disability or (b) by the
Company and all Subsidiaries for any reason other than (A) Cause (whether in
connection with the TeleCorp Merger or otherwise), or (B) pursuant to Section
5(a)(vii); or (z) a Precipitating Event. Executive's employment with the
Company (or a Subsidiary of the Company) shall not be required to terminate as
a condition to such acceleration of vesting upon a Precipitating Event.
ii. Repurchase of Equity Kicker Shares upon Automatic
Repurchase Event. Upon any Automatic Repurchase Event, Executive shall sell to
the Company, and the Company shall purchase from Executive, the aggregate of
(I) the percentage of Executive's Equity Kicker Shares set forth opposite the
Internal Rate of Return realized by the Cash Equity Investors as set forth on
the chart below as of the date of the Automatic Repurchase Event:
Internal Rate of Return Percentage of
Realized by Cash Equity Equity Kicker Shares to be
Investors Repurchased
------------------------------------ ---------------------------
Less than 25% 100%
25% or more but less than 35% 50%
35% or more 0%
, plus (II) the number of Restricted Shares subject to
repurchase pursuant to Section 7(b)(v) that are not repurchased pursuant to
clause (i) above. Notwithstanding the above or any other provision of this
Agreement, all Equity Kicker Shares that have not yet vested shall fully vest
and shall not be subject to repurchase upon the occurrence of any of the
following: (x) a Change in Control, provided that Executive remains in
continuous service with the Company or any Subsidiary until the effective date
of such Change in Control; (y) if the Executive's employment with the Company
and all Subsidiaries is terminated (a) by reason of his or her death or
Disability or (b) by the Company and all Subsidiaries for any reason other
than (A) Cause (whether in connection with the TeleCorp Merger or otherwise)
or (B) pursuant to Section 5(a)(vii); or (z) a Precipitating Event.
Executive's employment with the Company (or a Subsidiary of the Company) shall
not be required to terminate as a condition to such acceleration of vesting
upon a Precipitating Event.
iii. Internal Rate of Return Determination. For the purpose
of this Section 7, the Cash Equity Investors will be deemed to have "realized
an Internal Rate of Return" of any percentage specified, as of any date, when
(i) the aggregate amount of all distributions (but not including proceeds from
sales of Common Stock) actually made in respect of the Cash Equity Investors'
Common Stock, plus an amount equal to interest thereon at the rate of 10% per
annum, compounded annually, from the date each such distribution is made to
and including the date of the calculation, plus the product of the Market
Price multiplied by the number of shares of Common Stock beneficially owned by
the Cash Equity Investors on the date hereof (as adjusted for stock splits,
stock dividends and similar changes in capitalization), is equal to (ii) the
aggregate amount of all capital contributions made by the Cash Equity
Investors, plus an amount equal to interest thereon at such percentage per
annum, compounded annually, from the date each such capital contribution is
made to and including such date of calculation.
iv. Vesting on Trigger Notice. Executive may elect, by
delivery of a Trigger Notice with respect to a number of Equity Kicker Shares
specified in such Trigger Notice, to determine the number of Equity Kicker
Shares that are vested and not subject to repurchase under Section 7(b)(ii).
The Internal Rate of Return (determined as specified in Section 7(b)(iii))
shall be determined as of the Trigger Date and those Equity Kicker Shares that
would not be subject to repurchase under the chart set forth in Section
7(b)(ii) above shall be deemed vested and not subject to repurchase from and
after the Trigger Date.
v. Additional Repurchase Rights of the Company.
(1) Anything to the contrary contained herein
notwithstanding, in the event this Agreement is terminated by the Company
pursuant to Section 5(a)(iii), Executive shall sell to the Company, and the
Company shall repurchase from Executive, all of the Restricted Shares (whether
or not vested) provided, however, this Section 7(b)(v)(1) shall cease to be
effective upon a Change in Control.
(2) In the event that the Management Agreement is
terminated and the Manager does not approve a "New Provider" (as such term is
defined in the Management Agreement) within five (5) business days of notice
of such New Provider's nomination by the Board of Directors, in accordance
with Section 5(e)(i) of the Management Agreement, then for each successive
thirty (30) day period or portion thereof following such five (5) business day
period that a New Provider shall not have been approved by the Manager,
Executive shall sell to the Company 50% of the Restricted Shares then owned by
Executive (after giving effect to all other repurchases pursuant to this
Section 7).
(3) In the event that Executive and the other Senior
Executives do not nominate a Successor Control Group reasonably acceptable to
the Board of Directors of the Company in its sole discretion (excluding the
Senior Executives that are directors of the Company) in accordance with such
Section 5(e)(ii) of the Management Agreement within the five (5) business day
period set forth in the first sentence of Section 5(e)(ii) of the Management
Agreement, then for each successive 30 day period or portion thereof that
Executive and the other Senior Executives shall not have nominated a Successor
Control Group reasonably acceptable to the Board of Directors of the Company
in its sole discretion (excluding the Senior Executives that are directors of
the Company), the Executive shall sell to the Company after the expiration of
each 30 day period, in addition to and after giving effect to all other
repurchases by the Company of Restricted Shares pursuant to this Section 7
(including Section 7(b)(v)(2)), an additional 50% of the Restricted Shares
then owned by Executive.
c. Purchase Price; Closing of Repurchase; Assignment of
Repurchase Right. Any repurchase pursuant to this Section 7 shall be for the
Repurchase Price. The closing of a purchase and sale of Repurchased Shares
shall take place on a date mutually agreed by Executive and the Company, but
in no event later than 20 days after (i) the date that employment of Executive
shall have terminated or, in the case of a repurchase pursuant to Sections
7(b)(v), the end of any 30-day period referred to in Section 7(b)(v), or (ii)
in the case of Automatic Repurchase Event other than termination of employment
of Executive, the occurrence of the applicable event. At such closing, the
Company shall deliver to the Executive a check in the amount of the aggregate
Repurchase Price and, upon delivery thereof, the Company shall become the
legal and beneficial owner of the Restricted Shares and all rights and
interests therein or relating thereto, and the Company shall have the right to
retain and transfer to its own name such shares being repurchased by the
Company. Whenever the Company shall have the right to repurchase Restricted
Shares hereunder, the Company may designate and assign one or more employees,
officers, directors or shareholders of the Company or other persons or
organizations to exercise all or a party of the Company's repurchase rights
under this Agreement and purchase all or a part of such Shares.
d. Escrow of Shares. The Certificate(s) representing all
Restricted Shares shall be held by the Secretary of the Company as escrow
holder (the "Escrow Holder"), along with a stock power executed by the
Executive in blank. The Escrow Holder is hereby directed to permit transfer of
such shares only in accordance with this Agreement and the Stockholders
Agreement. In the event further instructions are desired by the Escrow Holder,
he shall be entitled to rely upon written directions of the Board of Directors
of the Company (excluding any Senior Executive that is a director of the
Company). The Escrow Holder shall have no liability for any act or omission
hereunder while acting in good faith in the exercise of his own judgment. The
Company agrees to indemnify and hold Escrow Holder free and harmless from and
against any and all losses, costs, damages, liabilities or expenses, including
counsel fees to which Escrow Holder may be put or which he may incur by reason
of or in connection with the escrow arrangement hereunder. If the Company or
any assignee repurchases any of the Restricted Shares pursuant to this Section
7, the Escrow Holder, upon receipt of written notice of such repurchase from
the proposed transferee, shall take all steps necessary to accomplish such
repurchase. From time to time, upon Executive's request, Escrow Holder shall:
(i) cancel the certificate(s) held by the Escrow Holder and representing
Restricted Shares, (ii) cause new certificate(s) to be issued representing the
number of Restricted Shares no longer subject to repurchase pursuant
paragraphs (i), (ii) and (iii) of Section 7(b), which certificate(s) the
Escrow Holder shall deliver to Executive, and (iii) cause new certificate(s)
to be issued representing the balance of the Restricted Shares, which
certificate(s) shall be held in escrow by the Escrow Holder in accordance with
the provisions of this Section 7(d). Subject to the terms hereof, Executive
shall have all the rights of stockholder with respect to the Restricted Shares
while they are held in escrow, including without limitation, the right to vote
the Restricted Shares and receive any cash dividends declared thereon. If,
from time to time during the term of the Company's repurchase right, there is
(i) any stock dividend, stock split or other change in the Restricted Shares,
or (ii) any merger or sale of all or substantially all of the assets or other
acquisition of the Company, any and all new, substituted or additional
securities to which such Executive is entitled by reason of his ownership of
the Restricted Shares shall be immediately subject to this escrow, deposited
with the Escrow Holder and included thereafter as "Restricted Shares" for
purposes of this Agreement and the Company's repurchase right.
e. Legends. The share certificates evidencing the Restricted
Shares shall be endorsed with the following legend (in addition to any legend
required to be placed thereon by applicable federal or state securities laws
or the Company's Stockholders Agreement):
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED
ONLY IN ACCORDANCE WITH THE TERMS OF A MANAGEMENT AGREEMENT
BETWEEN THE COMPANY AND AN AFFILIATE OF THE STOCKHOLDER, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, WHICH
PROVIDES, AMONG OTHER THINGS, FOR THE REPURCHASE BY THE COMPANY
OF THE SHARES REPRESENTED BY THIS CERTIFICATE.
8. No Conflict With Prior Agreements; Due Authorization.
a. Executive represents to the Company that neither Executive's
execution of this Agreement or commencement of employment hereunder nor the
performance of Executive's duties hereunder conflicts with any contractual
commitment on Executive's part to any third party. The Company represents to
Executive that it is fully authorized and empowered by action of the Company's
Board of Directors to enter into this Agreement and that performance of its
obligations under this Agreement will not violate any agreement between it and
any other person, firm or other entity.
b. Nothing herein shall be construed to require Executive to use
or disclose any information that he is prohibited from using or disclosing as
a result of legal or contractual obligations.
9. Miscellaneous
a. Survival. Sections 4(d), 5, 6, 7 and 9 shall survive the
termination hereof.
b. Binding Effect. This Agreement shall be binding on the
Company and any person or entity which succeeds to the interest of the Company
(regardless of whether such succession occurs by operation of law) by reason
of the sale of all or a portion the Company's stock, a merger, consolidation,
or reorganization involving the Company or a sale of the assets of the
business of the Company (or portion thereof) in which Executive performs a
majority of his services. This Agreement shall also inure to the benefit of
Executive's heirs, executors, administrators and legal representatives.
c. Assignment. Except as provided under Section 9(b), neither
this Agreement nor any of the rights or obligations hereunder shall be
assigned or delegated by any party hereto without the prior written consent of
the other party, except that the Company may delegate to any of its direct or
indirect wholly owned subsidiaries its obligations to provide compensation and
benefits hereunder; provided no such delegation shall relieve the Company of
its obligations hereunder.
d. Entire Agreement. This Agreement, together with the Schedules
attached hereto, constitutes the entire agreement between the parties hereto
with respect to the matters referred to herein, and no other agreement, oral
or otherwise, shall be binding between the parties unless it is in writing and
signed by the party against whom enforcement is sought. There are no promises,
representations, inducements or statements between the parties other than
those that are expressly contained herein. Executive acknowledges that he is
entering into this Agreement of his own free will and accord, and with no
duress, that he has been represented and fully advised by competent counsel in
entering into this Agreement, that he has read it and that he understands it
and its legal consequences. No parol or other evidence may be admitted to
alter, modify or construe this Agreement, which may be altered, modified or
amended only by a writing signed by the parties hereto.
e. Severability; Reformation. In the event that one or more of
the provisions of this Agreement shall become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby. In the
event that any of Sections 6(a), (b) or (c) is not enforceable in accordance
with its terms, Executive and the Company agree that such Section shall be
reformed to make such Section enforceable in a manner which provides the
Company the maximum rights permitted at law.
f. Waiver. Waiver by any party hereto of any breach or default
by the other party of any of the terms of this Agreement shall not operate as
a waiver of any other breach or default, whether similar to or different from
the breach or default waived. No waiver of any provision of this Agreement
shall be implied from any course of dealing between the parties hereto or from
any failure by either party hereto to assert its or his rights hereunder on
any occasion or series of occasions.
g. Notices. Any notice required or desired to be delivered under
this Agreement shall be in writing and shall be delivered personally against
receipt, by courier service or by registered mail, return receipt requested,
and shall be effective upon actual receipt by the party to which such notice
shall be directed, and shall be addressed as follows (or to such other address
as the party entitled to notice shall hereafter designate in accordance with
the terms hereof):
If to the Company, to the attention of its Board of
Directors at the Company's principal executive offices
with a copy to:
Tritel, Inc.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
If to Executive:
Xxxxxxx X. Xxxxxxx, XX
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
h. Headings. Headings to paragraphs in this Agreement are for
the convenience of the parties only and are not intended to be part of or to
affect the meaning or interpretation hereof.
i. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
j. Withholding. Any payments provided for herein shall be
reduced by any amounts required to be withheld by the Company from time to
time under applicable Federal, State or local income or employment tax laws or
similar statutes or other provisions of law then in effect.
k. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
l. Resolution of Disputes. All disputes, controversies and
claims arising in connection with this Agreement that are not settled by
agreement between the parties shall be finally settled under the Commercial
Arbitration Rules of the American Arbitration Association ("AAA") in effect
from time to time. A single arbitrator shall be appointed by agreement between
the parties or, failing such agreement, by AAA. The arbitrator may grant any
remedy that (s)he deems just and equitable within the scope of this Agreement,
including specific performance. The award of the arbitrator shall be final and
binding and judgment thereon may be entered in any court having jurisdiction.
The costs and expenses (including reasonable attorney's fees) of the
prevailing party shall be borne and paid by the party that the arbitrator
determines is the non-prevailing party.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and Executive has hereunto set his
hand as of the day and year first above written.
TRITEL, INC.
By: _________________________________
Name:
Title:
EXECUTIVE:
-------------------------------------
XXXXXXX X. XXXXXXX, XX
SCHEDULE I
Duties
As Chief Executive Officer of the Company, Executive is responsible
for the overall direction of the business and for achieving maximum return on
invested capital. Executive shall also coordinate the efforts of the senior
executives and work with them to develop current and long-range objectives,
policies and procedures for the Company. Executive shall represent the Company
to customers, the financial community, and the general public. Additionally,
Executive shall have supervision over, and the responsibility for, the
day-to-day management, finances and operations of the Company, with all of the
powers and authority typically exercised by a chief executive officer of a
company, including, without limitation, the authority to hire and dismiss
employees, to select agents, representatives and consultants, to determine the
prices of services provided and products sold by the Company, and to determine
the Company's methods of operation and financial strategies.
SCHEDULE II
Permitted Activities
1. Executive is an officer, director and shareholder of Alaska-3 Cellular
Corporation. This privately held company is a member and the manager of
Alaska-3 Cellular, LLC (a manager managed limited liability company),
which owns the Alaska-3 RSA cellular license ("AK-3"). MSM, Inc.
currently provides management services to this market pursuant to a
management agreement. Executive is an officer, director and shareholder
of MSM, Inc. d/b/a "Mercury Communications Company." Pursuant to existing
management agreements, this privately held entity currently provides
management services for the owners of the AK-3, Arkansas-11 and
Illinois-9 RSA cellular licenses. It also serves as manager of Mercury
PCS, LLC, Mercury PCS II, LLC and Mercury Southern, LLC (all are manager
managed limited liability companies). Executive is also a party to a
management agreement with Mercury PCS, LLC and Mercury PCS II, LLC
whereby he is required to provide certain management and supervisory
services to those entities. The above-referenced cellular markets and the
PCS licenses owned by Mercury PCS II, LLC are currently being offered for
sale. Executive shall be permitted to engage in the management of the
above-referenced cellular markets, assist in the sale of them, assist in
the sale of the above-referenced PCS licenses and engage in other
activities relating to the winding up and liquidation of such businesses
(including without limitation managing and directing the defense or
pursuit of any litigation or administrative proceedings involving the
above-referenced entities or assets (collectively, the "Litigation")) for
a period of up to 24 months from the date of this Agreement, provided,
however, that the 24 month time limitation shall not apply to managing
and directing the defense or pursuit of the Litigation.
2. Executive is an officer, director and shareholder of Mercury Wireless
Management, Inc. ("MWM"). This privately held company currently manages
and markets tower sites and communications facilities and systems for the
City of Jackson, Mississippi and certain other private parties. Executive
shall be permitted to continue to engage in such activities for the
parties for whom MWM is rendering services on the date of the Securities
Purchase Agreement, but only with respect to facilities and systems
managed on such date, provided they do not interfere with the performance
of his duties under this Agreement.
3. Executive is an officer, director and shareholder of Mercury
International Ventures, Inc. This privately held company has pursued
international telecommunications licenses. Executive shall be permitted
to continue to engage in activities relating to the pursuit of any
licenses which Executive has pursued prior to the date of the Securities
Purchase Agreement provided such activities do not interfere with the
performance of his duties under this Agreement.
4. Executive was a Deposit Guaranty Corp. Advisory Board Member. This bank
holding company merged with First American Corporation of Nashville,
Tennessee effective May 1, 1998 and Executive is permitted to serve on
the corresponding Advisory Board of First American Corporation or its
Deposit Guaranty Division.
SCHEDULE III-A
Objectives
[TO BE ESTABLISHED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS]
SCHEDULE III-B
Objectives
1. The Company shall fail to satisfy the construction requirements set forth
in 47CFR 24.203 with respect to any FCC License owned by the Company or any
Subsidiary.
2. The Company shall fail to construct, or cause its Subsidiaries to
construct, Company Systems covering the Territory in accordance with the
Minimum Build-Out Plan.
3. The Company shall fail to comply with the covenant relating to the TDMA
Quality Standards set forth in Section 8.3 of the Stockholders Agreement.
4. The Company shall fail by a factor of more than 15% to meet, as of the end
of any fiscal quarter set forth on the attached budget as modified from time
to time by the Board of Directors, the applicable budgeted amount with respect
to (x) capital expenditures per covered POP, (y) earnings before interest,
taxes, depreciation and amortizations, or (z) minimum revenues.
5. The Company shall fail to comply with the terms of any representation,
warranty, covenant or agreement contained in the Credit Documents (as such
term is defined in the Securities Purchase Agreement) or in any other
agreement or instrument pursuant to which the Company has incurred
indebtedness for borrowed money in the principal amount of $25,000,000 or
more, which failure to comply results in an event of default thereunder
(unless such failure to comply has been waived or cured within the applicable
cure period).
SCHEDULE IV
Vesting Schedule
Vesting Date Event Percent of Base Shares
------------------ -----------------------
Commencement Date 20%
Second Anniversary 15%
Third Anniversary 15%
Fourth Anniversary 15%
Fifth Anniversary 15%
Completion of Year 1 and Year 2 of Minimum Build-Out
Plan 10%
Completion of Year 3 of Minimum Build-Out Plan 10%
---
Total 100%
Base Shares that are shares of Class C Common Stock shall vest prior to the
vesting of any shares of Class A Common Stock.
Accelerated Vesting
o Upon termination of the Employment Agreement by the Company pursuant to
Section 5(a)(vii) of this Agreement, the Base Shares that would have
vested on the immediately following Anniversary Date of such termination
shall vest.
