EXHIBIT 10.4
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
February 16, 1998, to be effective as of the Effective Date (as hereinafter
defined), by and between Specialty Teleconstructors, Inc., a Nevada corporation
(hereinafter, together with its successors, referred to as the "Company"), on
the one hand, and Xxxxxxx X. Xxxxxx (hereinafter referred to as the
"Executive"), on the other hand.
W I T N E S S E T H :
WHEREAS, the Executive is currently employed by OmniAmerica, Inc., a
Delaware corporation ("OmniAmerica");
WHEREAS, OmniAmerica is party to an Agreement and Plan of Merger (the
"Merger Agreement"), dated the date hereof, among the Company, OAI Acquisition
Corp., a Delaware corporation that is a wholly-owned subsidiary of the Company
("Acquisition"), OmniAmerica Holdings Corporation, a Delaware corporation that
is the sole stockholder of OmniAmerica ("Holdings"), HMTF/Omni Partners, L.P., a
Delaware limited partnership, and Omni/HSW Acquisition, Inc., a Delaware
corporation;
WHEREAS, pursuant to the terms of the Merger Agreement, Acquisition will be
merged (the "Merger") with and into Holdings, with Holdings being the surviving
corporation of the Merger;
WHEREAS, upon the consummation of the Merger, Holdings will become a
wholly-owned subsidiary of the Company;
WHEREAS, upon the consummation of the Merger, the Company desires to employ
the Executive in an executive capacity with the Company, and the Executive
desires to be employed by the Company in said capacity; and
WHEREAS, the parties hereto desire to set forth in writing the terms and
conditions of their understandings and agreements.
NOW THEREFORE, in consideration of the foregoing, of the mutual promises
contained herein and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1
Section 1. Definitions.
"Accrued Benefits" means (i) all salary earned or accrued
through the date the Executive's employment is terminated, (ii)
reimbursement for any and all monies advanced in connection with the
Executive's employment for reasonable and necessary expenses incurred by
the Executive through the date the Executive's employment is terminated
and (iii) all other payments and benefits to which the Executive may be
entitled under the terms of any applicable compensation arrangement or
benefit plan or program of the Company, including any earned and accrued,
but unused vacation pay.
"Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Affiliate" shall have the meaning given such term in Rule
12b-2 of the Act.
"Board" shall mean the board of directors of the Company.
"Cause" shall mean (i) the Executive's conviction of any crime
(other than minor traffic offenses and other similar minor infractions),
(ii) the Executive's breach of his obligations under this Agreement, (iii)
the Executive's insubordination, fraud or dishonesty in connection with
his employment hereunder, (iv) the Executive's refusal to perform his
duties as an employee of the Company for a reason other than mental or
physical disability or (v) the Executive's gross negligence or willful
misconduct injurious to the Company or its Subsidiaries. Notwithstanding
the above, the occurrence of the event specified in clause (ii) above
shall not constitute Cause unless the Company gives the Executive written
notice that such event constitutes Cause, and the Executive thereafter
fails to cure such event within thirty (30) days after receipt of such
notice.
"COBRA" means the Consolidated Omnibus Reconciliation Act of
1985.
"Effective Date" shall mean the date on which the transactions
contemplated under the Merger Agreement are consummated.
"Employment Period" shall mean the period during which the
Executive is employed by the Company.
"Financial Cause" shall mean (i) the breach by the Company or
its Subsidiaries of any covenants under any agreements in respect of
borrowed money binding on the Company or its Subsidiaries that is not
waived prior to becoming a default or event of default under such
agreement or (ii) the business conducted by the Company and its
Subsidiaries fails to achieve ninety percent (90%) of its budget in
2
any given year, as such budget was recommended by the Chief Executive
Officer of the Company and approved by the Board.
"Good Reason" shall mean (i) any material breach by the
Company of this Agreement, or (ii) any significant reduction, approved by
the Board without the Executive's written consent, in the Executive's
title, duties or responsibilities other than for Cause. Notwithstanding
the above, the occurrence of any of the events described above will not
constitute Good Reason unless the Executive gives the Company written
notice within 30 days after the occurrence of any of such events that any
of such events constitutes Good Reason, and the Company thereafter fails
to cure any such event within 30 days after receipt of such notice.
"Person" shall mean any "person", within the meaning of
Sections 13(d) and 14(d) of the Act, including a "group" as therein
defined.
"Subsidiary" shall mean, with respect to any Person, any other
Person of which such first Person owns the majority of the economic
interest in such Person or owns or has the power to vote, directly or
indirectly, securities representing a majority of the votes ordinarily
entitled to be cast for the election of directors or other governing
Persons.
Section 2. Term of Employment. Unless earlier terminated in
accordance with the terms of this Agreement, the Executive's Employment Period
shall commence on the Effective Date hereof (the "Employment Date") and shall
end on April 23, 2000; provided, however, that such Employment Period shall
be extended for successive terms of one (1) year each unless either party
advises the other, at least one hundred twenty (120) days prior to the end of
the initial term or annual extension, as the case may be, that it will not agree
to extend this Agreement.
Section 3. Duties. During the Employment Period, the Executive (i)
shall serve as Executive Vice President and Chief Financial Officer of the
Company, (ii) shall report directly to the Board and to the Chairman of the
Board of the Company, (iii) shall, subject to and in accordance with the
authority and direction of the Board and the Chairman of the Board of the
Company have such authority and perform in a diligent and competent manner such
duties as may be assigned to him from time to time by the Board and the Chairman
of the Board of the Company and (iv) shall devote his best efforts and such
time, attention, knowledge and skill to the operation of the business and
affairs of the Company as shall be necessary to manage and supervise the Company
and the other business and affairs of the Company. The Executive shall not,
however, be required to relocate his place of residence.
Section 4. Compensation. During the Employment Period, the Executive
shall be compensated as follows:
3
(a) the Executive shall receive, at such intervals and in
accordance with such Company policies as may be in effect from time to
time, an annual salary (pro rata for any partial year) equal to Two
Hundred Forty-Five Thousand and No/100 Dollars ($245,000.00) ("Base
Salary"), which Base Salary shall be subject to appropriate increase, as
determined by the sole discretion of the Board; provided, however, that
Executive is deemed to have commenced his employment effective as of the
Effective Date for the purpose of this Section 4(a), and shall be entitled
to receive such Base Salary effective from and after such date;
(b) the Executive shall be eligible to receive an annual bonus
for each fiscal year of the Company commencing with the fiscal year ending
June 30, 1998 (on a pro rata basis for any partial year) calculated based
upon budgeted earnings before income tax, depreciation and amortization as
approved by the Board and other criteria to be established by the Board in
its discretion at the beginning of each fiscal year and adjusted from time
to time;
(c) the Executive shall be reimbursed, at such intervals and
in accordance with such Company policies as may be in effect from time to
time, for any and all reasonable and necessary business expenses incurred
by him for the benefit of the Company, including but not limited to travel
expenses and other expenses as reflected in budgets submitted to and
approved by the Board from time to time;
(d) the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other executives of the Company as determined by
the Board from time to time;
(e) the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and programs
provided by the Company to similarly-situated executives of the Company on
a historical basis (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and programs) to the
extent applicable generally to other executives of the Company;
(f) the Executive shall be entitled to receive (in addition to
the benefits described above) such perquisites and fringe benefits
appertaining to his position in accordance with any practice established
by the Board; and
(g) in addition to any benefits the Executive may receive
pursuant to paragraph 4(d), as may be determined appropriate by the Board,
the Company may, from time to time, grant the Executive stock options (the
"Executive Options") exercisable for shares of capital stock of the
Company and, subject to the terms of this Agreement, such Executive
Options shall have such terms and provisions as may
4
be determined appropriate by the Board and consistent with historical
option grants to similarly-situated executives of the Company under the
Company's stock option plans. Any such Executive Options will be granted
under the Company's 1997 Stock Incentive Plan or a successor plan of the
Company.
Section 5. Termination of Employment.
(a) All Accrued Benefits to which the Executive (or his estate
or beneficiary) is entitled shall be payable in cash promptly upon
termination of his Employment Period, except as otherwise specifically
provided herein, or under the terms of any applicable policy, plan or
program.
(b) Any termination by the Company, or by the Executive, of
the Employment Period shall be communicated by written notice of such
termination to the Executive, if such notice is delivered by the Company,
and to the Company, if such notice is delivered by the Executive, each in
compliance with the requirements of Section 13 hereinbelow.
(c) If prior to the expiration of the Employment Period, the
Employment Period is terminated by the Executive for Good Reason or by the
Company for any reason other than Cause, Financial Cause or the
Executive's death, permanent disability (as defined in the Company's
Board-approved disability plan or policy, as in effect from time to time)
or retirement (as defined in the Company's Board-approved retirement plan
or policy, as in effect from time to time), then, as his exclusive right
and remedy in respect of such termination:
(i) the Executive shall be entitled to receive from the
Company his Accrued Benefits, except that, for this purpose, Accrued
Benefits shall not include any entitlement to severance under any
Company severance policy generally applicable to the Company's
salaried employees;
(ii) the Executive shall receive from the Company, as long
as the Executive does not violate the provisions of Section 6
hereof, severance pay equal to the Executive's then current monthly
Base Salary, payable in accordance with the Company's regular pay
schedule, for twelve (12) months from the date of termination of
employment; and
(iii) the Executive shall continue to be covered, upon the
same terms and conditions as described in Section 4(e) hereinabove,
by the same or equivalent medical, dental, and life insurance
coverages as in effect for the Executive immediately prior to the
termination of his employment, until the earlier of (A) the
expiration of the period for which he receives severance pay
pursuant to clause (c)(ii) above or (B) the date the Executive has
commenced
5
new employment and has thereby become eligible for comparable
benefits, subject to the Executive's rights under COBRA.
(d) If prior to the expiration of the Employment Period, the
Employment Period is terminated by the Company for Financial Cause, then,
as his exclusive right and remedy in respect of such termination:
(i) the Executive shall be entitled to receive from the
Company his Accrued Benefits, except that, for this purpose, Accrued
Benefits shall not include any entitlement to severance under any
Company severance policy generally applicable to the Company's
salaried employees;
(ii) the Executive shall receive from the Company, as long
as the Executive does not violate the provisions of Section 6
hereof, severance pay equal to the Executive's then current monthly
Base Salary, payable in accordance with the Company's regular pay
schedule, for six (6) months from the date of termination of
employment; and
(iii) the Executive shall continue to be covered, upon the
same terms and conditions as described in Section 4(e) hereinabove,
by the same or equivalent medical, dental, and life insurance
coverages as in effect for the Executive immediately prior to the
termination of his employment, until the earlier of (A) the
expiration of the period for which he receives severance pay
pursuant to clause (c)(ii) above or (B) the date the Executive has
commenced new employment and has thereby become eligible for
comparable benefits, subject to the Executive's rights under COBRA.
(e) Any amounts payable to the Executive in installments
pursuant to this Section 5 may, at the option of the Company, be paid in a
lump sum rather than in installments as provided above. In any event, all
such amounts (whether paid in installments or in a lump sum) shall be
considered severance payments and be in full and complete satisfaction of
the obligations of the Company to the Executive in connection with the
termination of the Executive.
(f) Notwithstanding anything else contained herein, if the
Executive voluntarily terminates his employment without Good Reason, or
the Company terminates the Executive for Cause or the Executive is
terminated by reason of death or permanent disability, all of his rights
to severance from the Company (including pursuant to any plan or policy of
the Company) shall terminate immediately, except the right to payment for
Accrued Benefits (other than severance) in respect of periods prior to
such termination.
6
Section 6. Further Obligations of the Executive.
(a) During and following the Executive's employment by the
Company, the Executive shall hold in confidence and not directly or
indirectly disclose or use or copy or make lists of any confidential
information or proprietary data of the Company or any of its Subsidiaries,
except to the extent authorized in writing by the Board or required by any
court or administrative agency, other than to an employee of the Company
or any of its Subsidiaries, or a Person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by the
Executive of his duties as an executive of the Company. Confidential
information shall not include any information known generally to the
public. All records, files, documents and materials, or copies thereof,
relating to the Company's or any of its Subsidiaries', business which the
Executive shall prepare, or use, or come into contact with, shall be and
remain the sole property of the Company or any of its Subsidiaries, as the
case may be, and shall be promptly returned by the Executive to the
Company or such Subsidiary (as applicable) upon termination of the
Executive's employment with the Company.
(b) Except with the Board's prior written approval, during the
Employment Period and for one (1) year after the termination of the
Employment Period or during any time the Executive is receiving severance
payments under this Agreement, the Executive shall not, directly or
indirectly:
(i) solicit, entice, persuade or induce any employee of
the Company or any of its Subsidiaries to terminate his employment
by the Company or any of its Subsidiaries or to become employed by
any Person other than Holdings, the Company or any of its
Subsidiaries; or
(ii) approach any such employee for any of the foregoing
purposes; or
(iii) authorize, solicit or assist in the taking of such
actions by any third party.
(c) During the Employment Period and for one (1) year after
the termination of the Employment Period and during any time the Executive
is receiving severance payments under this Agreement, the Executive shall
not, directly or indirectly, engage, participate, make any financial
investment in, or become employed by or render advisory or other services
to or for any Person or other business enterprise (other than the Company
and its Affiliates) having or operating transmission towers within any of
the same markets as the Company or any of its Subsidiaries (any of the
foregoing activities being referred to herein as "Competitive
Activities"). The foregoing covenant respecting Competitive Activities
shall not be construed to preclude the Executive from (A) making any
investments in the securities
7
of any company, whether or not engaged in competition the Company or any
of its Subsidiaries, to the extent that such securities are actively
traded on a national securities exchange or in the over-the-counter market
in the United States or any foreign securities exchange and such
investment does not exceed one percent (1%) of the issued and outstanding
shares of such company or give the Executive the right or power to control
or participate directly in making the policy decisions of such company,
(B) making any investments in the securities of, or becoming employed by
or rendering advisory or other services to or for, any Person or other
business enterprise having or operating transmission towers which
generated in the most recent fiscal year less than 25% of the total
revenues of any such enterprise and (C) maintaining any investments that
the Executive has as of the date of this Agreement in securities of
TowerWorks.
(d) Notwithstanding the foregoing provisions of Section 6(c),
during the Employment Period and for six (6) months after the termination
by the Company of the Employment Period for Financial Cause or without
Cause, and during any time the Executive is receiving severance payments
under this Agreement, the Executive shall not, directly or indirectly,
engage, participate, make any financial investment in, or become employed
by or render advisory or other services to or for any Person or other
business enterprise (other than the Company and its Affiliates) as would
constitute Competitive Activities. The foregoing covenant respecting
Competitive Activities shall not be construed to preclude the Executive
from (A) making any investments in the securities of any company, whether
or not engaged in competition with the Company or any of its Subsidiaries,
to the extent that such securities are actively traded on a national
securities exchange or in the over-the-counter market in the United States
or any foreign securities exchange and such investment does not exceed one
percent (1%) of the issued and outstanding shares of such company or give
the Executive the right or power to control or participate directly in
making the policy decisions of such company, (B) making any investments in
the securities of, or becoming employed by or rendering advisory or other
services to or for, any Person or other business enterprise having or
operating transmission towers which generated in the most recent fiscal
year less than 25% of the total revenues of any such enterprise and (C)
maintaining any investments that the Executive has as of the date of this
Agreement in securities of TowerWorks.
(e) If any court determines that any portion of this Section 6
is invalid or unenforceable, the remainder of this Section 6 shall not
thereby be affected and shall be given full effect without regard to the
invalid provision. If any court construes any of the provisions of this
Section 6, or any part thereof, to be unreasonable because of the duration
or scope of such provision, such court shall have the power to reduce the
duration or scope of such provision and to enforce such provision as so
reduced.
8
(f) The Executive hereby acknowledges and agrees that damages
will not be an adequate remedy for the Executive's breach of any of his
covenants contained in this Section 6, and further agrees that the Company
shall be entitled to obtain appropriate injunctive and/or other equitable
relief for any such breach, without the posting of any bond or other
security.
Section 7. Successors. The Company may assign its rights under this
Agreement to any successor to all or substantially all the assets of the
Company, by merger or otherwise, and may assign or encumber this Agreement and
its rights hereunder as security for indebtedness of the Company. Any such
assignment by the Company shall remain subject to the Executive's rights under
Section 5 hereof. The rights of the Executive under this Agreement may not be
assigned or encumbered by the Executive, voluntarily or involuntarily, during
his lifetime, and any such purported assignment shall be void ab initio.
However, all rights of the Executive under this Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, estates, executors, administrators, heirs and beneficiaries.
All amounts payable to the Executive hereunder shall be paid, in the event of
the Executive's death, to the Executive's estate, heirs or representatives.
Section 8. Third Parties. Except for the rights granted to the
Company and its Subsidiaries pursuant hereto (including, without limitation,
pursuant to Section 6 hereof) and except as expressly set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person other than the parties hereto and their
successors and permitted assigns any rights or remedies under or by reason of
this Agreement.
Section 9. Enforcement. The provisions of this Agreement shall be
regarded as divisible, and if any of said provisions or any part thereof is
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remainder of such provisions or parts hereof
and the applicability thereof shall not be affected thereby.
Section 10. Amendment. This Agreement may not be amended or modified
at any time except by a written instrument approved by the Board, and executed
by the Company and the Executive; provided, however, that any attempted
amendment or modification without such approval and execution shall be null and
void ab initio and of no effect.
Section 11. Withholding. The Company shall be entitled to withhold
from any amounts to be paid to the Executive hereunder any federal, state,
local, or foreign withholding or other taxes or charges which it is from time to
time required to withhold. The Company shall be entitled to rely on an opinion
of counsel if any question as to the amount or requirement of any such
withholding shall arise.
9
Section 12. Governing Law. This Agreement and the rights and
obligations hereunder shall be governed by and construed in accordance with the
laws of the State of Texas, without regard to principles of conflicts of law of
Texas or any other jurisdiction.
Section 13. Notice. Notices given pursuant to this Agreement shall
be in writing and shall be deemed given when received and, if mailed, shall be
mailed by United States registered or certified mail, return receipt requested,
addressee only, postage prepaid:
If to the Company:
Specialty Teleconstructors, Inc.
00000 Xxxxx Xxxxxxx 00 Xxxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Chairman of the Board
If to the Executive:
Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxx Xxxx.
Xxxx Xxxxx, Xxxxxxx 00000
or to such other address as the party to be notified shall have given to the
other in accordance with the notice provisions set forth in this Section 13.
Section 14. No Waiver. No waiver by either party at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at any time.
Section 15. Headings. The headings contained herein are for
reference only and shall not affect the meaning or interpretation of any
provision of this Agreement.
Section 16. Post-Merger Stockholders Agreement. The Executive hereby
agrees to become a party to that certain Post-Merger Stockholders Agreement,
dated as of the Effective Date, among the Company and the shareholders of the
Company signatory thereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
IN WITNESS WHEREOF, the parties have executed this Agreement in one
or more counterparts, each of which shall be deemed one and the same instrument,
as of the day and year first written above.
SPECIALTY TELECONSTRUCTORS, INC.
By:
Name:
Title:
EXECUTIVE:
Xxxxxxx X. Xxxxxx
