1
RETENTION AND ACHIEVEMENT INCENTIVE AGREEMENT
THIS RETENTION AND ACHIEVEMENT INCENTIVE AGREEMENT dated as of July 1,
1998 by and between American Telecasting, Inc. (the "Company") and Xxxxx X.
Xxxxx, (the "Employee").
WITNESSETH:
WHEREAS, the Company recognizes the competitive nature of the market
for executive talent; and
WHEREAS, the Company has determined that appropriate steps should be
taken to encourage certain key executives to remain employed by the Company by
providing for certain benefits; and
WHEREAS, the Company wishes to compensate the Employee for the
achievement of certain significant strategic objectives:
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree to the following:
1. Definitions. The capitalized terms used herein shall have the
meanings ascribed to them below.
(a) "Cause" shall mean (A) the willful and continued
failure by the Employee substantially to perform the
Employee's duties with the Company (other than any
such failure resulting from the Employee's incapacity
due to physical or mental illness) as determined by
the Board of Directors of the Company (the "Board"),
after a demand for substantial performance is
delivered to the Employee by the Company, which
demand specifically identifies the manner in which
the Company believes that the Employee has not
substantially performed the Employee's duties or (B)
the willful engaging by the Employee in misconduct
which is demonstrably and materially injurious to the
Company, momentarily or otherwise. Notwithstanding
the foregoing, the Employee's employment shall not be
deemed to have been terminated for Cause unless and
until there shall have been delivered to the Employee
by the Company a copy of a Notice of Termination
authorized by the Board stating that in the good
faith opinion of the Board the Employee is guilty of
conduct set forth in clauses (A) or (B) above and
specifying the particulars there of in detail.
2
RETENTION AND ACHIEVEMENT INCENTIVE AGREEMENT
Page 2 of 6
(b) "Closing Period" shall mean the last twenty (20) days
during the month of June, 1999 on which trading
occurs on the national securities exchange or other
trading system on which the Common Stock is
principally traded (the "Exchange").
(c) "Common Stock" means the Common Stock, par value
$0.01 per share, of the Company.
(d) "Disability" shall be deemed the reason for the
termination by the Company of the Employee's
employment, if, as a result of the Employee's
incapacity due to physical or mental illness, the
Employee shall have been absent from the full-time
performance of the Employee's duties with the Company
for a period of six (6) consecutive months.
(e) "Material Employment Change" shall mean any of the
following:
(i) a reduction in the in the Employee's base
and other compensation as in effect on the
date hereof or as the same may be increased
from time to time during the term of this
Agreement; or
(ii) the relocation of the Employee's current
principal place of employment to a location
that is more than 25 miles from the
Employee's current principal place of
employment or requiring the Employee to be
based anywhere other than such principal
place of employment (or permitted relocation
thereof) except for required travel on the
Company's business to an extent
substantially consistent with the Employee's
present business travel obligations.
2. Retention Incentive.
(a) Upon the earliest to occur of the following dates and
events while the Employee is employed by the Company,
the Employee shall be entitled to receive a lump sum
cash payment of $50,000 (the "Retention Incentive"):
3
RETENTION AND ACHIEVEMENT AGREEMENT
Page 3 of 6
(i) the termination of the Employee's employment
by the Company other than for Cause;
(ii) the termination of the Employee's employment
by the Employee following the occurrence of
a Material Employment Change;
(iii) June 30, 1999;
(iv) the Employee's death or Disability.
(b) If the Employee's employment is terminated prior to
June 30, 1999 by the Company for Cause or by the
Employee other than (i) following a Material
Employment Change or (ii) on account of the
Employee's death or Disability, no Retention
Incentive shall be paid to the Employee.
3. Achievement Incentive.
(a) As soon as practicable following June 30, 1999, the
Employee shall be entitled to receive the amount
determined under paragraph (c) below (the
"Achievement Incentive"), provided that:
(i) the Employee is employed by the Company on
June 30, 1999 or his employment has been
terminated prior to such date by the Company
other than for Cause or by the Employee
following a Material Employment Change or by
reason of the Employee's death or
Disability; and
(ii) the average closing price of the Common
Stock on the Exchange during the Closing
Period is at least $2.00 per share.
(b) If (i) the average closing price of the Common Stock
on the Exchange during the Closing Period is less
than $2.00 per share or (ii) the Employee's
employment is terminated prior to June 30, 1999 by
the Company for Cause or by the Employee other than
(A) following a Material Employment Change or (B) on
account of the Employee's death or Disability, no
Achievement Incentive shall be paid to the Employee.
4
RETENTION AND ACHIEVEMENT AGREEMENT
Page 4 of 6
(c) If an Achievement Incentive becomes payable in
accordance with paragraph (a) above, the amount of
such Achievement Incentive shall be equal to the sum
of (i) $58,440 plus (ii) the product of (A) $58,440
multiplied by (B) a fraction, the numerator of which
is the excess, if any, of the average closing price
of the Common Stock on the Exchange during the
Closing Period over $2.00, and the denominator of
which is $3.00 (provided, however, that in no event
shall such fraction exceed 1).
(d) If an Achievement Incentive becomes payable to the
Employee, then (i) the first 40% of such Achievement
Incentive shall be paid in cash and (ii) the
remaining 60% of such Achievement Incentive shall be
paid in cash, Common stock or a combination thereof,
as determined in the sole discretion of the Company.
(e) Appropriate adjustments in the dollar amounts set
forth in Sections 3(a)(ii), 3(b)(i) and 3(c)(ii)(B)
shall be made by the Company to give effect to
changes in the Common Stock resulting from
subdivisions, consolidations or reclassifications of
the Common Stock, the payment of dividends or other
distributions by the Company (other than dividends or
other distributions determined by the Company to be
in the ordinary course), mergers, consolidations,
combinations or similar transactions or other
relevant changes in the capital of the Company.
4. No Effect on Other Contractual Rights. The provisions of this
Agreement, and any payment provided for hereunder, shall not
reduce any amounts otherwise payable, or in any way diminish
the Employee's existing rights or rights (or rights which
would accrue solely as a result of the passage of time) under
any employee benefit plan or employment agreement or other
contract, plan or arrangement nor shall any amounts payable
hereunder be considered in determining the amount of benefits
payable to the Employee under any such plan, agreement or
contract.
5
RETENTION AND ACHIEVEMENT AGREEMENT
Page 5 of 6
5. Successor to the Company.
(a) This Agreement shall be binding on the Company's
successors and assigns.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal and legal
representatives, executors, administrators,
successors, heirs, distributees, devisees and
legatees. If the Employee should die while any
amounts are still payable to the Employee hereunder,
all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this
Agreement to the Employee's personal representative,
devisee, legatee, or other designee or, if there be
no such designee, to the Employee's estate.
6. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return
receipt requested, postage prepaid as follows:
If to the Company:
0000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Chairman of the Board
With a copy to:
Skadden, Arps, Slate, Meather & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
If to the Employee:
0000 Xxxxxx Xxxxx Xx.
Xxxxxx Xxxx, XX 00000
or such other address as either party may have furnished to
the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon
receipt.
6
RETENTION AND ACHIEVEMENT AGREEMENT
Page 6 of 6
7. Amendment Waiver. No provision of this Agreement may be
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by
the Employee and the Company. No waiver by either party hereto
at any time of any breach of the other party hereto of, or
compliance with, any condition or provision of this Agreement
to be performed by such party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
8. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforce
ability of any other provision of this Agreement, which shall
remain in full force and effect.
9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original
but all of which together will constitute one and the same
instrument.
10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Colorado.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
By: Xxxxxx X. Xxxxxxxxx
Title: President and CEO
Employee: /s/ Xxxxx X. Xxxxx
--------------------------------------
Xxxxx X. Xxxxx
