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Exhibit 10.5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of January 1, 2001, by and
between SPECTRASITE COMMUNICATIONS, INC., a Delaware corporation (the
"Company"), and Xxxxxxx X. Xxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS the Company desires to induce the Employee to enter
into employment with the Company for the period provided in this Agreement, and
the Employee is willing to accept such employment with the Company on a
full-time basis, all in accordance with the terms and conditions set forth
below;
NOW, THEREFORE, for and in consideration of the premises
hereof and the mutual covenants contained herein, the parties hereto hereby
covenant and agree as follows:
1. Employment. (a) The Company hereby agrees to employ the
Employee, and the Employee hereby agrees to accept such employment with the
Company, beginning January 1, 2001 (the "Effective Date") and continuing for the
period set forth in Section 2 hereof, all upon the terms and conditions
hereinafter set forth.
(b) The Employee affirms and represents that as of the
commencement of his employment by the Company on the Effective Date he will be
under no obligation to any former employer or other party which is in any way
inconsistent with, or which imposes any restriction upon, the Employee's
acceptance of employment hereunder with the Company, the employment of the
Employee by the Company, or the Employee's undertakings under this Agreement.
2. Term of Employment. (a) Unless earlier terminated as
provided in this Agreement, the term of the Employee's employment under this
Agreement shall be for a period beginning on the Effective Date and ending on
the fifth anniversary of the Effective Date (the "Initial Term").
(b) The term of the Employee's employment under this Agreement
shall be automatically renewed for additional one-year terms (each a "Renewal
Term") upon the expiration of the Initial Term or any Renewal Term unless the
Company or the Employee delivers to the other, at least one year prior to the
expiration of the Initial Term or the then current Renewal Term, as the case may
be, a written notice specifying that the term of the Employee's employment will
not be renewed at the end of the Initial Term or such Renewal Term, as the case
may be. The period from the Effective Date until the fifth anniversary of said
date or, in the event that the Employee's employment hereunder is earlier
terminated as provided herein or renewed as provided in this Section 2(b), such
shorter or longer period, as the case may be, is hereinafter called the
"Employment Term".
3. Duties. The Employee shall be employed as Chief Operating
Officer of the Company, shall faithfully and competently perform such duties as
inhere in such position and as are specified in the By-laws of the Company and
shall also perform and discharge such other executive employment duties and
responsibilities as the Chief Executive Officer or Board of Directors of the
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Company shall from time to time determine. The Employee shall perform his duties
principally at the offices of the Company in Cary, North Carolina, with such
travel to such other locations from time to time as the Company may reasonably
prescribe. Except as may otherwise be approved in advance by the Chief Executive
Officer or Board of Directors of the Company, and except during vacation periods
and reasonable periods of absence due to sickness, personal injury or other
disability, the Employee shall devote his full business time throughout the
Employment Term to the services required of him hereunder. The Employee shall
render his business services exclusively to the Company and its subsidiaries
during the Employment Term and shall use his best efforts, judgment and energy
to improve and advance the business and interests of the Company and its
subsidiaries in a manner consistent with the duties of his position. Nothing
contained in this Section 3 shall preclude the Employee from performing services
for charitable or not-for-profit community organizations, provided that such
activities do not interfere with the Employee's performance of his duties and
responsibilities under this Agreement.
4. Salary and Bonus. (a) Salary. As compensation for the
performance by the Employee of the services to be performed by the Employee
hereunder during the Employment Term, the Company shall pay the Employee a base
salary at the annual rate of Three Hundred Thousand Dollars ($300,000), which
shall be reviewed as of each anniversary of the Effective Date and may be
increased by the Company in its sole discretion (said amount, together with any
increases thereto as may be determined from time to time by the executive
officers of the Company in their sole discretion, being hereinafter referred to
as "Salary"). Any Salary payable hereunder shall be paid in regular intervals in
accordance with the Company's payroll practices from time to time in effect.
(b) Bonus. The Employee shall be eligible to receive bonus
compensation from the Company of up to Three Hundred Thousand Dollars ($300,000)
in respect of each fiscal year (or portion thereof) occurring during the
Employment Term in accordance with the Company's management bonus plan as in
effect from time to time, in each case as may be determined by the Board of
Directors of the Company in its sole discretion on the basis of
performance-based criteria to be established from time to time by the Board of
Directors in its sole discretion and communicated to you prior to or within a
reasonable period after the commencement of each fiscal year.
5. Other Benefits. During the Employment Term, the Employee
shall:
(a) be eligible to participate in employee fringe benefits and
pension and/or profit sharing plans that may be provided by the Company for its
senior executive employees in accordance with the provisions of any such plans,
as the same may be in effect from time to time;
(b) be eligible to participate in any medical and health plans
or other employee welfare benefit plans that may be provided by the Company for
its senior executive employees in accordance with the provisions of any such
plans, as the same may be in effect from time to time;
(c) be entitled to the number of paid vacation days in each
calendar year determined by the Company from time to time for its senior
executive officers, provided that such number of paid vacation days in each
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calendar year shall not be less than Twenty work days (Four calendar weeks); the
Employee shall also be entitled to all paid holidays given by the Company to its
senior executive officers;
(d) be eligible for consideration by the Board of Directors of
the Company for awards of stock options under any stock option plan which may be
established by the Company for its and its subsidiaries' key employees, the
amount, if any, of shares for which options may be granted to Employee to be in
the sole discretion of the Board of Directors of the Company;
(e) be entitled to sick leave, sick pay and disability
benefits in accordance with any Company policy that may be applicable to senior
executive employees from time to time;
(f) be entitled to reimbursement for all reasonable and
necessary out-of-pocket business expenses incurred by the Employee in the
performance of his duties hereunder in accordance with the Company's normal
policies from time to time in effect (including, without limitation, relocation
expenses); and
(g) be entitled to use of an automobile or an automobile
allowance consistent with that provided by the Company to its senior management.
6. Confidential Information. The Employee hereby covenants,
agrees and acknowledges as follows:
(a) The Employee has and will have access to and will
participate in the development of or be acquainted with confidential or
proprietary information and trade secrets related to the business of the Company
and any present or future subsidiaries or affiliates of the Company
(collectively with the Company, the "Companies"), including but not limited to
(i) customer lists; claims histories, adjustments and settlements and related
records and compilations of information; the identity, lists or descriptions of
any new customers, referral sources or organizations; financial statements; cost
reports or other financial information; contract proposals or bidding
information; business plans; training and operations methods and manuals;
personnel records; software programs; reports and correspondence; and management
systems, policies or procedures, including related forms and manuals; (ii)
information pertaining to future developments such as future marketing or
acquisition plans or ideas, and potential new business locations; (iii)
confidential or non-public information relating to business operations and
strategic plans of third parties with which the Companies have or may be
assessing commercial arrangements, including, without limitation, site build and
deployment plans and schedules, search ring and site locations or potential
locations, actual or projected wireless system subscribers and capital
expenditures and operating cost information ("Third Party Information") and (iv)
all other tangible and intangible property, which are used in the business and
operations of the Companies but not made public. The information and trade
secrets relating to the business of the Companies described hereinabove
(including Third Party Information) in this paragraph (a) are hereinafter
referred to collectively as the "Confidential Information", provided that the
term Confidential Information shall not include any information (x) that is or
becomes generally publicly available (other than as a result of violation of
this Agreement by the Employee), (y) that the Employee receives on a
nonconfidential basis from a source (other than the Companies or their
representatives) or, in the case of Third Party Information, from a source
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(other than the Companies, the third parties to which such information relates
or their respective representatives) that is not known by him to be bound by an
obligation of secrecy or confidentiality to any of the Companies (or such third
parties, in the case of Third Party Information) or (z) that was in the
possession of the Employee prior to disclosure by the Companies (or such third
parties, in the case of Third Party Information).
(b) The Employee shall not disclose, use or make known for his
or another's benefit any Confidential Information or use such Confidential
Information in any way except as is in the best interests of the Companies in
the performance of the Employee's duties under this Agreement. The Employee may
disclose Confidential Information when required by a third party and applicable
law or judicial process, but only after providing immediate notice to the
Company at any third party's request for such information, which notice shall
include the Employee's intent with respect to such request.
(c) The Employee acknowledges and agrees that a remedy at law
for any breach or threatened breach of the provisions of this Section 6 would be
inadequate and, there fore, agrees that the Companies shall be entitled to
injunctive relief in addition to any other available rights and remedies in case
of any such breach or threatened breach by the Employee (and the Employee hereby
(i) waives to the extent permitted by law any requirement that, and (ii) agrees
not to request that, any of the Companies provide a bond or other security in
connection with the issuance of any such injunction); provided, however, that
nothing contained herein shall be construed as prohibiting the Companies from
pursuing any other rights and remedies available for any such breach or
threatened breach.
(d) The Employee agrees that upon termination of his
employment with the Company for any reason, the Employee shall forthwith return
to the Company all Confidential Information in whatever form maintained
(including, without limitation, computer discs and other electronic media).
(e) The obligations of the Employee under this Section 6
shall, except as otherwise provided herein, survive the termination of the
Employment Term and the expiration or termination of this Agreement.
(f) Without limiting the generality of Section 10 hereof, the
Employee hereby expressly agrees that the foregoing provisions of this Section 6
shall be binding upon the Employee's heirs, successors and legal
representatives.
7. Termination. (a) The Employee's employment hereunder
shall be terminated upon the occurrence of any of the following:
(i) death of the Employee;
(ii) the Employee's inability to perform the essential functions of his
position on account of disability or incapacity for a period of one
hundred eighty (180) or more days, whether or not consecutive, within
any period of twelve (12) consecutive months;
(iii) the Company giving written notice, at any time, to the Employee
that the Employee's employment is being terminated "for cause" (as
defined below);
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(iv) the Company giving written notice, at any time, to the Employee
that the Employee's employment is being terminated other than pursuant
to clause (i), (ii) or (iii) above; or
(v) the Employee terminates his employment hereunder for any reason
whatsoever (whether by reason of retirement, resignation or
otherwise).
The following actions, failures and events by or affecting the
Employee shall constitute "cause" for termination within the meaning of clause
(iii) above: (A) a conviction of the Employee of, or the entering of a plea of
nolo contendere by the Employee with respect to, a felony, (B) dependence on, or
habitual abuse of, controlled substances or alcohol (in the case of alcohol
abuse, that has a material adverse effect on Employee's performance of his
obligations under this Agreement) or acts of dishonesty by the Employee that are
materially detrimental to one or more of the Companies, (C) willful misconduct
by the Employee that materially damages the business of one or more of the
Companies, (D) gross negligence by the Employee in the performance of, or
willful disregard by the Employee of, his material obligations under this
Agreement or otherwise relating to his employment, which gross negligence or
willful disregard continues unremedied for a period of fifteen (15) days after
written notice thereof to the Employee or (E) failure by the Employee to obey
the reasonable and lawful orders and policies of the Board of Directors that are
material to and consistent with the provisions of this Agreement (provided that,
in the case of an indictment described in clause (A) above, and in the case of
clauses (B), (C) and (E) above, the Employee shall have received written notice
of such proposed termination (which notice shall state the Sections of this
Agreement pursuant to which such termination is being effected and a description
of the facts supporting such termination) and a reasonable opportunity (together
with the Employee's counsel) to discuss the matter with the Board of Directors
of the Company, followed by a notice that the Board of Directors of the Company
adheres to its position).
(b) In the event that the Employee's employment terminates
pursuant to clause (i) or (ii) of Section 7(a) above or is terminated by the
Company pursuant to clause (iv) of Section 7(a) above, whether during the
Initial Term or during any Renewal Term pursuant to Section 2(b) above, then (i)
during the period beginning on the date of such termination and ending on the
last day of the Applicable Period (as defined in Section 9(a)), the Company
shall pay to the Employee, as severance pay or liquidated damages or both,
monthly payments equal to one-twelfth of (x) the rate per annum of his Salary at
the time of such termination plus (y) the average annualized bonus the Employee
was paid by the Company for the fiscal years during the term of this Agreement
ending prior to the date of such termination, provided, however, that no such
payments shall be required to be made if the Employee fails to comply with his
obligations under Section 9 below; (ii) the Company shall continue to provide
the Employee with the health insurance benefits provided to other employees of
the Company (including employer contributions) from the date of such termination
until the earlier to occur of (x) the last day of the Applicable Period or (y)
the date upon which the Employee becomes eligible for coverage under the health
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insurance plan of another employer and (iii) the Options held by the Employee
that are vested as of the date of such termination shall continue to be
exercisable by the Employee until the earlier to occur of (x) the last day of
the Applicable Period or (y) the expiration of the ten year term of such
Options.
(c) Notwithstanding anything to the contrary expressed or
implied herein, except as required by applicable law and except as set forth in
Section 7(b) above, the Company (and its affiliates) shall not be obligated to
make any payments to the Employee or on his behalf of whatever kind or nature by
reason of the Employee's cessation of employment (including, without limitation,
by reason of termination of the Employee's employment by the Company's for
"cause"), other than (i) such amounts, if any, of his Salary as shall have
accrued and remained unpaid as of the date of said cessation and (ii) such other
amounts, if any, which may be then otherwise payable to the Employee pursuant to
the terms of the Company's benefits plans.
(d) No interest shall accrue on or be paid with respect to any
portion of any payments hereunder.
(e) The Employee's rights under Section 7(b) above shall be
considered severance pay in consideration of the employee's past services and
the Employee's continued service to the Company from the Effective Date, and the
Employee's entitlement thereto shall neither be governed by any duty to mitigate
the Employee's damages by seeking further employment nor offset by any
compensation the Employee may receive from employment following his termination
of employment with the Company.
8. Non-Assignability. (a) Neither this Agreement nor any right
or interest hereunder shall be assignable by the Employee or his beneficiaries
or legal representatives without the Company's prior written consent; provided,
however, that nothing in this Section 8(a) shall preclude the Employee from
designating a beneficiary to receive any benefit payable hereunder upon his
death or incapacity. The Company may assign all of its rights and obligations
under this Agreement to (i) any person or entity acquiring the principal assets
used and useful in the operation of the Company or (ii) any affiliate of the
Company in connection with the reorganization of the Company and its affiliates;
and, in the event of such an assignment, each reference in this Agreement to the
Company shall include the assignee from and after the date of such assignment.
(b) Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or to assignment by operation of law, and
any attempt, voluntary or involuntary, to effect any such action shall be null,
void and of no effect.
9. Restrictive Covenants.
(a) Competition. During the Employment Term and during the
Applicable Period (as defined below), the Employee will not directly or
indirectly (as a director, officer, executive employee, manager, consultant,
independent contractor, advisor or otherwise) engage in competition with, or own
any interest in, perform any services for, participate in or be connected with
any business or organization which engages in competition with any of the
Companies in the United States within the meaning of Section 9(d), provided,
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however, that the provisions of this Section 9(a) shall not be deemed to
prohibit the Employee's (i) ownership of not more than two percent (2%) of the
total shares of all classes of stock outstanding of any publicly held company,
or (ii) ownership, whether through direct or indirect stock holdings or
otherwise, of not more than one percent (1%) of any other business; or (iii)
being employed by a wireless telecommunications services provider during the
Applicable Period. For purposes of this Agreement, the "Applicable Period" shall
mean the twenty-four (24) month period following the termination of the
Employee's employment hereunder for any reason whatsoever.
(b) Non-Solicitation. During the Employment Term and during
the Applicable Period, the Employee will not directly or indirectly induce or
attempt to induce any management employee of any of the Companies to leave the
employ of the Company or such subsidiary or affiliate, or in any way interfere
with the relationship between any of the Companies and any employee thereof.
(c) Non-Interference. During the Employment Term and during
the Applicable Period, the Employee will not directly or indirectly hire,
engage, send any work to, place orders with, or in any manner be associated with
any supplier, contractor, subcontractor or other business relation of any of the
Companies if such action would be known by him to have a material adverse effect
on the business, assets or financial condition of any of the Companies or
materially interfere with the relationship between any such person or entity and
any of the Companies.
(d) Certain Definitions.
(i) For purposes of this Section 9, a person or entity (including,
without limitation, the Employee) shall be deemed to be a competitor of
one or more of the Companies, or a person or entity (including, without
limitation, the Employee) shall be deemed to be engaging in competition
with one or more of the Companies, if such person or entity either (A)
engages in the business of acquiring or constructing towers for telecom
carriers or operators or (B) engages in any other business engaged in
by the Companies at the time of termination of the Employee's
employment with the Company and for which the Employee had
responsibility or authority or about which business the Employee
received Confidential Information; in either case in the geographic
region encompassing the service areas in which any of the Companies
conduct, or had an established plan to begin conducting, their
businesses at the time of termination of the Employee's employment with
the Company.
(ii) For purposes of this Section 9, no corporation or entity that may
be deemed to be an affiliate of the Companies solely by reason of its
being controlled by, or under common control with, Welsh, Carson,
Xxxxxxxx & Xxxxx VIII, L.P. or any of their respective affiliates other
than the Companies, will be deemed to be an affiliate of the Companies.
(e) Certain Representations of the Employee. In connection
with the foregoing provisions of this Section 9, the Employee represents that
his experience, capabilities and circumstances are such that such provisions
will not prevent him from earning a livelihood. The Employee further agrees that
the limitations set forth in this Section 9 (including, without limitation, time
and territorial limitations) are reasonable and properly required for the
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adequate protection of the current and future businesses of the Companies. It is
understood and agreed that the covenants made by the Employee in this Section 9
(and in Section 6 hereof) shall survive the expiration or termination of this
Agreement.
(f) Injunctive Relief. The Employee acknowledges and agrees
that a remedy at law for any breach or threatened breach of the provisions of
Section 9 hereof would be inadequate and, therefore, agrees that the Company and
any of its subsidiaries or affiliates shall be entitled to injunctive relief in
addition to any other available rights and remedies in cases of any such breach
or threatened breach (and the Employee hereby (i) waives to the extent permitted
by law any requirement that, and (ii) agrees not to request that, any of the
Companies provide a bond or other security in connection with the issuance of
any such injunction); provided, however, that nothing contained herein shall be
construed as prohibiting the Company or any of its affiliates from pursuing any
other rights and remedies available for any such breach or threatened breach.
10. Binding Effect. Without limiting or diminishing the effect
of the provisions affecting assignment of this Agreement, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, successors, legal representatives and assigns.
11. Notices. All notices which are required or may be given
pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if given in writing and (i) delivered personally,
(ii) mailed by certified or registered mail, return receipt requested and
postage prepaid, (iii) sent via a nationally recognized overnight courier or
(iv) sent via facsimile confirmed in writing to the recipient, if to the Company
at the Company's principal place of business, and if to the Employee, at his
home address most recently filed with the Company, or to such other address or
addresses as either party shall have designated in writing to the other party
hereto, provided, however, that any notice sent by certified or registered mail
shall be deemed delivered on the date of delivery as evidenced by the return
receipt.
12. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina.
13. Severability. The Employee agrees that in the event that
any court of competent jurisdiction shall finally hold that any provision of
Section 6 or 9 hereof is void or constitutes an unreasonable restriction against
the Employee, the provisions of such Section 6 or 9 shall not be rendered void
but shall apply with respect to such extent as such court may judicially
determine constitutes a reasonable restriction under the circumstances. If any
part of this Agreement other than Section 6 or 9 is held by a court of competent
jurisdiction to be invalid, illegible or incapable of being enforced in whole or
in part by reason of any rule of law or public policy, such part shall be deemed
to be severed from the remainder of this Agreement for the purpose only of the
particular legal proceedings in question and all other covenants and provisions
of this Agreement shall in every other respect continue in full force and effect
and no covenant or provision shall be deemed dependent upon any other covenant
or provision.
14. Waiver. Failure to insist upon strict compliance with any
of the terms, covenants or conditions hereof shall not be deemed a waiver of
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such term, covenant or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
15. Arbitration. With the exception of any dispute regarding
the Employee's compliance with the provisions of Sections 6 and 9 above, any
dispute relating to or arising out of the provisions of this Agreement shall be
decided by arbitration in Cary, North Carolina, in accordance with the Expedited
Arbitration Rules of the American Arbitration Association then obtaining, unless
the parties mutually agree otherwise in a writing signed by both parties. This
undertaking to arbitrate shall be specifically enforceable. The decision
rendered by the arbitrator will be final and judgment may be entered upon it in
accordance with appropriate laws in any court having jurisdiction thereof. Each
of the parties shall pay his or its own legal fees associated with such
arbitration.
16. Entire Agreement; Modifications. This Agreement
constitutes the entire and final expression of the agreement of the parties with
respect to the subject matter hereof and supersedes all prior agreements, oral
and written, between the parties hereto with respect to the subject matter
hereof. This Agreement may be modified or amended only by an instrument in
writing signed by both parties hereto.
17. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have duly
executed and delivered this Agreement as of the day and year first above
written.
SPECTRASITE COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Executive
Officer
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx
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