May 7, 2002
Xxxx Xxxxx
Dear Xxxx:
This letter (the "Letter Agreement") sets forth the terms of your employment
with Western Wireless Corporation ("WWC"), effective May 10, 2002 (or date of
execution).
1. ROLE: Your title will be Chief Operating Officer. In that capacity you
will report to the Chief Executive Officer of WWC (the "CEO").
2. RESPONSIBILITIES: Your responsibilities will include supervision of all
operating functions of WWC including sales and marketing, customer
service, information technology and engineering together with such
other duties as may be assigned to you by the CEO. You will devote
substantially all of your business time and attention to the
obligations delineated in this Letter Agreement.
3. CASH COMPENSATION: Your base compensation will be $325,000, payable in
accordance with standard payroll practices of WWC. In addition, you
will have an opportunity, as determined by WWC, to earn a performance
bonus targeted at $225,000 per year, to be paid annually at yearend.
The bonus will be based on a formula based on growth, cash flow and
leadership. Your first year's bonus will be prorated for your start
date. It is understood that nothing contained herein will prevent WWC,
in its sole and absolute discretion, from, at any time, increasing your
compensation, either permanently or for a limited period, whether in
base compensation, by bonus or otherwise, if WWC in its sole
discretion, shall deem it advisable to do so in order to recognize and
fairly compensate you for the value of your services to WWC; provided,
however, that nothing contained in this paragraph three shall in any
manner obligate WWC to make any such increase or provide any such
additional compensation or benefits.
4. STOCK OPTIONS: You will receive an option to purchase 100,000 shares of
WWC's common stock at an exercise price per share as of the closing
price of the stock on your acceptance of this offer or other mutually
agreed upon date. Your options will have a 4-year vesting and shall
contain Change of Control protection consistent with other officers of
WWC. You will be eligible to continue, during the course of your
employment, to participate in the option program at a level to be
determined by the CEO and the Compensation Committee.
5. RESTRICTED STOCK GRANT: You will receive a restricted stock grant of
35,000 shares and a cash tax gross up upon your start. The shares will
be fully vested when granted but subject to forfeiture if you terminate
your employment voluntarily without Cause or your employment is
terminated by WWC with Cause prior to your one year anniversary with
WWC. This forfeiture restriction will terminate if there is a Change of
Control of WWC. For the purposes of this Letter Agreement, "Change of
Control" shall be as defined in the WWC Stock Option Agreement.
6. RELOCATION: We will pay you a flat payment of $200,000, which is
intended to cover your costs of relocation including moving your
belongings, vehicles and animals, the costs associated with buying and
selling houses and any other costs associated with the move. This
payment is intended to cover all costs of relocation except that it is
understood that the company will separately reimburse you for the cost
of travel to and from Seattle prior to your relocation, the cost of
temporary housing in the Seattle area and the cost of house hunting
trips for your family to come to the Seattle area.
7. BENEFITS: You will also be eligible to participate in the WWC's
Employee Benefit Programs upon eligibility, which includes a group
health insurance program; life insurance and 401(k) plan with matching.
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You will be entitled to four weeks of vacation annually.
8. EXPENSES: WWC will reimburse you for all reasonable out-of-pocket
business expenses paid or incurred by you in connection with the
performance of your duties, upon submission of signed, itemized lists
of such expenses on general forms established for that purpose by WWC.
9. INDEMNIFICATION: WWC will enter into an Indemnification Agreement with
you pursuant to which WWC will agree to indemnify you against certain
liabilities arising by reason of your affiliation with WWC.
10. NON-DISCLOSURE: You agree not to disclose at any time, whether during
the term of this Letter Agreement or thereafter, any secret or
confidential information relating to WWC's or any of its subsidiaries'
businesses, financial condition or prospects, which information you
have obtained while employed by WWC or by any of its subsidiaries or
any of the predecessors in interest of any of them, except (i) as may
be required in furtherance of the businesses of WWC or of any of its
subsidiaries, (ii) with WWC's express prior written consent, (iii) if
such information is made generally available to the public through no
fault of yours, or (iv) if such disclosure is required by applicable
law or regulation or by legal process and then only with prompt written
notice to WWC in advance of any such disclosure.
11. NON-COMPETE: You agree that, during the term of your employment by WWC
and for a period of one (1) year immediately following the termination
of your employment with WWC for any reason whatsoever, you will not,
either directly or indirectly, for compensation or any other
consideration, individually or as an employee, broker, agent,
consultant, lender, contractor, advisor, solicitor, stockholder
(provided that ownership of 5% or less of the outstanding stock of any
corporation listed on a national securities exchange is not
prohibited), proprietor, partner, or person having any other material
economic interest in, affiliated with or rendering services to any
other entity, engage in or provide services to or for a business that
is substantially the same as or similar to WWC's or its subsidiaries
businesses and which competes within the applicable commercial mobile
radio services markets serviced by WWC or its subsidiaries, directly or
indirectly.
12. EMPLOYMENT AT WILL: Notwithstanding any other provision of this Letter
Agreement, your employment by WWC may be terminated by WWC at any time,
with or without Cause, as defined below. In the event of a termination
for Cause you will have no rights to severance payments. Termination
for "Cause" means (i) your gross neglect or willful material breach of
your principal employment responsibilities or duties, (ii) a final
judicial adjudication that you are guilty of a felony, (iii) fraudulent
conduct as determined by a court of competent jurisdiction in the
course of your employment with WWC or any of its subsidiaries, (iv) the
breach by you of the covenant set forth in paragraph nine, below, or
(v) the material breach by you of any other provision of this Letter
Agreement which continues uncured for a period of thirty (30) days
after notice thereof by WWC. In the event of your voluntary termination
of employment with WWC, you will have no rights to severance benefits.
In the event of an involuntary termination for other than Cause (which
shall include your resignation as a direct result of (i) a reduction in
your base compensation and/or incentive bonus target percentage, or
(ii) the material breach by the Company of any provision of this Letter
Agreement which continues uncured for a period of thirty (30) days
after notice thereof by you), then (A) you will be entitled to receive
a severance payment in an amount equal to your accrued but unpaid
existing annual targeted incentive bonus through the date of
termination, twelve (12) months of your then base compensation and an
amount equal to twelve (12) months of your existing annual targeted
incentive bonus; (B) WWC will, at its expense, make all COBRA benefit
payments on behalf of you and your dependents for twelve (12) months
following such involuntary termination; and (C) with respect to any
stock options previously granted to you by WWC which remain unvested at
the time of the involuntary termination, notwithstanding the vesting
language in the stock option agreement pursuant to which such options
were granted, there shall be immediate vesting
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of that portion of each such grant of unvested stock options as equals
the product of the total number of such options under such grant which
remain unvested multiplied by a fraction the numerator of which is the
sum of (i) the number of days from the date on which the last vesting
of options under such grant took place to and including the date on
which the termination occurs plus (ii) 365 and the denominator of which
is the number of days remaining from the date on which the last vesting
of options under such grant took place to and including the date on
which the final vesting under such grant would have occurred.
Your death or permanent disability will be deemed an involuntary
termination for other than Cause. "Permanent disability" shall mean
your inability substantially to render the services required hereunder
for eight (8) months in any eighteen (18) month period because of a
physical or mental condition, it being understood that until you have
received notice from WWC terminating this Letter Agreement, you will
continue to receive your base compensation and all other benefits to
which you are entitled under this Letter Agreement.
You agree that upon termination of your employment by WWC for any
reason you will surrender to WWC all proprietary records, lists and
other documents obtained by you or entrusted to you during the course
of your employment by WWC, together with all copies of all such
documents. This Letter Agreement contains the entire agreement between
you and WWC with respect to your employment by WWC, other than human
resource and corporate policies, which are to be executed by all
employees. This Letter Agreement may not be amended, waived, changed,
modified or discharged except by an instrument in writing executed by
or on behalf of you and WWC.
13. NOTICES: All notices, requests, demands and other communications with
respect to this Letter Agreement will be in writing and will be deemed
to have been duly given if delivered by hand, registered or certified
mail (first class postage and fees prepaid, return receipt requested),
telecopier or overnight courier guaranteeing next-day delivery, as
follows:
Western Wireless Corporation
0000 - 000xx Xxxxxx XX, #000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
Xxxx Xxxxx
and to such other persons as either you or WWC has specified in writing
to the other by notice as aforesaid.
14. ENFORCEMENT: If any part of this Letter Agreement is hereafter
construed to be invalid or unenforceable in any jurisdiction, the same
will not affect the remainder of the Letter Agreement or the
enforceability of such part in any other jurisdiction, which will be
given full effect, without regard to the invalid portions or the
enforceability in such other jurisdiction. If any part of this Letter
Agreement is held to be unenforceable because of the scope thereof, you
and WWC agree that the court making such determination will have the
power to reduce the duration and/or area of such provision and, in its
reduced form, said provision shall be enforceable; provided, however,
that such court's determination will not affect the enforceability of
this Letter Agreement in any other jurisdiction beyond such court's
authority.
15. JURISDICTION: This Letter Agreement will be governed by and construed
and interpreted in accordance with the laws of the State of Washington
without reference to conflicts of laws principles.
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Please signify your acceptance of the terms of this Letter Agreement by signing
where indicated below.
Sincerely yours,
WESTERN WIRELESS CORPORATION
By:
---------------------------------
Xxxx X. Xxxxxxx
Chief Executive Officer
AGREED TO AND ACCEPTED:
---------------------------------
Xxxx Xxxxx
