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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of April 20, 1999, by and between
SPECTRASITE HOLDINGS, 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
on the date hereof 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 date hereof he is 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 date hereof and ending on the fifth anniversary of
the date hereof (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
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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 date hereof 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 the Chief Executive 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 Board of Directors of the 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 Board of Directors of the Company may reasonably
prescribe. Except as may otherwise be approved in advance by the 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 Two Hundred Twenty-Five Thousand Dollars ($225,000) (said amount,
together with any increases thereto as may be determined from time to time by
the Board of Directors of the Company in its 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 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 (pro rated for any portion of a fiscal year
occurring during the Employment Term), 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.
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5. Other Benefits; Company Stock. (a) General. During the
Employment Term, the Employee shall:
(i) 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;
(ii) 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;
(iii) 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 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;
(iv) 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;
(v) 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; and
(vi) 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).
(b) Options. Simultaneously with the execution and delivery of
this Agreement by the parties hereto, the Company has granted the Employee
options (the "New Options") to purchase 775,000 shares of Common Stock, $.001
par value, of the Company at a purchase price of $5.00 per share, which options
shall vest in twenty percent increments over a five-year period with the first
twenty percent vesting on April 20, 2000, all as provided in the Option
Agreement
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of even date herewith between the Company and the Employee. Such New Options
shall be in addition to any other options previously granted to the Employee by
the Company (the "Original Options" and, collectively with the New Options, the
"Options"). The Company shall cause the Original Options to vest 100% in the
event that the Company terminates the Employee's employment hereunder other than
pursuant to clause (iii) of Section 7(a) below.
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 (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
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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 waives any requirement 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.
(g) The Employee hereby expressly acknowledges that the foregoing
provisions of this Section 6, insofar as they relate to Third Party
Information provided by or concerning Nextel Communications, Inc. or any
of its Affiliates (other that the Companies, Nextel Communications, Inc.
and such Affiliates (the "Nextel Beneficiaries")) are intended to be
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for the express benefit of the Nextel Beneficiaries and may be enforced
by the Nextel Beneficiaries by the same means and with the same effect as
if such Nextel Beneficiaries were the Company and signatory parties to
this Agreement.
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 his duties 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);
(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 affect 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) wilful 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 wilful
disregard by the Employee of, his material obligations under this Agreement or
otherwise relating to his employment, which gross negligence or wilful 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
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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
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.
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.
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(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 within the meaning of Section 9(d), provided, however, that the
provisions of this Section 9(a) shall not be deemed to prohibit the Employee's
ownership of not more than two percent (2%) of the total shares of all classes
of stock outstanding of any publicly held company, or ownership, whether through
direct or indirect stock holdings or otherwise, of one percent (1%) or more of
any other business. 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
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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 engages in the business of
acquiring or constructing towers for telecom carriers or operators or
engaging in any other business engaged in by the Companies at the time of
termination of the Employee's employment with the Company, 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
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 waives any requirement 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 and, as set
forth in Section 6(g) hereof, shall inure to the benefit of the Nextel
Beneficiaries.
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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 New York.
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
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.
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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.
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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 HOLDINGS, INC.
By /s/ XXXXX X. XXXXXX
--------------------------------
Name:
Title: Chief Financial Officer
/s/ XXXXXXX X. XXXXX
--------------------------------
Xxxxxxx X. Xxxxx
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