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Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of December 30, 1999, by and between
SPECTRASITE COMMUNICATIONS, INC., a Delaware corporation (the "Company"), and
Xxxxxxx X. Xxxxxxxx (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
December 30, 1999 (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 anyway 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 third 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 third 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 President, Broadcasting
Division of the Company, shall faithfully and competently perform such duties as
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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
Company shall from time to time determine. The Employee shall perform his duties
principally at the offices of the Company in Dallas, Texas, 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 Two Hundred Thousand Dollars ($200,000) (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 Forty Percent (40%) of Salary 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.
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
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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;
(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); and
(vii) be entitled to use of an automobile or an automobile allowance
consistent with that provided by the Company to its senior management.
(b) Options. The Company shall cause SpectraSite Holdings, Inc. to issue
options to the Employee under the SpectraSite Holdings, Inc. Stock Option Plan
to purchase Six Hundred and Forty Thousand (640,000) shares of Common Stock,
$.001 par value, of SpectraSite Holdings, Inc. at Ten Dollars and Fifty-Six
Cents ($10.56) per share. The Employee's interest in such options shall vest
over a five (5) year period beginning January 1, 2000, depending upon the
satisfaction of certain performance criteria set forth in Exhibit A hereto. In
the event the Employment Term is terminated by the Company without cause
pursuant to Section 7(a)(iv), the Employee shall be deemed to have satisfied (i)
the "Level 3" performance criteria for EBITDA for Broadcast Tower Ownership as
set forth on Exhibit A for each calendar year through December 31, 2004 which
ends after the date of such termination, and (ii) the performance criteria for
EBITDA for Tower Fabrication and Erection as set forth on Exhibit A for each
calendar year through December 31, 2004 which ends after the date of such
termination; and the stock options which would have become exercisable upon
attainment of such performance criteria subsequent to such termination shall
immediately become exercisable as of the date of such termination. (The Employee
also may exercise any stock options which become exercisable prior to such
termination of employment.)
(c) Restricted Stock. The Employee shall be offered for purchase 125,000
shares of Common Stock of the Company, in accordance with the terms and
conditions of a Restricted Stock Purchase Agreement substantially in the form
attached hereto. Within thirty (30) days of his purchase of such shares (if
any), the Employee shall file an election with the Internal Revenue Service
("IRS") pursuant to Section 83(b) of the Internal Revenue Code to include in his
gross income for 2000 the excess of the fair market value of such shares over
the one Cent ($0.01) per share "Purchase Price" he paid for such shares under
the Restricted Stock Purchase Agreement (the "Discount"). The fair market value
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of the shares shall be determined by the Company in its sole discretion, based
upon the transactions in the Company shares on NASDAQ at the time of the
Employee's purchase. At the time the Employee purchases such shares, the Company
shall pay to the Employee a bonus equal to seventy percent (70%) of the
Discount, which is intended to pay the income and payroll taxes due on such
Discount plus the income and payroll taxes on the bonus, such that the Employee
will not have any out-of-pocket cash expense for income and payroll taxes with
respect to the Employee's purchase of the such shares.
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 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.
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(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, therefore, 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.
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 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
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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, (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, or (F) solely for
purposes of determining the Employee's vested interest in the stock options
under Section 5(b) and the related stock option agreement (and not for
purposes of determining the eligibility for the severance benefits
described in Section 7(b)), materially substandard performance of his
duties, which material substandard performance either continues unremedied
for a period of fifteen (15) days after written notice thereof to the
Employee or cannot be remedied in such period of time; (provided that, in
the case of an indictment described in clause (A) above, and in the case of
clauses (B), (C), (D), (E) and (F) 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 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
payments, if any, which may be then otherwise payable to the Employee pursuant
to the terms of the Company's benefits plans.
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(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 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 (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. 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
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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 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 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, Welch, 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.
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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 Texas.
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 judgement 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
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/Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
By /s/Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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