EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated December 6, 1997
between Specialty Teleconstructors, Inc., a Nevada corporation having its
principal executive office located at 00000 Xxx 00 Xxxxx, Xxxxx Xxxxx, Xxx
Xxxxxx 00000 (the "Corporation"), and Xxxxxxx X. Xxxxxx, an individual residing
at 0000 Xxxxxxxxxx, Xxxxxx, Xxxxx 00000 (the "Employee").
WITNESSETH:
WHEREAS, the parties are entering into this Agreement to set forth and
confirm their respective rights and obligations with respect to the Employee's
employment by the Corporation.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto mutually agree as follows:
1. Employment; Term; Duties. The Corporation hereby employs the Employee
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as Vice President and Chief Financial Officer of the Corporation. The term of
the Employee's employment pursuant to this Agreement will commence on December
29, 1997 (the "Commencement Date") and will continue for the period from that
date until terminated as described in Section 5 hereof. The Employee hereby
accepts such employment, and agrees to devote his full time and effort to the
business and affairs of the Corporation with such duties consistent with the
Employee's position as may be assigned to him from time to time by the Board of
Directors of the Corporation.
2. Compensation. In consideration of all services rendered by the
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Employee during the term of his employment pursuant to this Agreement, the
Corporation will provide the Employee with the following compensation:
(a) Base Salary. The Corporation will pay the Employee a base salary
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at the annual rate of $120,000, payable in accordance with the
Corporation's payroll practices from time to time in effect. The
Corporation will review the Employee's salary at least once each year and
may in its discretion increase the Employee's salary. Notwithstanding
anything to the contrary in this Agreement, nothing in this Agreement shall
be deemed to impose any obligation on the Corporation or any of its
subsidiaries to continue to employ the Employee, or on the Employee to
remain in the employ of the Corporation or any of its subsidiaries.
(b) Annual Bonus. In addition to the Employee's base salary, for as
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long as the Employee is employed by the Corporation, the Employee will be
entitled to an annual bonus which shall be based on growth in earnings
before interest, taxes, depreciation and amortization of the Corporation
and its consolidated subsidiaries ("EBITDA"), as determined in accordance
with generally accepted accounting principles, during each fiscal year
beginning with the fiscal year ending June 30, 1998 over EBITDA for the
immediately preceding fiscal year. The annual bonus will calculated as
follows: If growth in EBITDA is less than 5%, bonus is $0. If growth in
EBITDA is greater than 5% but less than 10%, bonus is 25% of salary. If
growth in EBITDA is greater than 10% but less than 15%, bonus is 50% of
salary. If growth in EBITDA is greater than 15% but less than 20%, bonus is
75% of salary and if growth in EBITDA is greater than 20%, bonus is 100% of
salary. The annual bonus for the fiscal year ending June 30, 1998 only will
be prorated such that the Employee's annual bonus for the fiscal year
ending June 30, 1998 will be 7/12 of the annual bonus otherwise payable
pursuant to the foregoing formula. The annual bonus will be paid within
sixty (60) days after the end of each fiscal year. At the discretion of the
Board of Directors, all or any portion of the annual bonus may be provided
in the form of additional equity in the Corporation.
2. Stock Options; Sale of Shares to Employee. In addition to the
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Employee's base salary and annual bonus, the Employee will receive 175,000
options (the "Employee's Stock Options") under the Corporation's 1997 Stock
Incentive Plan (the "97 Plan"). The Employee Stock Options will be issued on the
Commencement Date at an exercise price equal to the closing price of
Corporation's Common Stock on the Nasdaq National Market on the
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Commencement Date. The Employee Stock Options will be issued pursuant to a Stock
Option Agreement in the form attached hereto as Exhibit "A" (the "Employee's
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Stock Option Agreement") and will be issued subject to the terms and conditions
contained or referred to therein. In addition, the Corporation will sell to the
Employee 50,000 shares (the "Purchased Shares") of Corporation Common Stock for
an aggregate purchase price (the "Purchase Price") equal to the product obtained
by multiplying 50,000 by the closing price of Corporation's Common Stock on the
Nasdaq National Market on the Commencement Date. The Purchase Price will be
payable by the Employee's execution and delivery to the Corporation of a
recourse Promissory Note (the "Note") in the original principal amount of the
Purchase Price. The Employee understands and agrees that the Purchased Shares
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act") and, therefore, cannot be resold or otherwise transferred
unless such shares are registered under the Securities Act or unless an
exemption from the applicable registration requirements of the Securities Act is
available and that, accordingly, the certificate representing the Purchased
Shares will bear an appropriate restrictive legend.
3. Employee Benefits. The Employee will be entitled to participate in
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all incentive, retirement, profit-sharing, life, medical, disability and other
benefit plans and programs (collectively, "Benefit Plans") as are from time to
time generally available to other executives of the Corporation with comparable
responsibilities, subject to the provisions of those programs. Without limiting
the generality of the foregoing, the Corporation will provide the Employee with
basic health and medical benefits on the terms that such benefits are provided
to other executives of the Corporation with comparable responsibilities. The
Employee will also be entitled to a minimum of three weeks paid vacation per
year. Vacation time must be used during the year in which it accrues. Unused
vacation time may not be carried over into the next employment year. Unused
vacation time will not be paid to the Employee upon termination of the
Employee's employment.
4. Reimbursement of Expenses. The Corporation will promptly reimburse
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the Employee, in accordance with the Corporation's policies and practices in
effect from time to time, for all expenses reasonably incurred by the Employee
in performance of the Employee's duties under this Agreement. In addition, the
Corporation will pay for any dues, fees or continuing education costs necessary
to maintain any professional licenses the Employee now holds.
5. Termination. The Employee's employment by the Corporation: (a)
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shall terminate upon the Employee's death or Disability (as defined below); (b)
shall terminate sixty (60) days after either the Employee or the Corporation
gives written notice to the other that the Employee or it does not wish to
continue the Employee's employment hereunder (a "Non-Continuation Notice"); (c)
may be terminated by the Corporation with or without Cause (as defined below) at
any time. For purposes of this Agreement, the term "Disability" shall mean a
physical or mental impairment which renders the Employee unable to carry out the
Employee's duties under this Agreement for more than ninety (90) days in any
twelve-month period. For purposes of this Agreement, the term "Cause" shall mean
(i) the Employee's willful and continued failure substantially to perform the
Employee's duties with the Corporation, (ii) any material breach of this
Agreement by the Employee which is not cured within thirty (30) days after
notice from the Corporation thereof, (iii) commission of any act of fraud,
embezzlement or dishonesty by the Employee, or (iv) any other intentional
misconduct by the Employee adversely affecting the business or affairs of the
Corporation in a material manner.
6. Consequences of Termination.
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(a) Consequences of Termination For Cause. If the Employee's
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employment is terminated for cause, then (i) this Agreement shall terminate
immediately, (ii) except as may have vested or accrued or been paid or
become payable prior to the date of such termination or otherwise required
under applicable law, from and after such the date, the Corporation shall
be under no obligation to pay the Employee any compensation (base salary or
annual bonus) pursuant to this Agreement, (iii) the Employee's benefits and
rights under any Benefit Plan shall be paid, retained or forfeited in
accordance with the terms of such plan, and (iv) the Employee's rights with
respect to the Employee's Stock Options will be determined in accordance
with the Employee's Stock Option Agreement.
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(b) Consequences of Termination on Employee's Death or Disability.
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If the Employee's employment is terminated because of the Employee's death
or Disability, then (i) this Agreement shall terminate immediately, (ii)
the Employee or his legal representative or estate, as the case may be,
will be entitled to receive any base salary due to the Employee through the
last day of employment, plus any accrued but unpaid annual bonus, to which
the Employee may have been entitled on the last day of employment, but had
not yet received , (iii) the Employee's benefits and rights under any
Benefit Plan shall be paid, retained or forfeited in accordance with the
terms of such plan, and (iv) the Employee's rights with respect to the
Employee's Stock Options will be determined in accordance with the
Employee's Stock Option Agreement.
(c) Consequences of Termination Pursuant to a Termination Event. If
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the Employee's employment is terminated pursuant to a Termination Event (as
defined below), then (i) the Corporation will pay the Employee, in full
satisfaction of all of its obligations under this Agreement (except for its
obligations under Section 3 and this Section 6(c) hereof), an amount (the
"Termination Payment") equal to the sum of (1) any base salary due to the
Employee through the last day of employment, plus any accrued but unpaid
annual bonus, to which the Employee may have been entitled on the last day
of employment, but had not yet received, and (2) an amount equal to 100% of
the amount of compensation (base salary and annual bonus) paid (or payable)
by the Corporation to the Employee in respect of the last fiscal year of
the Corporation immediately preceding the date of termination, and (ii) for
one (1) year following the Termination Event, the Corporation will provide
the Employee and members of his immediate family with basic health and
medical benefits on the terms that such benefits are provided to other
executives of the Corporation with comparable responsibilities as of the
date of the Employee's termination of employment; provided, however, that
(1) the Corporation's obligation to provide these basic health and medical
benefits pursuant to this Section 6(c) will cease immediately upon the
Employee's obtaining other full-time employment, and (2) if the Corporation
is unable to provide the Employee with these basic health and medical
benefits under then existing plans without costs it considers excessive,
the Corporation will be entitled to satisfy any such obligation by making a
payment to the Employee equal to the cost to the Corporation during the
last full year immediately preceding the Termination Event of providing
such benefits to the Employee, (iii) the Employee's benefits and rights
under any Benefit Plan, other than any basic health and medical benefit
plan, shall be paid, retained or forfeited in accordance with the terms of
such plan, and (iv) the Employee's rights with respect to the Employee's
Stock Options will be determined in accordance with the Employee's Stock
Option Agreement . The Termination Payment will be in addition to any
salary and bonus otherwise paid during the fiscal year in which the
Termination Event occurs and will be paid in a lump sum within sixty (60)
days following the Termination Event and will be subject to any applicable
payroll or other taxes required to be withheld. The Termination Payment
will not be subject to offset on account of any remuneration paid or
payable to the Employee for any subsequent employment the Employee may
obtain, whether during or after the period during which the Termination
Payment is made and the Employee shall have no obligation whatever to seek
any subsequent employment. For purposes of this Agreement, the term
"Termination Event" shall mean (i) the Employee's receipt of a Non-
Continuation Notice from the Corporation, (ii) termination of the
Employee's employment by the Corporation for any reason other than for
Cause or the Employee's death or Disability, or (iii) the Employee's
submission of a Non-Continuation Notice to the Corporation notifying the
Corporation of the Employee's voluntary termination of employment on
account of (a) a 10% or more reduction of the Employee's base salary by the
Corporation, (b) the Corporation's removing the Employee from or assigning
the Employee duties or responsibilities that are inconsistent, in any
significant respect, with the scope of duties or responsibilities
associated with the office of Vice President and Chief Financial Officer of
the Corporation, or (c) relocation of the Employee's office outside the
Dallas/Ft. Worth, Texas other than to the Corporation's corporate
headquarters.
7. Employee's Office. Initially, the Employee's office will be located
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in the Corporation's offices in Dallas, Texas. In the event the Employee's
office is relocated to a location outside the Dallas/Ft. Worth, Texas area, the
Corporation will pay or reimburse the Employee for reasonable moving expenses.
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8. Non-disclosure. The Employee agrees that the Employee will not,
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without the prior written consent of the Corporation, communicate or divulge
(other than in the regular course of the Corporation's business) to anyone other
than the Corporation, its subsidiaries and those designated by it, any
confidential information, knowledge or data relating to the Corporation or any
of its subsidiaries or affiliates, or to any of their respective businesses,
obtained by the Employee before or during the term of the Employee's employment
from the Corporation or any of its subsidiaries, except to the extent that the
Employee is compelled pursuant to an order of a court or other body having
jurisdiction over such matter to do so (in which case the Corporation shall be
given prompt notice of such intention to divulge and an opportunity to object to
such disclosure), or such information, knowledge or data is public knowledge or
generally known within the Corporation's industry other than through improper
disclosure by the Employee.
9. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement, or its breach, shall be settled by arbitration in the City of
Albuquerque, New Mexico, in accordance with the then governing rules of the
American Arbitration Association for commercial matters and the New Mexico
Uniform Arbitration Act then in effect (with the right of discovery for all
parties as provided in the New Mexico Rules of Civil Procedure). This Agreement
shall be specifically enforceable under the prevailing arbitration law. The
award rendered by the arbitrators shall be final and judgment upon it shall be
entered in any court having jurisdiction. The prevailing parties' attorneys'
fees and costs in connection with arbitration shall be paid by the losing party.
10. Successors; Binding Agreement; Assignment. The Corporation shall
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require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Corporation to expressly assume and agree in writing to perform
this Agreement in the same manner and to the same extent that the Corporation
would be required to perform it if no such succession had taken place, provided
that the Employee need only be a senior executive officer with the authority,
powers and responsibilities set forth in Section 1 hereof with respect to the
subsidiary or subdivision which operates the business of the Corporation as it
exists on the date of such business combination. Failure of the Corporation to
obtain such express assumption and agreement at or prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Employee to compensation and benefits from the Corporation in the same amount
and on the same terms to which the Employee would be entitled hereunder if the
Corporation terminated the Employee's employment without Cause, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the date of termination. As used in this
Agreement, "Corporation" shall mean the Corporation as hereinbefore defined and
any successor to its business or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise. The Corporation may
not assign this Agreement except in connection with, and to the acquiror of, all
or substantially all of the business or assets of the Corporation, provided such
acquiror expressly assumes and agrees in writing to perform this Agreement as
provided in this Section 10. The Employee may not assign his rights or delegate
his duties or obligations under this Agreement.
11. Notice. Any notices or other communications required or permitted to
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be given hereunder shall be in writing and shall be deemed to have been duly
made or given when hand delivered, one (1) business day after being transmitted
by telecopier (confirmed by mail) or sent by overnight courier against receipt,
or five (5) days after being mailed by registered or certified mail, postage
prepaid, return receipt requested to the party to whom such communication is
given at the address set forth below, which address may be changed by notice
given in accordance with this Section 11:
If to the Corporation:
Specialty Teleconstructors, Inc.
00000 Xxx 00 Xxxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, President
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If to The Employee:
Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
12. Miscellaneous.
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(a) Severability. If any provision of this Agreement shall be
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declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions
hereof which shall remain in full force and effect.
(b) No Oral Modification, Waiver or Discharge. No provision of this
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Agreement may be modified, waived or discharged orally, but only by a
waiver, modification or discharge in writing signed by the Employee and
such officer as may be designated by the Board of Directors of the
Corporation to execute such a waiver, modification or discharge. No waiver
by either party hereto at any time of any breach by the other party hereto
of, or failure to be in compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the time or at any prior
or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not expressly set forth in this Agreement or
in the documents attached as Exhibits to this Agreement.
(c) Entire Agreement. This Agreement and the Exhibits attached
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hereto represent the entire agreement of the parties and shall supersede
any and all previous contracts, arrangements or understandings, express or
implied, between the Employee and the Corporation with respect to the
subject matter hereof.
(d) Choice of Law. This Agreement shall be construed, interpreted,
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and governed in accordance with the laws of New Mexico, without reference
to rules relating to conflicts of law.
(e) Section Headings for Convenience Only. The section headings
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herein are for the purpose of convenience only and are not intended to
define or limit the contents of any section.
(f) Execution in Counterparts. The parties may sign this Agreement
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in counterparts, all of which shall be considered one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the day
and year first above written.
SPECIALTY TELECONSTRUCTORS, INC.,
A Nevada corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Chairman of the Board,
President, Chief Executive Officer and
Treasurer
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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