Preview of our top selling Chief Technology Officer (CTO) Employment Agreement
Alamosa - Alamosa CTO Employment Agreement
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EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into this date by and between ALAMOSA PCS LLC, a Texas Limited Liability Company, having its principal executive office located at 4747 S. Loop 289, Lubbock, Texas 79424 (the "Company"), and
DON STULL, an individual residing at Lubbock, Texas (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 Company.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto mutually agree as follows:
1. EMPLOYMENT; TERM; DUTIES. The Company hereby employs the Employ
ee as Chief Technology Officer. The term of the Employee's employment, pursuant to this Agreement, will commence on October 29, 1998, (the "Commencement Date") and will continue for a period of three (3) years, or the termination of this Agreement, as des
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ribed in Section 5 hereof, whichever shall occur first. The Employee hereby accepts such employment, and agrees to devote his full time and effort to the business and affairs of the Company with such duties consistent with the Employee's position as may b
e assigned to him from time to time by the Chief Executive Officer or the Chief Operating Officer of the Company.
2. COMPENSATION. In consideration of all services rendered by the Employee during the term of his employment, pursuant to this Agreement, the Company will provide the Employee with the following compensation:
(a) BASE SALARY. The Company will pay the Employee a base salary at
the annual rate of $90,000.00, payable semi-monthly in accordance
with the Company's payroll practices from time to time in effect.
The Company 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
Company or any of its subsidiaries to continue to employ the
Employee beyond the term of employment set forth herein, or on the
Employee to remain in the employ of the Company or any of its
subsidiaries, beyond the term of employment set forth herein.
(b) BONUS. In addition to the Employee's base salary, for each
quarterly period the Employee is employed by the Company, beginning
January 1, 1999, the Employee is entitled to a Quarterly Bonus of
$7,500.00 for each calender quarter period in which the milestones
(the "Milestones") set forth in the attached Exhibit "A", which is
incorporated by this reference as if copied herein in full, are met
or exceeded. This bonus shall be referred to
as the "Quarterly Bonus". This Quarterly Bonus will be paid within
forty-five (45) days of the end of each calendar quarter. If the
Milestones are not met, Employee is entitled to a portion of the
Quarterly Bonus, calculated based on the pro rata portion of the
Milestones met. For each quarterly period in which the Exceptional
Milestones, as set forth in Exhibit "A", are met or exceeded,
Employee is entitled to an additional $7,500.00 Bonus. This
additional Bonus shall be referred to as the "Exceptional Quarterly
Bonus". This Exceptional Quarterly Bonus will be paid within
forty-five (45) days of the end of each calendar quarter. If the
Exceptional Milestones are not met, Employer is entitled to a
portion of the Exceptional Bonus, calculated based on the prorata
portion of the Exceptional Milestones met.
(c) EMPLOYEE INCENTIVE OWNERSHIP PLAN. The Employee shall be granted
an Incentive Ownership Plan. This Incentive Ownership Plan shall
consist of an Option granted to the Employee to purchase an interest
in the Company at the price set forth in this Incentive Ownership
Plan. This Option granted to Employee shall be an Option to purchase
Incentive Units in the Company. These Incentive Units shall be
non-voting Class II Membership in the Company, pursuant to Section
3.11(b) of the Regulations of the Company.
The Purchase Price for each category of Incentive Units is set forth
in the attached Exhibit "B", which is incorporated by this reference
as if copied herein in full. This Exhibit "B" also sets forth the
Purchase Price for each category of Incentive Units based upon the
date of the exercise of any of the Options set forth herein.
(1) Incentive Units Granted to Employee. Employee is hereby
granted the following number of Incentive Units in the
following categories, to-wit:
Category Number of Units
-------- ---------------
Series 8 100
Series 15 100
Series 25 100
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Total Units 300
Each Incentive Unit shall represent an interest in the Company,
which interest shall be calculated as follows:
500 x 100 = % ownership interest in
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(50,000,000 plus additional capital calls) the Company
The term "additional capital calls" used above means any additional
voluntary capital contributions made, pursuant to Section 2.3 of the
Regulations of the Company.
(2) Vesting of Option. The Option granted to Employee shall vest
over a period beginning eighteen (18) months after the Commencement
Date. On the first day following eighteen (18) months after the
Commencement Date, forty-six percent (46%) of the Option shall be
vested giving the Employee the right to purchase forty-six (46)
Units in each series. For each month of the Employee's continued
employment following the initial eighteen (18) months of the
Employees employment, Employee shall have the right to purchase an
additional three (3) Units in each series. This monthly vesting
shall continue until such time as the Employee has an Option to
purchase a maximum of 100 Units of each series as indicated above.
(3) Purchase Price. The Purchase Price (also referred to as the
"Exercise Price" or the "Strike Price") for each Unit and for each
series of Units, as of the actual date of the exercise of the
Option, shall be as shown on the attached Exhibit "B", which is
incorporated herein by this reference as if copied herein in full.
This Purchase Price as reflected in Exhibit "B" for each Unit
granted to Employee in this Employee Incentive Ownership Plan shall
not change.
(4) Expiration. All Options granted herein shall expire December 31,
2006. If Employee has not exercised all of the Options granted
herein by that date, any unexercised Options at that time will
expire and Employee will have no right to any Options of any type or
kind from and after that date.
(5) Exercise of Options. The Employee must give the Company at least
thirty (30) days notice of Employee's desire to exercise any of the
Employee's vested Options. This notice must be given to the Company
prior to November 1,2006. If the Employee gives such notice, the
Employee must either (1) pay to the Company an amount equal to the
price per Unit as shown in Exhibit "B", times the number of Units,
or (2) the Employee may notify the Company that he wishes to
exercise the Options under the Cashless Exercise Provisions outlined
below. The Employee may exercise the Option granted herein for all
or any part of the Units or series of Units granted to Employee in
this Employee Incentive Ownership Plan. After December 31, 2006,
Employee shall have no further Options of any type or kind. Employee
shall forfeit, waive and release any portion of Employee's Option
for Units not paid for or exercised by Employee by on or before
December 31, 2006. Employee may not exercise Employee's Option prior
to July 1, 2000, and may not exercise Employee's Option after
December 31, 2006. Employee may exercise this Option for all vested
Units of Employee, regardless of whether or not Employee is an
Employee of the Company.
(i) If the Employee wishes to exercise his Options
under the payment provisions, the Employee shall pay
all amounts due and payable to the Company within
sixty (60) days of Employee notifying the Company of
Employee's desire to exercise Employee's vested
(ii) If the Employee wishes to exercise his Options
under the Cashless Exercise Provisions, he shall
notify the Company in writing at least sixty (60)
days prior to the desired exercise date. The Cashless
Exercise date may occur only at the end of the annual
accounting year of the Company. Within fifteen (15)
days of receiving notice, the Company shall appoint
an independent appraiser who is an expert in the
valuation of wireless telecommunication businesses to
prepare an estimated value for the Company within
forty-five (45) days after his appointment. This
estimated value for the Company shall be the Company
Value. Such value shall not include any provisions
for a minority or marketability discount. If the
Employee does not agree with the Company appointed
appraiser's valuation of the business, he may hire,
at his own expense, a second independent appraiser
who is an expert in the valuation of wireless
telecommunication businesses to prepare a second
If the second valuation is within ten percent (10%)
of the valuation prepared by the Company's appointed
appraiser, the Company Value shall be the arithmetic
mean of the two (2) valuations.
If the two (2) valuations are not within ten percent
(10%) of each other, the Company and Employee will
appoint and split the cost of hiring a third
independent appraiser, who is an expert in the
valuation of wireless telecommunication businesses,
to prepare a third valuation.
If two (2) of the fair market values determined by
the appraisers are within ten percent (10%) of one
another, and the third value is not within ten
percent (10%) of the other fair market values, then
the Company Value will be the arithmetic mean of the
two (2) more closely aligned fair market values.
If none of the three (3) valuations are within ten
percent (10%) of each other, then the Company Value
will be the average of all three (3) valuations.
(iii) Using the Company Value estimated above, the
value of the Employee's Options shall be calculated.
The value of an Option shall be the value of the
Company, times the percent interest of the Company
represented by the Option, less the Exercise Price of
the Option. The percent interest of the Company
represented by the Option shall be determined as set
forth in Paragraph (1) above. The sum of all such
Option values shall be the Total Option Value.
(iv) In exchange for the Employee's Options, the
Company shall then issue to the Employee, Incentive
Units in the Company equal to the Total Option Value,
divided by the Company Value. These Incentive
Units shall be issued prorata among any Series of
Units to which Employee may be entitled at the time
of Employee's exercise of these Cashless Exercise
(6) Sale of Employer. Upon the sale of the Company or upon the sale
of substantially all of the assets of the Company, all vested Units
of Employee's Option shall be considered to be exercised. In such
event, Employee will receive, as the total proceeds for Employee's
Options granted herein, the difference in the sales price of the
Company, after deducting all debts to be paid by the Company,
computed on a per Unit price or the total sales price for
substantially all of the assets of the Company, after deducting all
debts to be paid by the Company, calculated on a per Unit price,
less the applicable purchase price per Unit, as of the date of the
sale, as shown on the attached Exhibit "B", times the number of
vested units granted to Employee. This difference to be paid to
Employee shall be paid by the Company to Employee within two (2)
weeks of closing the sale. If Employee has purchased any of
Employee's Units prior to such sale, the Employee shall receive that
portion of the sales proceeds attributable to those Units actually
purchased by Employee at the time of the sale, less a prorata
deduction for any debts to be paid by Employer attributable to those
Units. Employee agrees to sign any documents necessary to convey by
closing these Units free and clear of all claims or liens of any
type or kind. If Employee has purchased some Units by the time of
the closing but also is entitled to some additional vested Units
that Employee has not yet paid for, at the date of the sale,
Employee shall be entitled to the proceeds as described above, both
for Employee's purchased and vested but not yet purchased Units.
(7) Termination of Employment. If the Employee's employment is
terminated prior to October 31, 2001, for any reason, the Company
may purchase the Employee's vested Options and its applicable Units
by paying to Employee an amount equal to the fair market value of
each vested Unit, less the Purchase Price for each vested unit as
shown on the attached Exhibit "B", as of the date that the Company
actually purchases the vested Units of Employee. This right to
purchase by the Company expires on December 31, 2006, and if the
Company has not paid to Employee the amount described above by that
time, this right to purchase by the Company shall expire.
(8) Distributions. No distributions will be paid by the Company on
any Option or vested Units under this Employee Incentive Plan, until
such time as the Employee shall have actually purchased or acquired
the Employee's vested Units or upon the sale of Employer as set
forth in Paragraph (6) above.
3. EMPLOYEE BENEFITS. The Employee will be entitled to participate in 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 Company with comparable responsibilities, subject to the provisions of those programs. Without limiting the generalit
y of the foregoing, the Company will provide the Employee with basic health and medical benefits on the terms that such benefits are provided to other executives of the Company with comparable responsibilities. The Employee will also be entitled to a mini
m
um of two (2) 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.
(a) The Company will promptly reimburse the Employee, in accordance
with the Company'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.
(b) In addition to reimbursed expenses, Employee is entitled to
$400.00 per month for a vehicle allowance, plus 18 cents per mile
for all business related mileage.
(1) Business mileage does not include commuting from Employee's
residence to the Company's headquarters.
(2) Employee is responsible for proper substantiation and
reporting of business mileage and/or actual expenses.
(3) Employee acknowledges that the payment to him of a monthly
vehicle allowance plus the standard mileage rate may result in
taxable income if the business portion of actual automobile
expenses is less than the total amount paid to employee under
this subsection, or if employee does not maintain the records
required by the Internal Revenue Code and the Regulations
thereunder. Employee has been advised to consult a tax advisor to
determine the taxability of payments under this subsection, and
the record keeping requirements associated with the travel and
expenses associated with such payments.
5. TERMINATION. The Employee's employment by the Company: (a) shall terminate upon the Employee's death or disability (as defined below); (b) may be terminated by
the Company without cause at any time beginning on the first day of the thirteenth (13th) month after the Commencement Date; (c) may be terminated by the Company for cause (as defined below) at any time.
(a) The term "disability" means 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.
(b) The term "cause" means (i) the Employee's willful and continued
failure substantially to perform the Employee's duties with the
Company, (ii) any material breach of this Agreement by Employee
which is not cured within thirty (30) days after notice from the
Company thereof, (iii) commission of any act of fraud, embezzlement
or dishonesty by the Employee, (iv) any act or omission which
constitutes a breach of that certain Sprint PCS Management Agreement
dated July 17, 1998 ("the Sprint Agreement"); or (v) any other
intentional misconduct by the Employee adversely affecting the
business or affairs of the Company in a material manner. The term
"intentional misconduct by the Employee adversely affecting the
business or affairs of the Company" shall mean such misconduct that
is detrimental to the business or the reputation of the Company as
it is perceived both by the general public and the
telecommunications industry.
6. CONSEQUENCES OF TERMINATION.
(a) CONSEQUENCES OF TERMINATION FOR CAUSE. If the Employee's
employment is terminated for cause, (i) this Agreement terminates
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 date, the Company
shall be under no obligation to pay the Employee any compensation
(base salary or bonus) pursuant to this Agreement, and (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;
provided, however, that Employer shall have no obligation to make
any payments toward these benefits for Employee from and after
(b) CONSEQUENCES OF TERMINATION ON EMPLOYEE'S DEATH OR DISABILITY.
If the Employee's employment is terminated because of the Employee's
death or disability, (i) this Agreement terminates 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
bonus, to which the Employee may have been entitled on the last day
of employment, but had not yet received, and (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; provided,
however, that Employer shall have no obligation to make any payments
toward these benefits for Employee from and after termination.
(c) CONSEQUENCES OF TERMINATION FOR ANY REASON OTHER THAN FOR CAUSE
OR EMPLOYEE'S DEATH OR DISABILITY.
(1) If the Employee's employment is terminated, prior to October 31,
2001, for any reason other than for cause or Employee's death or
disability, (i) the Company will pay the Employee, in full
satisfaction of all of its compensation (base salary and ...
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