Exhibit 10.10
AIRGATE PCS, INC.
FORM OF EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into on July __, 1999 by
and between AirGate PCS , Inc., a Delaware corporation (the "Company"), and
___________________("Executive") for the period of four years through July 22,
2003.
RECITALS
A. Executive has been employed by the Company as the _____________________ for
the Company.
B. Executive currently beneficially owns an indirect interest in the capital
stock of the Company equal to _______.
C. The Company filed on May 24, 1999 a registration statement with the
Securities and Exchange Commission to undertake an initial public offering of
the capital stock of the Company that will reduce the Executive's current
ownership interest in the Company (the "IPO").
D. The Company and SprintCom, Inc. ("Sprint PCS") have entered into the Sprint
PCS Management Agreement (the "Management Agreement") dated July 22, 1998.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Management Agreement.
E. As an inducement to the Company entering into the Management Agreement,
Executive agreed to certain retention of ownership restrictions, restrictions on
other business interests (the "Primary Business Restriction") and certain
restrictions on her employment. Executive and the Company acknowledge that the
promises and restrictive covenants Executive is providing in this Agreement are
necessary to the Company's protection of its legitimate interests in connection
with the Management Agreement. Accordingly, Executive and the Company agree to
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements herein set forth, the parties hereto agree as follows:
1. Duties and Scope of Employment. The Company shall employ the Executive as
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______________for the Company reporting to the chief executive officer. The
Executive shall render such business and professional services in the
performance of his duties consistent with Executive's position within the
Company and as the Company's chief executive officer or Board of Directors may
reasonably request from time to time.
2. Employee Benefits. Executive shall be eligible for (i) all employee benefit
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plans and policies currently and hereafter maintained by the Company for its
employees of
comparable positions, subject to the terms and conditions of such plans and
policies, and (ii) such other employee benefits as are set forth in this
Agreement.
3. At-Will Employment. Executive and the Company understand and acknowledge
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that Executive's employment with the Company constitutes "at-will" employment.
Executive and the Company acknowledge that this employment relationship may be
terminated at any time, upon four weeks written notice to the other party (or
immediate notice if termination is for cause pursuant to Section 4(g)), with or
without cause or for any or no cause, at the option either of the Company or
Executive.
4. Compensation.
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(a) Base Salary. While employed by the Company pursuant to this Agreement, the
Company shall pay the Executive as compensation for his services a base salary
at the annualized rate of $120,000.00 (the "Base Salary"). Upon completion of
the IPO, Executive's salary will be adjusted to increase his Base Salary to
reflect market conditions and at a minimum to $________ . The Base Salary shall
be adjusted annually to increase the Executive's Base Salary by a minimum of the
greater of (i) the consumer price index; or (ii) 5%. Such salary shall be paid
periodically in accordance with normal Company payroll practices and subject to
the usual, required withholding and deductions. Executive understands and agrees
that neither his job performance nor promotions, commendations, bonuses or the
like from the Company give rise to or in any way serve as the basis for
modification, amendment, waiver, or extension, by implication or otherwise, of
this Agreement.
(b) Bonuses. In addition to Executive's Base Salary, Executive shall be
eligible to receive an annual bonus (the "Bonus") at a level generally
established in the industry for the Executive's position and in the target range
of 35% of Executive's Base Salary then in effect, as determined by the Board (in
its sole discretion) in consultation with Executive, and according to the terms
of any applicable Company executive bonus plans. The Bonus shall be payable in
accordance with the Company's normal practices and policies.
(c) Stock Option. Executive shall be eligible to participate in the Company's
stock option plan at the level established for the position held by the
Executive and in accordance with the Company's stock option plan, irrespective
of his ownership interest in the Company predating the date of this Agreement.
If the stock option plan is not adopted by the Company at the time of execution
of this Agreement, the Company agrees to award or cause to be awarded to the
Executive an option to purchase stock at a minimum a total number of ____ shares
as of the effective date of the stock option plan and pursuant to its terms that
apply to senior executives of the Company (subject to adjustment depending on
the number of shares issued in the IPO).
(d) Annual Benefits Program. Executive shall be eligible to participate in an
executive benefit/perquisite program as established by the Company at the level
of a senior executive and for a minimum aggregate annual benefit equal to $
10,000. In
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addition, Executive will be provided health, dental, disability and life
insurance for his and his family under Company policies.
(e) Termination of Employment. If the Company terminates the Executive's
employment, the Company shall continue until July 22, 2003 to pay the Executive
his Base Salary (with an annual adjustment equal to the greater of (i) the
consumer price index; or (ii) 5%) plus his average bonus as determined over the
course of this Agreement, or if no bonuses have been awarded, at a rate of 20%
of Executive's Base Salary (the "Salary Continuation") unless:
(i) Executive voluntarily terminates his employment with the
Company; or
(ii) the Company terminates the Executive or the Salary Continuation
for cause pursuant to Section 4(g) of this Agreement; or
(iii) the Primary Business Restriction expires, is eliminated or is
waived by Sprint PCS.
Notwithstanding the foregoing, if the Company terminates Executive's employment
without cause and the requirements of Section 4(e)(iii) are met, Executive shall
receive six months Base Salary at the rate in effect on the date of termination.
In addition, Executive shall be entitled to stock options to the extent provided
pursuant to the terms of the Company's stock option plan as an employee under
the stock option plan for the duration of the period of payment of Salary
Continuation. The Executive shall also continue to receive health, dental,
disability and life insurance under the Company's policies so long as the
Company continues to pay his Salary Continuation.
(f) Continued Employment Obligations. So long as the Company continues to pay
Salary Continuation, Executive agrees to perform such duties as the Company
reasonably requests from time to time, subject to the direction and control
of the Company. Therefore, notwithstanding Executive's termination of
employment with respect to the capacity in which Executive was then
serving. Executive shall continue in his status as an employee of the
Company so long as the Salary Continuation is paid.
(g) Termination for Cause. The Company may terminate Executive's employment or
the Salary Continuation for cause if the Executive is found to have
violated the requirements set forth in Section 8, Section 9(b) or Section
9(c) of this Agreement. If the Executive's employment or the Salary
Continuation is terminated pursuant to this Section 4(g), the Executive
shall not be entitled to any additional compensation or benefits
thereafter.
5. Expenses. The Company will pay or reimburse Executive for reasonable
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travel, entertainment or other expenses incurred by Executive in the furtherance
of or in connection with the performance of Executive's duties hereunder in
accordance with the Company's established policies.
6. Assignment. This Agreement shall be binding upon and inure to the benefit
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of (a) the heirs, executors and legal representatives of Executive upon
Executive's death or incapacity, and (b) any successor or assign of the Company.
Any such successor of the Company shall be deemed substituted for the Company
under the terms of this Agreement for all purposes. As used herein, "successor"
shall include any person, firm, corporation or other business entity which at
any time, whether by purchase, merger or
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otherwise, directly or indirectly acquires all or substantially all of the
assets of business of the Company. None of the rights of Executive to receive
any form of compensation payable pursuant to this Agreement shall be assignable
or transferable except through a testamentary disposition or by the laws of
descent and distribution upon the death of Executive. Any attempted assignment,
transfer, conveyance or other disposition (other than as aforesaid) of any
interest in the rights of Executive to receive any form of compensation
hereunder shall be null and void.
7. Notices. All notices, requests, demands and other communications called for
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hereunder shall be in writing and shall be deemed given if delivered personally
or via overnight delivery with proof of receipt or three (3) days after being
mailed by registered or certified mail, return receipt requested, prepaid and
addressed to the parties or their successors in interest at the following
addresses, or at such other addresses as the parties may designate by written
notice:
If to the Company:
AirGate PCS , Inc.
Harris Tower
233 Peachtree Street, N.E., Suite 1700
Atlanta, Georgia 30303
Attn: Board of Directors
If to Executive:
8. Ownership Interest Restrictions.
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(a) Retention of Ownership Interest. Pursuant to Section 13 of Addendum II
to the Management Agreement ("Addendum II"), Executive agrees that Executive
shall not sell, transfer (except as otherwise provided in subsection (b) below),
assign, gift or pledge any of Executive's equity or voting interest in any of
the entities listed in Schedule 13 to Addendum II ("Schedule 13") until July 22,
2003 except for those shares granted to Executive pursuant to the terms of the
Company's stock option plan and such other equity and voting interests that are
not within the scope of Addendum II and Schedule 13.
(b) Permitted Transfers. Notwithstanding the provisions of Section 8(a),
Executive shall be permitted to execute the following transfers:
(i) a transfer of a direct or indirect ownership interest in a Schedule
13 Company to Executive's spouse, child, adopted child, stepchild, grandchild,
parent or sibling, or to a trust established for the benefit of any of the
foregoing, provided that Executive retains control of the voting rights
associated with the ownership interest and remains bound by the terms of
Addendum II;
(ii) a transfer upon the death of Executive, provided that such transfer
is to one of the Principals named in Addendum II or to a person who agrees to be
bound by the
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requirements of Addendum II; or
(iii) a transfer of up to a maximum of thirty percent (30%) of
Executive's equity interest in the entities listed in Schedule 13 after July 22,
2001.
(c) Penalties for Invalid Transfers. Executive acknowledges that his failure
to comply with the ownership restrictions set forth in this Section 8 could be
treated as a material default of the Management Agreement by Sprint PCS and
result in irreparable harm to the Company. Executive agrees to maintain his
ownership interests in compliance with the requirements of this Agreement and
the Management Agreement and further agrees that any attempted transfer of his
ownership interests in violation of the requirements of this Agreement or the
Management Agreement shall be invalid and void and agrees that a legend to this
effect will be placed on any certificates or other evidence of such ownership
interests. Executive further agrees to indemnify and hold harmless the Company
and other shareholders of the Company from and against any and all liabilities,
damages, penalties, costs and expenses (including reasonable attorney's fees)
suffered or incurred by reason of Executive's noncompliance and breach of this
Section and and to release the Company for any claims relating to termination of
his employment or Salary Continuation pursuant to Section 4(g) of this
Agreement. Executive acknowledges that the foregoing indemnity could amount to
tens of millions of dollars. The foregoing indemnity shall not be the Company's
or other shareholders' exclusive remedy in the event of such noncompliance or
breach, such indemnity being cumulative and not in limitation of any and all
other remedies at law or in equity. Any penalty paid by the Executive to the
Company shall not release or waive any claims that the Company may have against
the Executive
9. Restrictions on Employment.
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(a) Use and Disclosure of Confidential Information. During the period of two
(2) years after Executive's employment has terminated for any reason whatsoever
(or, in the case of trade secrets, for so long as the information in question
remains a trade secret) and during any period Executive is employed by Employer,
Executive shall not, without the prior written consent of the Company, directly
or indirectly, divulge, disclose or publish to any person or entity, or
reproduce or use in any way, except only as required for the benefit of the
Company, any Confidential Information (as defined herein). Upon the Company's
request and, in any event, upon the termination of Executive's employment with
the Company for any reason whatsoever, Executive shall immediately return any
reproductions of Confidential Information to the Company. For purposes of this
Agreement, "Confidential Information" means any trade secrets and any
information relating to the Company's business that is competitively sensitive
and not generally known by the public, including processes, policies,
procedures, techniques, designs, drawings, know-how, show-how, technical
information, technology, specifications, products, computer programs (including
computer programs developed, improved or modified by Executive for or on behalf
of the Company for use in the Company's business), algorithms, systems, methods
of operation, order entry forms, price lists, customer lists, customer
information, solicitation leads, marketing research data, marketing and
advertising materials and methods and manuals and forms, all of which
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pertain to the Company's business. Confidential Information does not include any
information which (i) is available in published print or otherwise known to the
public, unless published or made known as a result of acts or omissions of
Executive, or (ii) is lawfully obtained by Executive in writing from a third
party who did not acquire such confidential information or trade secret,
directly or indirectly, from Executive or the Company.
(b) Primary Business Restriction. Pursuant to Section 14(a) of Addendum II,
Executive agrees that prior to July 22, 2003, unless the Primary Business
Restriction expires or is eliminated or waived by Sprint PCS, Executive shall
not have a primary business other than his involvement with the Company,
regardless of whether he is currently employed by the Company. Executive
acknowledges that his failure to comply with the ownership restrictions set
forth in this Section 9(b) could be treated as a material default of the
Management Agreement by Sprint PCS and result in irreparable harm to the
Company. Executive agrees to release the Company for any claims relating to
termination of his employment or Salary Continuation pursuant to Section 4(g) of
this Agreement. Executive acknowledges that the foregoing indemnity could amount
to tens of millions of dollars. The foregoing indemnity shall not be the
Company's or other shareholders' exclusive remedy in the event of such
noncompliance or breach, such indemnity being cumulative and not in limitation
of any and all other remedies at law or in equity.
(c) Covenant Not to Compete (the "Covenant Not to Compete"). In addition to the
requirements set forth in Section 9(b), during Executive's employment with the
Company and for a period of eighteen (18) months after Executive's employment is
terminated, Executive shall not, directly, indirectly, for himself or on behalf
of or in conjunction with any other person, firm or entity.
(i) engage in the wireless telecommunications business (the "Business")
anywhere within the Service Area as defined in Addendum 1 of the Management
Agreement (the "Territory").
(ii) initiate any action to solicit in competition with the Business of
the Company or to divert or attempt to divert from the Company the Business of
any person, firm or entity for which the Company provided services in connection
with the Business at any time during the period of twenty four (24) months
immediately preceding the time of such solicitation diversion or attempt to
divert and with whom Executive had material contact in the course of Executive's
employment with the Company; or
(iii) initiate any action to hire for any other employer any employee of
the Company cause any employee of the Company to leave his employment in order
to work for another.
Executive acknowledges that the Company has conducted and expects to conduct its
business throughout the Territory and that the Company expects that during the
aforesaid period, the Company will continue to expand its Business throughout
the Territory and that this expectation is realistic; that Executive shall be
engaged in the Company's business in his capacity with respect to the Company's
activities throughout the Territory;
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and that because of Executive's association with the Company, the Company's
business would be seriously and irreparably harmed if Executive were to compete
with the Company in the manner prohibited above.
(d) Change of Control. The restrictions set forth in Section 8 hereof
(entitled "Ownership Interest Restrictions"), and the obligation of Executive to
comply with the Primary Business Restriction (but not the restrictions set forth
in Section 9(a) and 9(c) hereof), shall lapse immediately if at least one-third
(1/3) of the persons who are corporate officers of Sprint and/or Sprint PCS
immediately before an Applicable Change of Control terminate their employment
for any reason within one year following an Applicable Change of Control. For
purposes of this Agreement, (i) "Change of Control" shall have the meaning set
forth in Section 17.15.3(e) of the Management Agreement, and (ii) "Applicable
Change of Control" shall mean a Change of Control of Sprint or Sprint PCS (other
than the Change of Control between Sprint Enterprises, L.P., TCI Telephony
Services, Inc., Comcast Telephony Services and Cox Telephony Partnership, Sprint
Spectrum L.P., SprintCom. Inc., PhillieCo Partners I, L.P., and Cox
Communications PCS, L.P.).
(e) Injunction; Attorneys' Fees; Setoff. As any breach by Executive of any
of the covenants contained in this Agreement would result in irreparable injury
to the Company, and as the damages arising out of any such breach would be
difficult to ascertain, Executive agrees that, in addition to all other remedies
provided by law or in equity, the Company shall be entitled to an injunction
against any such breach, whether actual or contemplated. If the Company takes
any action at law or in equity to enforce its rights under this Agreement, then
in addition to any other relief to which the Company may be entitled, the
Company shall be entitled to reasonable attorneys' fees, costs and necessary
expenses incurred in connection therewith. The Company shall be entitled to set
off against any compensation and other payments of any kind owed to Executive
any amounts owing to the Company as a result of a breach of this Agreement or
otherwise.
10. Termination. If the Company does not complete its financing, including but
not limited to, completion of the IPO, a high yield debt offering and closing of
a senior debt facility by September 30, 1999, or if the Management Agreement is
terminated by Sprint PCS, Executive (if Executive is not then in breach of this
Agreement) may terminate this Agreement.
11. Entire Agreement. This Agreement and the documents referenced herein
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represent the entire agreement and understanding between the Company and
Executive concerning the subject matter hereof, and supersede and replace any
and all prior agreements and understandings concerning such subject matter.
12. Arbitration and Equitable Relief.
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(a) To the extent permitted by applicable law, Executive agrees that any
dispute or controversy arising out of, relating to, or in connection with this
Agreement, or the
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interpretation, validity, construction, performance, breach or termination
thereof shall be settled by arbitration to be held in Fulton County, Georgia, in
accordance with the National Rules for the Resolution of Employment Disputes
then in effect of the American Arbitration Association (the "Rules"). The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's decision
in any court having jurisdiction.
(b) The arbitrator shall apply Georgia law to the merits of any dispute or
claim, without reference to rules of conflict of law. Executive hereby expressly
consents to the personal jurisdiction of the state and federal courts located in
Georgia for any action or proceeding arising from or relating to this Agreement
and/or relating to any arbitration in which the parties are participants.
(c) Executive understands that nothing in Section 12 modifies Executive's
at-will status. Subject to Section 3, either the Company or Executive can
terminate the employment relationship at any time, with or without cause.
(d) EXECUTIVE HAS READ AND UNDERSTANDS SECTION 12, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH, OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE
RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH
OF CONTRACT, BOTH EXPRESS OR IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND
FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF
EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR
INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND
DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR
MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS
ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, AND THE FAIR LABOR
STANDARDS ACT;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER
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LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
(e) Notwithstanding any provision herein to the contrary, this Section 12
shall not apply to any dispute or controversy arising under Section 9 (entitled
"Restrictions on Employment") or the interpretation, validity, construction,
performance, breach or termination thereof.
13. Severability. In the event that any provision hereof becomes or is
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declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
14. No Oral Modification, Cancellation or Discharge. This Agreement may only
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be amended, canceled or discharged in writing signed by Executive and the
Company.
15. Withholding. The Company shall be entitled to deduct or withhold, or
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cause to be deducted or withheld, from payment any amount of withholding taxes
or other amounts required by law with respect to payments made to Executive in
connection with his employment hereunder.
16. Governing Law. This Agreement shall be governed by the laws of the State
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of Georgia.
17. Acknowledgment. Executive acknowledges that he has had the opportunity to
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discuss this matter with and obtain advice from his private attorney, has had
sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement.
18. Gender. Wherever the context requires, the masculine or feminine gender
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shall include the other gender, and the singular shall include the plural and
vice versa.
[Execution on next page]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below.
COMPANY:
AIRGATE PCS, INC.
By: ______________________________________
Name/Title: ________________________________
Date: _____________________________________
EXECUTIVE:
__________________________________________
Date: _____________________________________
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