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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 4403 Brownfield Highway, Lubbock, Texas
79407 (the "Company"), and DAVID E. SHARBUTT, 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 Employee as
Chief Executive Officer ("CEO"). The term of the Employee's employment, pursuant
to this Agreement, will commence on October 1, 1999, (the "Commencement Date")
and will continue until September 30, 2002, or the termination of this Agreement
as described 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 be assigned to him from time to time by the Board of
Managers of the Company. Notwithstanding the foregoing, the Company acknowledges
that the Employee has other business interests and ownerships as well as serving
on the Boards of Directors of other companies in which the Employee is a
stockholder or owner. Subject to the provisions of Sections 7 through 10 hereof,
the Company acknowledges and consents to the continuation of these ownerships
and relationships, provided they do not interfere with the Employee's duties
under this Agreement. 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, or on
the Employee to remain in the employ of the Company or any of its subsidiaries.
2. COMPENSATION. In consideration of all services rendered by the Employee
as CEO 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 $175,000.00, payable periodically but no less often than
semi-monthly, in substantially equal amounts, in accordance with the
Company's payroll practices from time to time in effect. The Company will
EMPLOYMENT AGREEMENT PAGE 1 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 2
review the Employee's base salary at least once each year and may, in its
discretion, increase the Employee's base salary.
(b) BONUS. In addition to the Employee's base salary, the Employee shall be
eligible to receive a bonus (a "Quarterly Bonus") for each calendar quarter
in an amount, if any, determined as follows: In each calendar quarter,
beginning with the quarter ending December 31, 1999, Employee's Quarterly
Bonus shall be equal to the sum of (1) plus (2) as follows:
(1) $21,875.00 multiplied by the percentage set forth opposite each
Expected Milestone set forth in the attached EXHIBIT "A", incorporated
herein by reference, which is achieved for that calender quarter.
(2) $21,875.00 multiplied by the percentage set forth opposite each
Exceptional Milestone set forth in EXHIBIT "A" which is achieved for
that calendar quarter.
If any particular Expected Milestone or Exceptional Milestone is not
achieved for any calendar quarter, that percentage share of the dollar
amount specified in (1) or (2) above, as the case may be, shall not be
payable as part of the Quarterly Bonus. The Expected Milestones,
Exceptional Milestones and percentages set forth on EXHIBIT "A" may be
changed by the Company at any time and from time to time, but any such
change shall not apply earlier than the calendar quarter following the
calendar quarter in which such change is made by the Company and
communicated to the Employee.
Any Quarterly Bonus owing to the Employee shall be paid within forty-five
(45) days following the end of the applicable calendar quarter.
(c) UNIT OPTIONS. If, on June 30, 2000, the Company has not become a
wholly-owned subsidiary of Alamosa PCS Holdings, Inc., a Delaware
corporation ("Holdings"), then on said date the Company will convert the
membership interests in the Company to forty-eight million five hundred
thousand (48,500,000) membership units, and shall grant to the Employee
options to purchase membership units in the Company as follows:
(1) First Option. An option (the "First Option") to purchase two
hundred forty-two thousand five hundred (242,500) membership units in
the Company at a per unit purchase price equal to One Dollar and
Fifteen Cents ($1.15), said First Option to be fully vested and
immediately exercisable by the Employee, and thereafter be exercisable
at any time until January 5, 2009, in accordance with
EMPLOYMENT AGREEMENT PAGE 2 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 3
the option agreement to be entered into between the Company and the
Employee as of June 30, 2000, upon terms and conditions substantially
similar to the terms and conditions of the Nonqualified Stock Option
Agreement entered into by the Employee pursuant to the Alamosa PCS
Holdings, Inc. 1999 Long-Term Incentive Plan.
(2) Second Option. An option (the "Second Option") to purchase one
million four hundred fifty-five thousand (1,455,000) membership units
in the Company at a per unit purchase price equal to Fifteen Dollars
($15.00), said Second Option, subject to Section 6 hereof, to vest and
be exercisable by the Employee in three (3) equal installments of four
hundred eighty-five thousand (485,000) membership units each on
September 30, 2000, September 30, 2001, and September 30, 2002,
respectively, and thereafter be exercisable at any time until January
5, 2009, in accordance with the option agreement to be entered into
between the Company and the Employee as of June 30, 2000, upon terms
and conditions substantially similar to the terms and conditions of
the Nonqualified Stock Option Agreement entered into by the Employee
pursuant to the Alamosa PCS Holdings, Inc. 1999 Long-Term Incentive
Plan.
(d) LIFE INSURANCE. The Company will provide at least $5,000,000.00 term
life insurance on the life of the Employee during the term of the
Employee's employment. The Company shall pay for all costs attributable to
such coverage. Such life insurance shall be at least ten (10) year level
premium term life insurance on the life of the Employee. The Employee shall
have the right to designate the beneficiary of such policy or policies.
Should the Employee not be insurable at the time of his employment under
this Agreement, there will be no obligation upon the Company to provide
such life insurance. If the Employee's employment terminates during the
term of this Agreement or at the termination of the Employee's employment
pursuant to this Agreement, the Employee may assume the premium obligations
of this policy, in which event the Company shall assign all its rights in
the policy to the Employee. In the event the Employee desires to assume the
premium obligations under this policy and at the time of the Employee's
termination of employment the Company has prepaid any premiums on the
policy, the Employee shall pay to the Company the amount of any prepayment
attributable to any period of coverage after the Employee's termination of
employment.
The Employee will receive no additional compensation for serving the Company in
any other capacity, such as Chairman of the Board of Directors or any similar
position.
EMPLOYMENT AGREEMENT PAGE 3 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 4
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 generality 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 holidays, sick leave and vacation in
accordance with the Company's policies as they may change from time to time, but
in no event shall the Employee be entitled to less than four (4) weeks paid
vacation per year.
4. EXPENSES.
(a) Reimbursement for Expenses. 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, including
reimbursement for miles driven by the Employee in furtherance of the
Company's business ("Business Mileage").
(1) Reimbursement for Business Mileage shall be at the standard
mileage rate allowed by the Internal Revenue Service ("IRS") for the
taxable year and set forth in the appropriate IRS publication.
(2) Business mileage does not include commuting from Employee's
residence to the Company's headquarters.
(3) Employee is responsible for proper substantiation and reporting of
Business Mileage and/or actual expenses.
(4) 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.
EMPLOYMENT AGREEMENT PAGE 4 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 5
(b) Expense Allowance. In addition to reimbursed expenses, Employee is
entitled to $1,250.00 per month as a vehicle allowance and club dues
allowance.
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 for any reason other than cause or non-performance at
any time; (c) may be terminated by the Company for cause (as defined below) at
any time; (d) may be terminated by the Employee, without cause at any time upon
forty-five (45) days' prior written notice delivered by the Employee to the
Company; (e) may be terminated by the Employee for cause (as defined below) at
any time upon forty-five (45) days' prior written notice delivered by the
Employee to the Company; and (f) may be terminated by the Company for
non-performance by the Employee at any time.
(a) The term "disability" means the determination under the Company's
Long-Term Disability Plan that the Employee is eligible to receive a
disability benefit.
(b) The term "cause" in the event of termination of the Employee's
employment by the Company means (i) any breach of Sections 7 or 9 of this
Agreement by Employee which has a material adverse effect on the Company
and which is not or cannot be cured within thirty (30) days after notice
from the Board of Managers of the Company thereof; (ii) commission of any
act of fraud, embezzlement or dishonesty by the Employee that is materially
and demonstrably injurious to the Company; (iii) any act or omission by
Employee which constitutes a uncured default or breach of that certain
Sprint PCS Management Agreement dated July 17, 1998 and as it may be
amended from time to time or any other similar Sprint Management Agreement
to which the Company or any of its affiliates or subsidiaries may be a
party ("the Sprint Agreement"); or (iv) 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.
(c) The term "cause" in the event of termination of the Employee's
employment by the Employee means (i) the change in job responsibilities of
the Employee resulting in the demotion of the Employee from the position of
CEO, which demotion is caused by something other than would be cause for
termination of the Employee's employment by the Company for cause and other
than the non-performance of the Employee as defined later herein; or (ii)
the removal of the Employee from the Board of
EMPLOYMENT AGREEMENT PAGE 5 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 6
Managers of the Company or, if the Company is a wholly-owned subsidiary of
Holdings, the Board of Directors of Holdings or the failure of the Employee
to be re-elected to said Board of Managers or said Board of Directors, as
the case may be.
(d) The term "non-performance by the Employee" in the event of termination
of the Employee's employment by the Company means the determination by a
super-majority (greater than 75%) of the members of the Board of Managers
of the Company, in their sole and absolute discretion, that the Employee is
not performing his duties under this Agreement after the Board of Managers
of the Company has delivered to the Employee written notice which
specifically identifies the manner in which the Board believes he is not
performing his duties and which is not or cannot be cured within 15 days
after such written notice is delivered to the Employee.
6. CONSEQUENCES OF TERMINATION.
(a) CONSEQUENCES OF TERMINATION ON EMPLOYEE'S DEATH OR DISABILITY. If the
Employee's employment is terminated prior to September 30,2002, because of
the Employee's death or disability, (i) subject to Section 6(h) hereof,
this Agreement terminates immediately; (ii) Employee or his legal
representative or estate, as the case may be, shall be eligible to exercise
any options granted and vested pursuant to Section 2(c) hereof at the time
of such death or disability, plus, if such death or disability does not
occur on September 30 of a given year, a fractional portion of those
options which would have vested and become exercisable pursuant to Section
2(c) hereof on the September 30 immediately following such death or
disability based on a fraction whose numerator is the number of months
(including the month in which the date of death or disability occurs) since
the previous September 30 and whose denominator is twelve (12), in
accordance with the provisions of Section 2(c) hereof and the option
agreement referred to therein, and any other options granted to the
Employee shall be forfeited; (iii) the Company will pay the Employee, or
his legal representative or estate, as the case may be, in full
satisfaction of all of its compensation (base salary and bonus) obligations
under this Agreement, an amount equal to the sum of any base salary due to
the Employee through the last day of employment, plus any accrued bonus to
which the Employee may have been entitled on the last day of employment,
but had not yet been received; and (iv) 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.
EMPLOYMENT AGREEMENT PAGE 6 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 7
(b) CONSEQUENCES OF TERMINATION BY THE COMPANY FOR ANY REASON OTHER THAN
FOR CAUSE OR FOR NON-PERFORMANCE OF EMPLOYEE
(1) If the Employee's employment is terminated by the Company prior to
September 30, 2002, for any reason other than for cause or
non-performance of Employee, (i) subject to Section 6(h) hereof, this
Agreement terminates immediately; (ii) Employee or his legal
representative or estate, as the case may be, shall be eligible to
exercise any options granted but not exercised pursuant to Section
2(c) hereof, which options shall be deemed vested as of the date of
the Employee's termination of employment regardless of whether or not
they are in fact otherwise vested pursuant to Section 2(c) hereof on
said date, in accordance with the provisions of Section 2(c) hereof
and the option agreement referred to therein; (iii) the Company will
pay the Employee, in full satisfaction of all of its compensation
(base salary and bonus) obligations under this Agreement, an amount
equal to the sum of any base salary due to the Employee through the
last day of employment, plus any accrued bonus to which the Employee
may have been entitled on the last day of employment, but had not yet
been received; (iv) the Company will pay the Employee, within sixty
(60) days of such termination, a lump sum severance payment equal to
one (1) year's base salary as in effect at the date of employment
termination; and (v) 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; provided, however, that Employer shall have no obligation
to make any payments toward these benefits for Employee from and after
termination.
(2) Any payment pursuant to clause (b)(1)(iv) above (the "Termination
Payment"):
a. will be subject to offset for any advances, amounts
receivable, and loans, including accrued interest, outstanding on
the date of the employment termination; and
b. 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.
EMPLOYMENT AGREEMENT PAGE 7 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 8
(c) CONSEQUENCES OF TERMINATION FOR CAUSE BY THE COMPANY. If the
Employee's employment is terminated by the Company prior to
September 30, 2002,for cause, (i) subject to Section 6(h) hereof,
this Agreement terminates immediately; (ii) Employee shall not be
eligible to exercise and shall forfeit any options granted
(whether or not vested) pursuant to Section 2(c) hereof at the
time of such employment termination that have not already been
exercised by the Employee at the time of such employment
termination; (iii) the Company will pay the Employee, in full
satisfaction of all of its compensation (base salary and bonus)
obligations under this Agreement, an amount equal to the sum of
any base salary due to the Employee through the last day of
employment, plus any accrued bonus to which the Employee may have
been entitled on the last day of employment, but had not yet been
received; and(iv) 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.
(d) CONSEQUENCES OF TERMINATION BY THE EMPLOYEE FOR ANY REASON
OTHER THAN FOR CAUSE OR EMPLOYEE'S DEATH OR DISABILITY. If, upon
forty-five (45) days' prior written notice to the Company by the
Employee, the Employee's employment is terminated by the Employee
prior to September 30, 2002, for any reason other than for cause
or Employee's death or disability, (i) subject to Section 6(h)
hereof, this Agreement terminates immediately; (ii) Employee or
his legal representative or estate, as the case may be, shall be
eligible to exercise any options granted and vested, but not
exercised pursuant to Section 2(c) hereof at the time of such
employment termination, in accordance with the provisions of
Section 2(c) hereof and the option agreement referred to therein,
and any other options granted to the Employee shall be forfeited;
(iii) the Company will pay the Employee, in full satisfaction of
all of its compensation (base salary and bonus) obligations under
this Agreement, an amount equal to the sum of any base salary due
to the Employee through the last day of employment, plus any
accrued bonus to which the Employee may have been entitled on the
last day of employment, but had not yet been received; and (iv)
the Employee's benefits and rights under any Benefit Plan, other
than any basic health and medical benefit plan, shall be 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.
(e) CONSEQUENCES OF TERMINATION BY THE EMPLOYEE FOR CAUSE .
EMPLOYMENT AGREEMENT PAGE 8 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 9
(1) If, upon forty-five (45) days' prior written notice to
the Company by the Employee, the Employee's employment is
terminated by the Employee prior to September 30, 2002, for
cause (i) subject to Section 6(h) hereof, this Agreement
terminates immediately; (ii) Employee or his legal
representative or estate, as the case may be, shall be
eligible to exercise any options granted and vested pursuant
to Section 2(c) hereof at the time of such employment
termination, plus, if such employment termination does not
occur on September 30 of a given year, those options which
would have vested and become exercisable pursuant to Section
2(c) hereof on the September 30 immediately following such
employment termination, in accordance with the provisions of
Section 2(c) hereof and the option agreement referred to
therein, and any other options granted to the Employee shall
be forfeited; (iii) the Company will pay the Employee, in
full satisfaction of all of its compensation (base salary
and bonus) obligations under this Agreement, an amount equal
to the sum of any base salary due to the Employee through
the last day of employment, plus any accrued bonus to which
the Employee may have been entitled on the last day of
employment, but had not yet been received; (iv) the Company
will pay the Employee, within sixty (60) days of such
termination, a lump sum severance payment equal to one (1)
year's base salary as in effect at the date of employment
termination or the unpaid balance of the annual base salary
which would have been payable to Employee through September
30, 2002, whichever amount shall be less; and (v) 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; provided, however, that Employer shall have no
obligation to make any payments toward these benefits for
Employee from and after termination.
(2) Any payment pursuant to clause (e)(1)(iv) above (the
"Termination Payment"):
a. will be subject to offset for any advances, amounts
receivable, and loans, including accrued interest,
outstanding on the date of the employment termination;
and
b. 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.
EMPLOYMENT AGREEMENT PAGE 9 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 10
(f) CONSEQUENCES OF TERMINATION BY THE COMPANY FOR
NON-PERFORMANCE BY THE EMPLOYEE. If the Employee's employment is
terminated by the Company prior to September 30, 2002, for
non-performance by the Employee (i) subject to Section 6(h)
hereof, this Agreement terminates immediately; (ii) Employee or
his legal representative or estate, as the case may be, shall be
eligible to exercise any options granted and vested but not
exercised pursuant to Section 2(c) hereof at the time of such
employment termination, in accordance with the provisions of
Section 2(c) hereof and the option agreement referred to therein,
and any other options granted to the Employee shall be forfeited;
(iii) the Company will pay the Employee, in full satisfaction of
all of its compensation (base salary and bonus) obligations under
this Agreement, an amount equal to the sum of any base salary due
to the Employee through the last day of employment, plus any
accrued bonus to which the Employee may have been entitled on the
last day of employment, but had not yet been received; and (iv)
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;
provided, however, that Employer shall have no obligation to make
any payments toward these benefits for Employee from and after
termination.
EMPLOYMENT AGREEMENT PAGE 10 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 11
(g) CONSEQUENCES OF TERMINATION BY THE COMPANY FOLLOWING A CHANGE
OF CONTROL.
(1) If the Employee's employment is terminated by the
Company prior to September 30, 2002, for any reason other
than for cause (as defined in Section 5(b) hereof) within
one (1) year following a Change of Control, (i) subject to
Section 6(h) hereof, this Agreement terminates immediately;
(ii) Employee or his legal representative or estate, as the
case may be, shall be eligible to exercise any options
granted but not exercised pursuant to Section 2(c) hereof
which options shall be deemed vested as of the date of the
Employee's termination of employment regardless of whether
or not they are in fact otherwise vested pursuant to Section
2(c) hereof on said date, in accordance with the provisions
of Section 2(c) hereof and the option agreement referred to
therein; (iii) the Company will pay the Employee, in full
satisfaction of all of its compensation (base salary and
bonus) obligations under this Agreement, an amount equal to
the sum of any base salary due to the Employee through the
last day of employment, plus any accrued bonus to which the
Employee may have been entitled on the last day of
employment, but had not yet been received; (iv) the Company
will pay the Employee, within sixty (60) days of such
termination, a lump sum severance payment equal to the
unpaid balance of the base salary which would have been
payable to Employee through September 30, 2002; and (v) 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; provided, however, that Employer shall have no
obligation to make any payments toward these benefits for
Employee from and after termination.
(2) The term "Change of Control" shall have the same meaning
as defined in the Alamosa PCS Holdings, Inc. 1999 Long-Term
Incentive Plan.
(3) Any payment pursuant to clause (g)(1)(iv) above (the
"Termination Payment"):
a. will be subject to offset for any advances, amounts
receivable, and loans, including accrued interest
outstanding on the date of the employment termination;
and
b. will not be subject to offset on account of any
remuneration paid or payable to the Employee for any
EMPLOYMENT AGREEMENT PAGE 11 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 12
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.
(h) PRESERVATION OF CERTAIN PROVISIONS. Notwithstanding any
provisions of this Agreement to the contrary, the provisions of
Sections 7 through 12 hereof shall survive the expiration or
termination of this Agreement as necessary to give full effect to
all of the provisions of this Agreement.
7. NON-COMPETITION BY EMPLOYEE. During the term of this Agreement, the
Employee shall not, directly or indirectly, either as an Employee, Employer,
Consultant, Agent, Principal, Partner, Corporate Officer, Director, Shareholder,
Member, Investor or in any other individual or representative capacity, engage
or participate in any business that is in competition in any manner whatever
with the business of the Company. For these purposes, the business of the
Company is establishing and providing mobile wireless communications services
(the "Business"), including all aspects of the Business, within the Service Area
as that term is defined in the Schedule of Definitions referred to in and
incorporated by reference into the Sprint Agreement. Furthermore, upon the
expiration of this Agreement or the termination of this Agreement prior to
September 30, 2002, for any reason, the Employee expressly agrees not to engage
or participate, directly or indirectly, either as an Employee, Employer,
Consultant, Agent, Principal, Partner, Stockholder, Corporate Officer, Director,
Shareholder, Member, Investor or in any other individual or representative
capacity, for a period of two (2) years in any business that is in competition
with the Business and that is located within and/or doing business within the
Service Area as defined above as in existence during the term of the Employee's
employment with the Company. The parties agree that the Company has a legitimate
interest in protecting the Business and goodwill of the Company that has
developed in the areas of the Company's Business and in the geographical areas
of this Covenant Not To Compete as a result of the operations of the Company.
The parties agree that the Company is entitled to protection of its interests in
these areas. The parties further agree that the limitations as to time,
geographical area, and scope of activity to be restrained do not impose a
greater restraint upon Employee than is necessary to protect the goodwill or
other business interest of the Company. The parties further agree that in the
event of a violation of this Covenant Not To Compete, that the Company shall be
entitled to the recovery of damages from Employee and/or an injunction against
Employee for the breach or violation or continued breach or violation of this
Covenant. The Employee agrees that if a court of competent jurisdiction
determines that the length of time or any other restriction, or portion thereof,
set forth in this Section 7 is overly restrictive and unenforceable, the court
may reduce or modify such restrictions to those which it deems reasonable and
enforceable under the circumstances, and as so reduced or modified, the parties
hereto agree that the restrictions of this Section 7 shall remain in full force
EMPLOYMENT AGREEMENT PAGE 12 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 13
and effect. The Employee further agrees that if a court of competent
jurisdiction determines that any provision of this Section 7 is invalid or
against public policy, the remaining provisions of this Section 7 and the
remainder of this Agreement shall not be affected thereby, and shall remain in
full force and effect.
8. EXCEPTIONS TO NON-COMPETITION COVENANTS. Notwithstanding anything herein
to the contrary or apparently to the contrary, the following shall not be a
violation or breach of the non-competition covenants contained in this
Agreement. Employee may invest in the securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if (a) such
securities are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Securities Exchange Act of 1934 and
(b) the Employee does not beneficially own (as defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) in excess of 5% of the outstanding
capital stock of such enterprise. In addition, the employment of Employee by CHR
Solutions, Inc. ("CHR"), successor to Hicks & Ragland Engineering Co. Inc. or
any company or entity into which CHR may be merged or converted shall so long as
CHR or any such company into which CHR may be merged or converted is not in
competition with the Business also be an exception to the non-competition
covenants. Employee's investment in any company or entity in which Employer is
an owner or stockholder at the time of entering into this Agreement shall also
be an exception to the non-competition covenants. The names of these companies
or entities are shown on the attached Exhibit B, which is incorporated herein by
this reference as if copied at length. Notwithstanding the foregoing, the
Employee's relationship with other entities or business interests of Employee
shall in no way interfere with or detract from the duties of the Employee to the
Company as called for in this Agreement.
9. CONFIDENTIAL INFORMATION. The Employee recognizes and acknowledges that
he will have access to certain information of members of the Company Group (as
defined below) and that such information is confidential and constitutes
valuable, special and unique property of such members of the Company Group. The
parties agree that the Company has a legitimate interest in protecting the
Confidential Information, as defined below. The parties agree that the Company
is entitled to protection of its interests in the Confidential Information. The
Employee shall not at any time, either during or subsequent to the term of this
Agreement, disclose to others, use, copy or permit to be copied, except in
pursuance of his duties for an on behalf of the Company, it successors, assigns
or nominees, any Confidential Information of any member of the Company Group
(regardless of whether developed by the Employee) without the prior written
consent of the Company. Employee acknowledges that the use or disclosure of the
Confidential Information to anyone or any third party could cause monetary loss
and damages to the Company. The parties further agree that in the event of a
violation of this covenant against non-use and non-disclosure of Confidential
Information, that the Company shall be entitled to a recovery of damages from
Employee and/or an injunction against Employee for the breach or violation or
continued breach or violation of this covenant.
EMPLOYMENT AGREEMENT PAGE 13 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 14
As used herein, "Company Group" means the Company, and any entity that
directly or indirectly controls, is controlled by, or is under common control
with, the Company, and for purposes of this definition "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise.
The term "Confidential Information" with respect to any person means any
secret or confidential information or know-how and shall include, but shall not
be limited to, the plans, financial and operating information, customers,
supplier arrangements, contracts, costs, prices, uses, and applications of
products and services, results of investigations, studies or experiments owned
or used by such person, and all apparatus, products, processes, compositions,
samples, formulas, computer programs, computer hardware designs, computer
firmware designs, and servicing, marketing or manufacturing methods and
techniques at any time used, developed, investigated, made or sold by such
person, before or during the term of this Agreement, that are not readily
available to the public or that are maintained as confidential by such person.
The Employee shall maintain in confidence any Confidential Information of third
parties received as a result of his employment with the Company in accordance
with the Company's obligations to such third parties and the policies
established by the Company.
10. DELIVERY OF DOCUMENTS UPON TERMINATION. The Employee shall deliver to
the Company or its designee at the termination of his employment all
correspondence, memoranda, notes, records, drawings, sketches, plans, customer
lists, product compositions, and other documents and all copies thereof, made,
composed or received by the Employee, solely or jointly with others, that are in
the Employee's possession, custody, or control at termination and that are
related in any manner to the past, present, or anticipated business or any
member of the Company Group. In this regard, the Employee hereby grants and
conveys to the Company all right, title and interest in and to, including
without limitation, the right to possess, print, copy, and sell or otherwise
dispose of, any reports, records, papers, summaries, photographs, drawings or
other documents, and writings, and copies, abstracts or summaries thereof, that
may be prepared by the Employee or under his direction or that may come into his
possession in any way during the term of his employment with the Company that
relate in any manner to the past, present or anticipated business of any member
of the Company Group.
11. DISPUTES. The Company and Employee agree to the following in regard to
any disputes between them arising under any of the provisions of this Agreement
other than the provisions of Sections 7 through 10 hereof. Nothing in this
Section 11 applies to or governs disputes arising under Sections 7 through 10 of
this Agreement.
EMPLOYMENT AGREEMENT PAGE 14 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 15
(a) MEDIATION. The Company and Employee agree to mediate any dispute
arising under the applicable provisions of this Agreement. In the
event of any such dispute, the parties, within thirty (30) days of a
written request for mediation, shall attend, in good faith, a
mediation in order to make a good faith reasonable effort to resolve
such dispute arising under this Agreement. The parties shall attempt,
in good faith, to agree to a mediator. If unable to so agree, the
parties, in that event, will move to arbitration as provided in this
Agreement and there will be no mediation. If this good faith mediation
effort fails to resolve any dispute arising under this Agreement, the
Company and Employee agree to arbitrate any dispute arising under this
Agreement. This arbitration shall occur only after the mediation
process described herein.
(b) ARBITRATION. The Company and Employee agree, as concluded by the
parties to this Agreement on the advice of their counsel, and as
evidenced by the signatures of the parties and of their respective
attorneys, that all questions as to rights and obligations arising
under the terms of this Agreement are subject to arbitration and such
arbitration shall be governed by the provisions of the Texas General
Arbitration Act (Texas Civil Practice and Remedies Code Section
171.001 et seq as it may be amended from time to time).
(c) DEMAND FOR ARBITRATION. If a dispute should arise under this
Agreement, either party may within thirty (30) days make a demand for
arbitration by filing a demand in writing with the other.
(d) APPOINTMENT OF ARBITRATORS. The parties to this Agreement may
agree on one arbitrator, but in the event that they cannot so agree,
there shall be three arbitrators, one named in writing by each of the
parties within thirty (30) days after demand for arbitration is made,
and a third to be chosen by the two so named. The arbitrators among
themselves shall appoint a presiding arbitrator. Should either party
fail to timely join in the appointment of the arbitrators, the
arbitrators shall be appointed in accordance with the provisions of
Texas Civil Practice and Remedies Code Section 171.041.
(e) HEARING. All arbitration hearings conducted under the terms of
this Agreement, and all judicial proceedings to enforce any of the
provisions of this Agreement, shall take place in Lubbock County,
Texas. The hearing before the arbitrators of the matter to be
arbitrated shall be at the time and place within that County selected
by the arbitrators or if deemed by the arbitrators to be more
convenient for the parties or more economically feasible, may be
conducted in any city within the Service Area as referred to in
Section 7 hereof or within the State of Texas.
EMPLOYMENT AGREEMENT PAGE 15 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 16
(f) ARBITRATION AWARD. If there is only one arbitrator, his or her
decision shall be binding and conclusive. The submission of a dispute
to the arbitrators and the rendering of their decision shall be a
condition precedent to any right of legal action on the dispute. A
judgment confirming the award of the arbitrators may be rendered by
any court having jurisdiction; or the court may vacate, modify, or
correct the award in accordance with the provisions of the Texas
General Arbitration Act (Texas Civil Practice and Remedies Code ss.
171.087 et seq as it may be amended from time to time).
(g) COSTS OF ARBITRATION. The costs and expenses of arbitration,
including the fees of the arbitrators but excluding any attorneys'
fees, shall be advanced by the Company, but will ultimately be borne
by the losing party or in such proportions as the arbitrators shall
determine.
(h) CONDUCT OF ARBITRATION. Any arbitration brought under the terms of
this Agreement shall be conducted in the following manner:
(1) Time Limitations. The parties agree that the following time
limitations shall govern the arbitration proceedings conducted
under the terms of this Agreement:
(a) Any demand for arbitration must be filed within thirty
(30) days of the date the mediation is deemed unsuccessful,
or thirty (30) days after the date of the written request
for mediation, whichever is later.
(b) Each party must select an arbitrator within thirty (30)
days of receipt of notice that an arbitration proceeding has
commenced. In the event that no such selection is made, the
arbitrator selected by the other party may conduct the
arbitration proceeding without selecting any other
arbitrator.
(c) The hearing must be held within sixty (60) days of the
date on which the third arbitrator is selected.
(d) Hearing briefs must be submitted no later than ten (10)
days after the hearing.
(e) The arbitration award must be made within thirty (30)
days of the receipt of hearing briefs.
EMPLOYMENT AGREEMENT PAGE 16 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 17
(2) Discovery in Arbitration Proceedings. The parties agree that
discovery may be conducted in the course of the arbitration
proceeding in accordance with the following provisions:
(a) Each party may notice no more than three (3) depositions
in total, including both witnesses adherent to the adverse
party and third-party witnesses.
(b) Each party may serve no more than twenty-five (25)
requests for admission on the other party. No requests may
be served within ten (10) days of the date of hearing,
unless the parties otherwise stipulate. All requests for
admission shall be responded to within ten (10) days of
service of the requests, unless the parties otherwise
stipulate.
(c) Each party may serve no more than fifty (50)
interrogatories on the other party. No interrogatory shall
contain subparts, or concern more than one topic or subject
of inquiry. Interrogatories may not be phrased so as to
circumvent the effect of this clause. No interrogatories may
be served within ten (10) days of the date of hearing,
unless the parties otherwise stipulate. All interrogatories
shall be responded to within ten (10) days of service of the
interrogatories, unless the parties otherwise stipulate.
(d) Each party may serve no more than ten (10) requests for
production of documents on the other party. No request for
production of documents shall contain subparts, or seek more
than one type of document. Requests for production of
documents may not be phrased so as to circumvent the effect
of this clause. Unless the parties otherwise stipulate,
requests for production of documents may not be served
within ten (10) day of the date of hearing, and all requests
for production of documents shall be responded to within ten
(10) days of service of the requests.
(e) If any party contends that the other party has served
discovery requests in a manner not permitted by this
Section, or that the other party's response to a discovery
request is unsatisfactory, the party may request the
presiding arbitrator to resolve such discovery disputes. The
presiding arbitrator shall prescribe the procedure by which
such disputes are resolved. Any discovery dispute may be
handled by telephone conference among the parties and the
presiding arbitrator.
EMPLOYMENT AGREEMENT PAGE 17 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 18
12. SUCCESSORS; BINDING AGREEMENT; ASSIGNMENT. The Company shall 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 Company
to expressly assume and agree in writing to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place, provided that the Employee must be given
the position as the Chief Executive Officer ("CEO") with the same authority,
powers and responsibilities set forth in Section 1 hereof with respect to the
subsidiary or subdivision which operates the business of the Company as it
exists on the date of such business combination. Failure of the Company 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 Company in the same amount and on
the same terms to which the Employee would be entitled hereunder if the Company
terminated the Employee's employment without Cause, except that all options will
be immediately vested. 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, "Company" shall mean the Company 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 Company may not assign this Agreement, (i) except in connection
with, and to the acquiror of, all or substantially all of the business or assets
of the Company, provided such acquiror expressly assumes and agrees in writing
to perform this Agreement as provided in this Section, and (ii) except in
connection with the Company becoming a wholly-owned subsidiary of Holdings, in
which event the Company may assign this Agreement and all of the Company's
rights and obligations hereunder to Holdings. The Employee may not assign his
rights or delegate his duties or obligations under this Agreement.
13. NOTICE. Any notices or other communications required or permitted to 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:
If to the Company: Alamosa PCS LLC
4403 Brownfield Highway
Lubbock, Texas 79407
Attn: David E. Sharbutt, Chairman
EMPLOYMENT AGREEMENT PAGE 18 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 19
With Copy to: Jack McCutchin, Jr.
Crenshaw, Dupree & Milam, L.L.P.
P. O. Box 1499
Lubbock, Texas 79408-1499
If to the Employee: David E. Sharbutt
4606 91st Street
Lubbock, Texas 79424
With Copy to: Bill Harriger
Murchison Hund & Harriger, L.L.P.
Post Office Box 54390
Lubbock, Texas 79453-4390
14. MISCELLANEOUS.
(a) SEVERABILITY. If any provision of this Agreement shall be 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 provisions of this
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 Managers of the
Company 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) INVALID PROVISIONS. Should any portion of this Agreement be
adjudged or held to be invalid, unenforceable or void, such holding
shall not have the effect of invalidating or voiding the remainder of
this Agreement and the parties hereby agree that the portion so held
invalid, unenforceable or void shall, if possible, be deemed amended
or reduced in scope, or otherwise be stricken from this Agreement to
the extent required for the purposes of validity and enforcement
thereof.
EMPLOYMENT AGREEMENT PAGE 19 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 20
(d) ENTIRE AGREEMENT. This Agreement and the Exhibits attached 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 Company with respect to the
subject matter hereof.
(e) SECTION HEADINGS FOR CONVENIENCE ONLY. The section headings 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 in
counterparts, all of which shall be considered one and the same
instrument.
(g) GOVERNING LAW AND PERFORMANCE. This Agreement shall be governed by
the laws of the State of Texas and shall be deemed to be executed in
and performance called for in Lubbock, Lubbock County, Texas, or at
the Company's sole option, by the laws of the state or states where
this Agreement may be at issue in any litigation involving the
Company.
DATED this 18th day of January, 2000, to be effective October 1, 1999.
COMPANY
ALAMOSA PCS LLC
By: /s/ SCOTTY HART
-------------------------------------
Name: Scotty Hart
-------------------------------------
Title: Director, by authority of the
Board of Directors
-------------------------------------
EMPLOYEE
/s/ DAVID E. SHARBUTT
---------------------------------------
DAVID E. SHARBUTT
EMPLOYMENT AGREEMENT PAGE 20 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
<PAGE> 21
Approved as to the mediation and arbitration provisions in Paragraph 12 above.
CRENSHAW, DUPREE & MILAM, L.L.P.
By: /s/ JACK McCUTCHIN, JR.
------------------------------------
JACK McCUTCHIN, JR.
Attorneys for Alamosa PCS LLC
/s/ BILL HARRIGER
---------------------------------------
BILL HARRIGER
Attorney for Employee
Attachment: Exhibit "A" - The Minimum, Expected and Exceptional Milestones
for the Third Quarter and Fourth Quarter of 1999 as adopted by
the Board of Managers of the Company
Exhibit "B" - List of Companies or Entities Excepted from
Covenants
EMPLOYMENT AGREEMENT PAGE 21 OF 22
ALAMOSA PCS LLC and David E. Sharbutt
EX-10.21
11
EMPLOYMENT AGREEMENT-KENDALL COWAN
<PAGE> 1
EXHIBIT 10.21
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 4403 Brownfield Highway, Lubbock, Texas
79407 (the "Company"), and KENDALL COWAN, an individual residing at 8402
Vicksburg, 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 Employee as
Chief Financial Officer ("CFO"). The term of the Employee's employment, pursuant
to this Agreement, will commence on December 1, 1999, (the "Commencement Date")
and will continue until November 30, 2004, or the termination of this Agreement
as described in Section 6 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 be assigned to him from time to time by the Board of
Managers of the Company and/or the Chief Executive Officer ("CEO") of the
Company. The CFO shall report to the CEO of the Company. Notwithstanding the
foregoing, the Company acknowledges that the Employee has other business
interests and ownerships as well as serving on the Boards of Directors of other
companies in which the Employee is a stockholder or owner. Subject to the
provisions of Sections 8 through 11 hereof, the Company acknowledges and
consents to the continuation of these ownerships and relationships, provided
they do not interfere with the Employee's duties under this Agreement.
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, or on the Employee to remain in
the employ of the Company or any of its subsidiaries.
2. COMPENSATION. In consideration of all services rendered by the
Employee as CFO 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 $150,000.00, payable periodically
but no less often than semi-monthly, in substantially equal
amounts, in accordance with the
Employment Agreement PAGE 1 OF 21
Alamosa PCS LLC and Kendall Cowan
<PAGE> 2
Company's payroll practices from time to time in effect. The
Company will review the Employee's base salary at least once
each year and may, in its discretion, increase the Employee's
base salary.
(b) BONUS. In addition to the Employee's base salary, the
Employee shall be eligible to receive a bonus (a "Quarterly
Bonus") for each calendar quarter in an amount, if any,
determined as follows: In each calendar quarter, beginning
with the quarter ending December 31, 1999, Employee's
Quarterly Bonus shall be equal to the sum of (1) plus (2) as
follows:
(1) $18,750.00 multiplied by the
percentage set forth opposite each Expected Milestone
set forth in the attached EXHIBIT "A", incorporated
herein by reference, which is achieved for that
calender quarter.
(2) $18,750.00 multiplied by the percentage set forth
opposite each Exceptional Milestone set forth in
EXHIBIT "A" which is achieved for that calendar
quarter.
If any particular Expected Milestone or Exceptional Milestone
is not achieved for any calendar quarter, that percentage
share of the dollar amount specified in (1) or (2) above, as
the case may be, shall not be payable as part of the Quarterly
Bonus. The Expected Milestones, Exceptional Milestones and
percentages set forth on EXHIBIT "A" may be changed by the
Company at any time and from time to time, but any such change
shall not apply earlier than the calendar quarter following
the calendar quarter in which such change is made by the
Company and communicated to the Employee.
Any Quarterly Bonus owing to the Employee shall be paid within
forty-five (45) days following the end of the applicable
calendar quarter.
(c) UNIT OPTIONS. If, on June 30, 2000, the Company has not
become a wholly-owned subsidiary of Alamosa PCS Holdings,
Inc., a Delaware corporation ("Holdings"), then on said date
the Company will convert the membership interests in the
Company to forty-eight million five hundred thousand
(48,500,000) membership units, and shall grant to the Employee
options to purchase membership units in the Company as
follows:
(1) Option. An option (the "Option") to purchase one
million four hundred fifty-five thousand (1,455,000)
membership units in the Company at a per unit
purchase price equal to Fifteen Dollars ($15.00),
said Option, subject to Section 7 hereof, to vest and
be
Employment Agreement PAGE 2 OF 21
Alamosa PCS LLC and Kendall Cowan
<PAGE> 3
exercisable by the Employee in five (5) equal
installments of two hundred ninety-one thousand
(291,000) membership units each on November 30, 2000,
November 30, 2001, November 30, 2002, November 30,
2003, and November 30, 2004, respectively, and
thereafter be exercisable at any time until January
5, 2009, in accordance with the option agreement to
be entered into between the Company and the Employee
as of July 31, 2000, upon terms and conditions
substantially similar to the terms and conditions of
the Nonqualified Stock Option Agreement entered into
by the Employee pursuant to the Alamosa PCS Holdings,
Inc. 1999 Long-Term Incentive Plan.
The Employee will receive no additional compensation for serving the Company in
any other capacity.
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 generality 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 holidays, sick leave and vacation in
accordance with the Company's policies as they may change from time to time, but
in no event shall the Employee be entitled to less than four (4) weeks paid
vacation per year.
4. ADDITIONAL BENEFITS FOR EMPLOYEE. The Employee is a licensed
Certified Public Accountant. The Company acknowledges that it would be in the
best interest of the Company for the Employee to maintain such license. As
additional benefits to the Employee under this Agreement related to such
license, the Company agrees to either pay directly or reimburse the Employee
during the term of this Agreement for each of the following:
(a) Continuing Professional Education (CPE). The Employee is
required to maintain CPE classes. The Company will pay or
reimburse the costs of such classes sufficient for Employee to
maintain his license, but such payment shall be limited to the
cost of such classes (i.e. tuition and books) and the direct
costs associated with such classes, such as travel to and from
and housing, including hotel and meals for the Employee only.
Employment Agreement PAGE 3 OF 21
Alamosa PCS LLC and Kendall Cowan
<PAGE> 4
(b) Dues and Licenses. The Company will pay or reimburse the
Employee for all professional dues and licenses attributable
to the Employee's license, including but not limited to the
following:
(1) Texas Society of CPAs;
(2) American Institute of CPAs; and
(3) Annual License Fees, Texas State Board of
Accountancy.
5. EXPENSES.
(a) Reimbursement for Expenses. 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, including
reimbursement for miles driven by the Employee in furtherance
of the Company's business ("Business Mileage").
(1) Reimbursement for Business Mileage shall be at
the standard mileage rate allowed by the Internal
Revenue Service ("IRS") for the taxable year and set
forth in the appropriate IRS publication.
(2) Business mileage does not include commuting from
Employee's residence to the Company's headquarters.
(3) Employee is responsible for proper substantiation
and reporting of Business Mileage and/or actual
expenses.
(4) 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.
(b) Expense Allowance. In addition to reimbursed expenses,
Employee is entitled to $600.00 per month as a vehicle
allowance.
6. 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 for any reason other than cause or nonperformance at
any
Employment Agreement PAGE 4 OF 21
Alamosa PCS LLC and Kendall Cowan
<PAGE> 5
time; (c) may be terminated by the Company for cause (as defined below) at any
time; (d) may be terminated by the Employee, without cause at any time upon
forty-five (45) days' prior written notice delivered by the Employee to the
Company; (e) may be terminated by the Employee for cause (as defined below) at
any time upon forty-five (45) days' prior written notice delivered by the
Employee to the Company; and (f) may be terminated by the Company for
non-performance by the Employee at any time.
(a) The term "disability" means the determination under the
Company's Long-Term Disability Plan that the Employee is
eligible to receive a disability benefit.
(b) The term "cause" in the event of termination of the
Employee's employment by the Company means (i) any breach of
Sections 8 or 10 of this Agreement by Employee which has a
materially adverse effect on the Company and which is not or
cannot be cured within thirty (30) days after notice from the
CEO or the Board of Managers of the Company thereof; (ii)
commission of any act of fraud, embezzlement or dishonesty by
the Employee that is materially and demonstrably injurious to
the Company; (iii) any act or omission by Employee which
constitutes a uncured default or breach of that certain Sprint
PCS Management Agreement dated July 17, 1998 and as it may be
amended from time to time or any other similar Sprint
Management Agreement to which the Company or any of its
affiliates or subsidiaries may be a party ("the Sprint
Agreement"); or (iv) 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.
(c) The term "cause" in the event of termination of the
Employee's employment by the Employee means (i) a dispute
between the Company and the Employee over accounting issues
provided, however, any such dispute shall not constitute
"cause" if the Company, at its own expense, elects to have a
nationally recognized public accounting firm resolve the
accounting issue dispute and such accounting firm agrees with
the Company's position regarding such accounting issue; (ii)
termination of employment by the Employee at any time more
than six (6) months after the date of termination by the
Company for any reason of the employment of David Sharbutt as
Chief Executive Officer of the Company ("Sharbutt's
Termination"), provided the Employee, within sixty (60) days
of the date of Sharbutt's Termination, notifies the Company in
writing of his intention to terminate employment under this
provision and specifies in such notice his date of employment
termination; (iii) the requirement by the Company of
Employment Agreement PAGE 5 OF 21
Alamosa PCS LLC and Kendall Cowan
<PAGE> 6
the relocation of the Employee from Lubbock, Texas; (iv) the
change in job responsibilities of the Employee resulting in
the demotion of the Employee from the position of CFO, which
demotion is caused by something other than would be cause for
termination of the Employee's employment by the Company for
cause and other than the non-performance of the Employee as
defined later herein; or (v) the failure of the Company to
complete its initial public offering (IPO) on or before
December 31, 2000.
(d) The term "non-performance by the Employee" in the event of
termination of the Employee's employment by the Company means
the determination by a super-majority (greater than 75%) of
the members of the Board of Managers of the Company, in their
sole and absolute discretion, that the Employee is not
performing his duties under this Agreement after the CEO or
the Board of Managers of the Company has delivered to the
Employee written notice which specifically identifies the
manner in which the CEO or the Board believes he is not
performing his duties and which is not or cannot be cured
within 15 days after such written notice is delivered to the
Employee.
7. CONSEQUENCES OF TERMINATION.
(a) CONSEQUENCES OF TERMINATION ON EMPLOYEE'S DEATH OR
DISABILITY. If the Employee's employment is terminated prior
to November 30,2004, because of the Employee's death or
disability, (i) subject to Section 7(g) hereof, this Agreement
terminates immediately; (ii) Employee or his legal
representative or estate, as the case may be, shall be
eligible to exercise any options granted and vested pursuant
to Section 2(c) hereof at the time of such death or
disability, plus, if such death or disability does not occur
on November 30 of a given year, a fractional portion of those
options which would have vested and become exercisable
pursuant to Section 2(c) hereof on the November 30 immediately
following such death or disability based on a fraction whose
numerator is the number of months (including the month in
which the date of death or disability occurs) since the
previous November 30 and whose denominator is twelve (12), in
accordance with the provisions of Section 2(c) hereof and the
option agreement referred to therein, and any other options
granted to the Employee shall be forfeited; (iii) the Company
will pay the Employee, or his legal representative or estate,
as the case may be, in full satisfaction of all of its
compensation (base salary and bonus) obligations under this
Agreement, an amount equal to the sum of any base salary due
to the Employee through the last day of employment, plus any
accrued bonus to which the Employee may have been entitled on
the last day of employment, but had not yet been received; and
(iv) the Employee's benefits and rights under any Benefit Plan
shall be paid, retained or
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Alamosa PCS LLC and Kendall Cowan
<PAGE> 7
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.
(b) CONSEQUENCES OF TERMINATION BY THE COMPANY FOR ANY REASON
OTHER THAN FOR CAUSE OR FOR NON-PERFORMANCE OF EMPLOYEE.
(1) If the Employee's employment is terminated by the
Company prior to November 30, 2004, for any reason
other than for cause or non-performance of Employee,
(i) subject to Section 7(g) hereof, this Agreement
terminates immediately; (ii) Employee or his legal
representative or estate, as the case may be, shall
be eligible to exercise any options granted but not
exercised pursuant to Section 2(c) hereof, which
options shall be deemed vested as of the date of the
Employee's termination of employment regardless of
whether or not they are in fact otherwise vested
pursuant to Section 2(c) hereof on said date, in
accordance with the provisions of Section 2(c) hereof
and the option agreement referred to therein; (iii)
the Company will pay the Employee, in full
satisfaction of all of its compensation (base salary
and bonus) obligations under this Agreement, an
amount equal to the sum of any base salary due to the
Employee through the last day of employment, plus any
accrued bonus to which the Employee may have been
entitled on the last day of employment, but had not
yet been received; (iv) the Company will pay the
Employee, within sixty (60) days of such termination,
a lump sum severance payment equal to one (1) year's
base salary as in effect at the date of employment
termination; and (v) 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; provided, however, that Employer shall
have no obligation to make any payments toward these
benefits for Employee from and after termination.
(2) Any payment pursuant to clause (b)(1)(iv) above
(the "Termination Payment"):
a. will be subject to offset for any
advances, amounts receivable, and loans,
including accrued interest, outstanding on
the date of the employment termination; and
b. 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
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<PAGE> 8
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.
(c) CONSEQUENCES OF TERMINATION FOR CAUSE BY THE COMPANY. If
the Employee's employment is terminated by the Company prior
to November 30, 2004, for cause, (i) subject to Section 7(g)
hereof, this Agreement terminates immediately; (ii) Employee
shall not be eligible to exercise and shall forfeit any
options granted (whether or not vested) pursuant to Section
2(c) hereof at the time of such employment termination that
have not already been exercised by the Employee at the time of
such employment termination; (iii) the Company will pay the
Employee, in full satisfaction of all of its compensation
(base salary and bonus) obligations under this Agreement, an
amount equal to the sum of any base salary due to the Employee
through the last day of employment, plus any accrued bonus to
which the Employee may have been entitled on the last day of
employment, but had not yet been received; and(iv) 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.
(d) CONSEQUENCES OF TERMINATION BY THE EMPLOYEE FOR ANY REASON
OTHER THAN FOR CAUSE OR EMPLOYEE'S DEATH OR DISABILITY. If,
upon forty-five (45) days' prior written notice to the Company
by the Employee, the Employee's employment is terminated by
the Employee prior to November 30, 2004, for any reason other
than for cause or Employee's death or disability, (i) subject
to Section 7(g) hereof, this Agreement terminates immediately;
(ii) Employee or his legal representative or estate, as the
case may be, shall be eligible to exercise any options granted
and vested, but not exercised pursuant to Section 2(c) hereof
at the time of such employment termination, in accordance with
the provisions of Section 2(c) hereof and the option agreement
referred to therein, and any other options granted to the
Employee shall be forfeited; (iii) the Company will pay the
Employee, in full satisfaction of all of its compensation
(base salary and bonus) obligations under this Agreement, an
amount equal to the sum of any base salary due to the Employee
through the last day of employment, plus any accrued bonus to
which the Employee may have been entitled on the last day of
employment, but had not yet been received; and (iv) the
Employee's benefits and rights under any Benefit Plan, other
than any basic health and medical benefit plan, shall be
retained or forfeited in accordance with the terms of such
plan; provided, however, that Employer shall have no
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<PAGE> 9
obligation to make any payments toward these benefits for
Employee from and after termination.
(e) CONSEQUENCES OF TERMINATION BY THE EMPLOYEE FOR CAUSE.
(1) If, upon forty-five (45) days' prior written
notice to the Company by the Employee, the Employee's
employment is terminated by the Employee prior to
November 30, 2004, for cause (i) subject to Section
7(g) hereof, this Agreement terminates immediately;
(ii) Employee or his legal representative or estate,
as the case may be, shall be eligible to exercise any
options granted and vested pursuant to Section 2(c)
hereof at the time of such employment termination,
plus, if such employment termination does not occur
on November 30 of a given year, those options which
would have vested and become exercisable pursuant to
Section 2(c) hereof on the November 30 immediately
following such employment termination, in accordance
with the provisions of Section 2(c) hereof and the
option agreement referred to therein, and any other
options granted to the Employee shall be forfeited;
(iii) the Company will pay the Employee, in full
satisfaction of all of its compensation (base salary
and bonus) obligations under this Agreement, an
amount equal to the sum of any base salary due to the
Employee through the last day of employment, plus any
accrued bonus to which the Employee may have been
entitled on the last day of employment, but had not
yet been received; (iv) the Company will pay the
Employee, within sixty (60) days of such termination,
a lump sum severance payment equal to one (1) year's
base salary as in effect at the date of employment
termination or the unpaid balance of the annual base
salary which would have been payable to Employee
through November 30, 2004, whichever amount shall be
less; and (v) 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;
provided, however, that Employer shall have no
obligation to make any payments toward these benefits
for Employee from and after termination.
(2) Any payment pursuant to clause (e)(1)(iv) above
(the "Termination Payment"):
a. will be subject to offset for any
advances, amounts receivable, and loans,
including accrued interest, outstanding on
the date of the employment termination; and
Employment Agreement PAGE 9 OF 21
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<PAGE> 10
b. 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.
(f) CONSEQUENCES OF TERMINATION BY THE COMPANY FOR
NON-PERFORMANCE BY THE EMPLOYEE. If the Employee's employment
is terminated by the Company prior to November 30, 2004, for
non-performance by the Employee (i) subject to Section 7(g)
hereof, this Agreement terminates immediately; (ii) Employee
or his legal representative or estate, as the case may be,
shall be eligible to exercise any options granted and vested
but not exercised pursuant to Section 2(c) hereof at the time
of such employment termination, in accordance with the
provisions of Section 2(c) hereof and the option agreement
referred to therein, and any other options granted to the
Employee shall be forfeited; (iii) the Company will pay the
Employee, in full satisfaction of all of its compensation
(base salary and bonus) obligations under this Agreement, an
amount equal to the sum of any base salary due to the Employee
through the last day of employment, plus any accrued bonus to
which the Employee may have been entitled on the last day of
employment, but had not yet been received; and (iv) 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; provided, however, that Employer shall have no
obligation to make any payments toward these benefits for
Employee from and after termination.
(g) PRESERVATION OF CERTAIN PROVISIONS. Notwithstanding any
provisions of this Agreement to the contrary, the provisions
of Sections 8 through 13 hereof shall survive the expiration
or termination of this Agreement as necessary to give full
effect to all of the provisions of this Agreement.
8. NON-COMPETITION BY EMPLOYEE. During the term of this Agreement, the
Employee shall not, directly or indirectly, either as an Employee, Employer,
Consultant, Agent, Principal, Partner, Corporate Officer, Director, Shareholder,
Member, Investor or in any other individual or representative capacity, engage
or participate in any business that is in competition in any manner whatever
with the business of the Company. For these purposes, the business of the
Company is establishing and providing mobile wireless communications services
(the "Business"), including all aspects of the Business within the Service Area
as that term is defined in the Schedule of Definitions referred to in and
incorporated by reference into the Sprint Agreement. Furthermore,
Employment Agreement PAGE 10 OF 21
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<PAGE> 11
upon the expiration of this Agreement or the termination of this Agreement prior
to November 30, 2004, for any reason, the Employee expressly agrees not to
engage or participate, directly or indirectly, either as an Employee, Employer,
Consultant, Agent, Principal, Partner, Stockholder, Corporate Officer, Director,
Shareholder, Member, Investor or in any other individual or representative
capacity, for a period of two (2) years in any business that is in competition
with the Business and that is located within and/or doing business within the
Service Area as defined above as in existence during the term of the Employee's
employment with the Company. The parties agree that the Company has a legitimate
interest in protecting the Business and goodwill of the Company that has
developed in the areas of the Company's Business and in the geographical areas
of this Covenant Not To Compete as a result of the operations of the Company.
The parties agree that the Company is entitled to protection of its interests in
these areas. The parties further agree that the limitations as to time,
geographical area, and scope of activity to be restrained do not impose a
greater restraint upon Employee than is necessary to protect the goodwill or
other business interest of the Company. The parties further agree that in the
event of a violation of this Covenant Not To Compete, that the Company shall be
entitled to the recovery of damages from Employee and/or an injunction against
Employee for the breach or violation or continued breach or violation of this
Covenant. The Employee agrees that if a court of competent jurisdiction
determines that the length of time or any other restriction, or portion thereof,
set forth in this Section 8 is overly restrictive and unenforceable, the court
may reduce or modify such restrictions to those which it deems reasonable and
enforceable under the circumstances, and as so reduced or modified, the parties
hereto agree that the restrictions of this Section 8 shall remain in full force
and effect. The Employee further agrees that if a court of competent
jurisdiction determines that any provision of this Section 8 is invalid or
against public policy, the remaining provisions of this Section 8 and the
remainder of this Agreement shall not be affected thereby, and shall remain in
full force and effect.
9. EXCEPTIONS TO NON-COMPETITION COVENANTS. Notwithstanding anything
herein to the contrary or apparently to the contrary, the following shall not be
a violation or breach of the non-competition covenants contained in this
Agreement. Employee may invest in the securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if (a) such
securities are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Securities Exchange Act of 1934 and
(b) the Employee does not beneficially own (as defined in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) in excess of 5% of the outstanding
capital stock of such enterprise. Employee's investment in any company or entity
in which Employer is an owner or stockholder at the time of entering into this
Agreement shall also be an exception to the non-competition covenants. The names
of these companies or entities are shown on the attached Exhibit B, which is
incorporated herein by this reference as if copied at length. Notwithstanding
the foregoing, the Employee's relationship with other entities or business
interests of
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<PAGE> 12
Employee shall in no way interfere with or detract from the duties of the
Employee to the Company as called for in this Agreement.
10. CONFIDENTIAL INFORMATION. The Employee recognizes and acknowledges
that he will have access to certain information of members of the Company Group
(as defined below) and that such information is confidential and constitutes
valuable, special and unique property of such members of the Company Group. The
parties agree that the Company has a legitimate interest in protecting the
Confidential Information, as defined below. The parties agree that the Company
is entitled to protection of its interests in the Confidential Information. The
Employee shall not at any time, either during or subsequent to the term of this
Agreement, disclose to others, use, copy or permit to be copied, except in
pursuance of his duties on behalf of the Company, it successors, assigns or
nominees, any Confidential Information of any member of the Company Group
(regardless of whether developed by the Employee) without the prior written
consent of the Company. Employee acknowledges that the use or disclosure of the
Confidential Information to anyone or any third party could cause monetary loss
and damages to the Company. The parties further agree that in the event of a
violation of this covenant against non-use and non-disclosure of Confidential
Information, that the Company shall be entitled to a recovery of damages from
Employee and/or an injunction against Employee for the breach or violation or
continued breach or violation of this covenant.
As used herein, "Company Group" means the Company, and any entity that
directly or indirectly controls, is controlled by, or is under common control
with, the Company, and for purposes of this definition "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise.
The term "Confidential Information" with respect to any person means
any secret or confidential information or know-how and shall include, but shall
not be limited to, the plans, financial and operating information, customers,
supplier arrangements, contracts, costs, prices, uses, and applications of
products and services, results of investigations, studies or experiments owned
or used by such person, and all apparatus, products, processes, compositions,
samples, formulas, computer programs, computer hardware designs, computer
firmware designs, and servicing, marketing or manufacturing methods and
techniques at any time used, developed, investigated, made or sold by such
person, before or during the term of this Agreement, that are not readily
available to the public or that are maintained as confidential by such person.
The Employee shall maintain in confidence any Confidential Information of third
parties received as a result of his employment with the Company in accordance
with the Company's obligations to such third parties and the policies
established by the Company.
Employment Agreement PAGE 12 OF 21
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<PAGE> 13
11. DELIVERY OF DOCUMENTS UPON TERMINATION. The Employee shall deliver
to the Company or its designee at the termination of his employment all
correspondence, memoranda, notes, records, drawings, sketches, plans, customer
lists, product compositions, and other documents and all copies thereof, made,
composed or received by the Employee, solely or jointly with others, that are in
the Employee's possession, custody, or control at termination and that are
related in any manner to the past, present, or anticipated business or any
member of the Company Group. In this regard, the Employee hereby grants and
conveys to the Company all right, title and interest in and to, including
without limitation, the right to possess, print, copy, and sell or otherwise
dispose of, any reports, records, papers, summaries, photographs, drawings or
other documents, and writings, and copies, abstracts or summaries thereof, that
may be prepared by the Employee or under his direction or that may come into his
possession in any way during the term of his employment with the Company that
relate in any manner to the past, present or anticipated business of any member
of the Company Group.
12. DISPUTES. The Company and Employee agree to the following in regard
to any disputes between them arising under any of the provisions of this
Agreement other than the provisions of Sections 8 through 11 hereof. Nothing in
this Section 12 applies to or governs disputes arising under Sections 8 through
11 of this Agreement.
(a) MEDIATION. The Company and Employee agree to mediate any
dispute arising under the applicable provisions of this
Agreement. In the event of any such dispute, the parties,
within thirty (30) days of a written request for mediation,
shall attend, in good faith, a mediation in order to make a
good faith reasonable effort to resolve such dispute arising
under this Agreement. The parties shall attempt, in good
faith, to agree to a mediator. If unable to so agree, the
parties, in that event, will move to arbitration as provided
in this Agreement and there will be no mediation. If this good
faith mediation effort fails to resolve any dispute arising
under this Agreement, the Company and Employee agree to
arbitrate any dispute arising under this Agreement. This
arbitration shall occur only after the mediation process
described herein.
(b) ARBITRATION. The Company and Employee agree, as concluded
by the parties to this Agreement on the advice of their
counsel, and as evidenced by the signatures of the parties and
of their respective attorneys, that all questions as to rights
and obligations arising under the terms of this Agreement are
subject to arbitration and such arbitration shall be governed
by the provisions of the Texas General Arbitration Act (Texas
Civil Practice and Remedies Code Section 171.001 et seq as it
may be amended from time to time).
Employment Agreement PAGE 13 OF 21
Alamosa PCS LLC and Kendall Cowan
<PAGE> 14
(c) DEMAND FOR ARBITRATION. If a dispute should arise under
this Agreement, either party may within thirty (30) days make
a demand for arbitration by filing a demand in writing with
the other.
(d) APPOINTMENT OF ARBITRATORS. The parties to this Agreement
may agree on one arbitrator, but in the event that they cannot
so agree, there shall be three arbitrators, one named in
writing by each of the parties within thirty (30) days after
demand for arbitration is made, and a third to be chosen by
the two so named. The arbitrators among themselves shall
appoint a presiding arbitrator. Should either party fail to
timely join in the appointment of the arbitrators, the
arbitrators shall be appointed in accordance with the
provisions of Texas Civil Practice and Remedies Code Section
171.041.
(e) HEARING. All arbitration hearings conducted under the
terms of this Agreement, and all judicial proceedings to
enforce any of the provisions of this Agreement, shall take
place in Lubbock County, Texas. The hearing before the
arbitrators of the matter to be arbitrated shall be at the
time and place within that County selected by the arbitrators
or if deemed by the arbitrators to be more convenient for the
parties or more economically feasible, may be conducted in any
city within the Service Area as referred to in Section 7
hereof or within the State of Texas.
(f) ARBITRATION AWARD. If there is only one arbitrator, his or
her decision shall be binding and conclusive. The submission
of a dispute to the arbitrators and the rendering of their
decision shall be a condition precedent to any right of legal
action on the dispute. A judgment confirming the award of the
arbitrators may be rendered by any court having jurisdiction;
or the court may vacate, modify, or correct the award in
accordance with the provisions of the Texas General
Arbitration Act (Texas Civil Practice and Remedies Code
Section 171.087 et seq as it may be amended from time to
time).
(g) COSTS OF ARBITRATION. The costs and expenses of
arbitration, including the fees of the arbitrators but
excluding any attorneys' fees, shall be advanced by the
Company, but will ultimately be borne by the losing party or
in such proportions as the arbitrators shall determine.
(h) CONDUCT OF ARBITRATION. Any arbitration brought under the
terms of this Agreement shall be conducted in the following
manner:
(1) Time Limitations. The parties agree that the
following time limitations shall govern the
arbitration proceedings conducted under the terms of
this Agreement:
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(a) Any demand for arbitration must be filed
within thirty (30) days of the date the
mediation is deemed unsuccessful, or thirty
(30) days after the date of the written
request for mediation, whichever is later.
(b) Each party must select an arbitrator
within thirty (30) days of receipt of notice
that an arbitration proceeding has
commenced. In the event that no such
selection is made, the arbitrator selected
by the other party may conduct the
arbitration proceeding without selecting any
other arbitrator.
(c) The hearing must be held within sixty
(60) days of the date on which the third
arbitrator is selected.
(d) Hearing briefs must be submitted no
later than ten (10) days after the hearing.
(e) The arbitration award must be made
within thirty (30) days of the receipt of
hearing briefs.
(2) Discovery in Arbitration Proceedings. The parties
agree that discovery may be conducted in the course
of the arbitration proceeding in accordance with the
following provisions:
(a) Each party may notice no more than three
(3) depositions in total, including both
witnesses adherent to the adverse party and
third-party witnesses.
(b) Each party may serve no more than
twenty-five (25) requests for admission on
the other party. No requests may be served
within ten (10) days of the date of hearing,
unless the parties otherwise stipulate. All
requests for admission shall be responded to
within ten (10) days of service of the
requests, unless the parties otherwise
stipulate.
(c) Each party may serve no more than fifty
(50) interrogatories on the other party. No
interrogatory shall contain subparts, or
concern more than one topic or subject of
inquiry. Interrogatories may not be phrased
so as to circumvent the effect of this
clause. No interrogatories may be served
within ten (10) days of the date of hearing,
unless the parties otherwise stipulate. All
interrogatories shall be
Employment Agreement PAGE 15 OF 21
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<PAGE> 16
responded to within ten (10) days of service
of the interrogatories, unless the parties
otherwise stipulate.
(d) Each party may serve no more than ten
(10) requests for production of documents on
the other party. No request for production
of documents shall contain subparts, or seek
more than one type of document. Requests for
production of documents may not be phrased
so as to circumvent the effect of this
clause. Unless the parties otherwise
stipulate, requests for production of
documents may not be served within ten (10)
day of the date of hearing, and all requests
for production of documents shall be
responded to within ten (10) days of service
of the requests.
(e) If any party contends that the other
party has served discovery requests in a
manner not permitted by this Section, or
that the other party's response to a
discovery request is unsatisfactory, the
party may request the presiding arbitrator
to resolve such discovery disputes. The
presiding arbitrator shall prescribe the
procedure by which such disputes are
resolved. Any discovery dispute may be
handled by telephone conference among the
parties and the presiding arbitrator.
13. SUCCESSORS; BINDING AGREEMENT; ASSIGNMENT. The Company shall
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 Company to expressly assume and agree in writing to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place, provided that the
Employee must be given the position as the Chief Financial Officer ("CFO") with
the same authority, powers and responsibilities set forth in Section 1 hereof
with respect to the subsidiary or subdivision which operates the business of the
Company as it exists on the date of such business combination. Failure of the
Company 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 Company in the
same amount and on the same terms to which the Employee would be entitled
hereunder if the Company terminated the Employee's employment without Cause,
except that all options will be immediately vested. 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, "Company" shall mean
the Company 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 Company may not assign this Agreement, (i) except in
connection with, and to the
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<PAGE> 17
acquiror of, all or substantially all of the business or assets of the Company,
provided such acquiror expressly assumes and agrees in writing to perform this
Agreement as provided in this Section, and (ii) except in connection with the
Company becoming a wholly-owned subsidiary of Holdings, in which event the
Company may assign this Agreement and all of the Company's rights and
obligations hereunder to Holdings. The Employee may not assign his rights or
delegate his duties or obligations under this Agreement.
14. NOTICE. Any notices or other communications required or permitted
to 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:
If to the Company: Alamosa PCS LLC
4403 Brownfield Highway
Lubbock, Texas 79407
Attn: David E. Sharbutt, Chairman
With Copy to: Jack McCutchin, Jr.
Crenshaw, Dupree & Milam, L.L.P.
P. O. Box 1499
Lubbock, Texas 79408-1499
If to the Employee: Kendall Cowan
8402 Vicksburg
Lubbock, Texas 79424
With Copy to:
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15. MISCELLANEOUS.
(a) SEVERABILITY. If any provision of this Agreement shall be
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 provisions of
this Agreement may be modified, waived or discharged orally, but
only by a waiver, modification or discharge in writing signed by
the Employee and
Employment Agreement PAGE 17 OF 21
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<PAGE> 18
such officer as may be designated by the Board of Managers of the
Company 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) INVALID PROVISIONS. Should any portion of this Agreement be
adjudged or held to be invalid, unenforceable or void, such
holding shall not have the effect of invalidating or voiding the
remainder of this Agreement and the parties hereby agree that the
portion so held invalid, unenforceable or void shall, if possible,
be deemed amended or reduced in scope, or otherwise be stricken
from this Agreement to the extent required for the purposes of
validity and enforcement thereof.
(d) ENTIRE AGREEMENT. This Agreement and the Exhibits attached
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
Company with respect to the subject matter hereof.
(e) SECTION HEADINGS FOR CONVENIENCE ONLY. The section headings
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
in counterparts, all of which shall be considered one and the same
instrument.
(g) GOVERNING LAW AND PERFORMANCE. This Agreement shall be
governed by the laws of the State of Texas and shall be deemed to
be executed in and performance called for in Lubbock, Lubbock
County, Texas, or at the Company's sole option, by the laws of the
state or states where this Agreement may be at issue in any
litigation involving the Company.
Employment Agreement PAGE 18 OF 21
Alamosa PCS LLC and Kendall Cowan
<PAGE> 19
DATED this 18th day of January, 2000, to be effective December 1, 1999.
COMPANY
ALAMOSA PCS LLC
By /s/ DAVID SHARBUTT
-------------------------
Name: David Sharbutt
-------------------------
Title: Chief Executive Officer
-------------------------
EMPLOYEE
/s/ KENDALL W. COWAN
--------------------------------
KENDALL W. COWAN
Employment Agreement PAGE 19 OF 21
Alamosa PCS LLC and Kendall Cowan
<PAGE> 20
Approved as to the mediation and arbitration provisions in Paragraph 12 above.