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Exhibit
10.1
SEVERANCE
AGREEMENT
SEVERANCE AGREEMENT (“
Agreement ”), dated effective July 1, 2008
(“ Commencement Date ”) by and between Crown
Castle International Corp. and Jay A. Brown, (the “
Executive ”).
This Agreement sets forth the
terms and conditions of contingent severance arrangements between
the Company (as defined below) and the Executive and cancels and
supersedes all other severance related agreements between the
parties.
For all purposes hereof, the
following defined terms have the meanings set forth
below:
1.1 “ Accrued
Obligations ” means all (i) accrued but unpaid Base
Salary to the Executive’s Date of Termination, (ii) any
earned but unpaid bonus (other than the Current Annual Bonus and
Prior Year Bonus), and (iii) any benefits for which the
Executive is eligible under the terms of any benefit Plan of the
Company or its subsidiaries.
1.2 “ Annual
Bonus ” means sixty-five percent (65%) of the Base
Salary.
1.3 “ Base
Salary ” means the greater of (i) the
Executive’s annual base salary as of the date of
Executive’s Qualifying Termination (without taking into
account any reductions that constitute Good Reason) or (ii) if
applicable, the Executive’s annual base salary in effect on
the date of a Change in Control.
1.4 “ Cause
” means (i) the Executive’s conviction of, or plea
of guilty or nolo contendere to, any criminal violation
involving dishonesty, fraud or breach of trust, or any felony which
materially adversely affects the Company or (ii) willful
engagement by the Executive in gross misconduct in the performance
of duties owed the Company that materially adversely affects the
Company.
1.5 “ Change in
Control ” has the meaning set forth on Schedule 1
hereto.
1.6 “ Change in
Control Period ” means the period beginning on the date
of a Change in Control and ending on the second anniversary of that
Change in Control.
1.7 “ Company
” means Crown Castle International Corp. and any successors
thereto.
1.8 “ Current Annual
Bonus ” means the Executive’s target annual bonus
for the calendar year with the Date of Termination, prorated on a
daily basis from the beginning of the calendar year to the Date of
Termination.
1.9 “ Date of
Termination ” means the effective date of the termination
of the Executive’s employment with the Company and its
subsidiaries (as set forth in the Notice of Termination, if
applicable) and interpreted consistently as a “separation
from service” under Section 409A of the Code (“
Section 409A ”).
1.10 “
Disability ” means the Executive’s inability to
perform the primary duties of Executive’s position for at
least 180 consecutive days due to a physical or mental impairment
and confirmed by a medical examination to the Company’s
satisfaction.
1.11 “ Good
Reason ” means (i) the assignment to the Executive
of any duties materially inconsistent with the Executive’s
position, authority, duties or responsibilities as of the date
hereof or as of the date immediately preceding a Change in Control,
if applicable, or any other action by the Company that results in a
material diminution in such position, authority, duties or
responsibilities; (ii) a decrease in the Executive’s
Base Salary or significant decrease in annual or long term bonus
opportunity; (iii) a material reduction in any material
benefits or other compensation provided to the Executive;
(iv) the Company requiring the Executive to be based at any
office or location outside the Houston metropolitan area;
(v) the Company’s material failure to comply with its
obligations under this Agreement; or (vi) the Company giving
Notice (as defined in Section 2.1 (i)). For purposes of any
determination regarding the existence of Good Reason during the
Change in Control Period, any good faith determination by the
Executive that Good Reason exists shall be presumed to be correct
unless the Company establishes by clear and convincing evidence
that Good Reason does not exist.
1.12 “
Non-Qualifying Termination ” means any termination of
the Executive’s employment with the Company and its
subsidiaries other than a Qualifying Termination.
1.13 “ Normal Option
Expiration Date ” means the normal expiration of each of
the Stock Options without taking into account any accelerated
expiration date provisions relating to termination of employment,
board membership or otherwise.
1.14 “ Notice of
Termination ” means a written notice of the termination
of the Executive’s employment that (i) indicates the
specific termination provision in this Agreement relied upon,
(ii) sets forth in reasonable detail, if applicable, the facts
and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and
(iii) if the Date of Termination is other than the date of
receipt of such notice, specifies the termination date. The failure
by the Executive to set forth in the Notice of Termination any fact
or circumstance that contributes to a showing of Good Reason shall
not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing the
Executive’s rights hereunder.
1.15 “ Plan
” means any plan, program, practice, arrangement or
policy.
1.16 “ Plan Economic
Equivalent ” means (i) the costs of a reasonable
comparable substitute Plan selected by the Executive and Company
for any Plan which does not permit the Executive’s continued
participation after the Date of Termination plus a gross up amount
for any increases in net income taxes to the Executive relating to
such provision of a substitute Plan or (ii) if Executive
becomes covered by another benefit Plan, the Company’s
incremental costs savings of not providing such benefits to the
Executive, commencing 30 days after written notice from Executive
to terminate such benefits plus any additional reasonable Plan or
benefit notice or termination period the Company reasonably needs
to receive costs savings.
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1.17 “ Prior Year
Bonus ” means the unpaid annual incentive bonus for the
year prior to the Date of Termination, if any, determined in
accordance with the Company’s incentive or annual bonus plan
for the year prior to the Date of Termination.
1.18 “ Qualifying
Termination ” means (i) the Company’s
termination of the Executive’s employment with the Company
for any reason other than for Cause or Disability or death or
(ii) the Executive’s termination of employment with the
Company within 60 days of the occurrence of an event that
constitutes Good Reason. A transfer of the Executive to any
subsidiary of the Company shall not be considered a termination of
employment hereunder.
1.19 “Restricted
Stock Awards” means restricted stock awards, phantom
stock awards and other similar equity-based incentive compensation
awards granted to the Executive relating to stock of the Company;
provided, such awards exclude Stock Options.
1.20 “ Stock
Options ” means stock options granted to the Executive to
acquire stock of the Company.
1.21 Other Terms .
Other capitalized terms shall have the meaning indicated within
this Agreement.
2.1 Term . This
Agreement is effective as of the Commencement Date and terminates
on the fifth anniversary of the Commencement Date (the “
Term ”); provided that, (i) beginning on the
fifth anniversary of the Commencement Date and each anniversary
thereafter (each, an “ Anniversary Date ”) the
Term shall be extended by 12 months unless either party provides
notice (the “ Notice ”) at least 60 days before
any such Anniversary Date of his or its intent to terminate this
Agreement as of such Anniversary Date, and (ii) if a Change in
Control occurs during the Term, this Agreement shall not expire
until the later of (a) the expiration of the Term or
(b) the end of the Change in Control Period.
2.2 Position . During
the Term, the Executive shall serve as Senior Vice President and
Chief Financial Officer of the Company (or a similar position), or
such other position agreed to in writing by the Company and
Executive.
| III. |
TERMINATION OF EMPLOYMENT |
3.1 Termination by the
Executive .
(a) Termination for Good
Reason . The Executive may terminate Executive’s
employment during the Term for Good Reason by delivering a Notice
of Termination to the Company in accordance with Section 6.8
within 60 days of the occurrence of the event purported to
constitute “Good Reason” hereunder.
(b) Termination Without
Good Reason . The Executive may terminate Executive’s
employment during the Term without Good Reason by delivering a
Notice of Termination to the Company in accordance with
Section 6.8 at least 15 days prior to the effective date of
such termination.
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3.2 Termination by the
Company .
(a) Termination for
Cause . The Company may terminate the Executive’s
employment during the Term for Cause by delivering to the Executive
in accordance with Section 6.8 a Notice of Termination and a
copy of a resolution, duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board of
Directors of the Company (the “ Board ”),
including at least 66- 2
/ 3 % of those members of the Board who are
not employees of the Company at a meeting of the Board called and
held for the purpose (after reasonable notice to the Executive and
an opportunity for Executive, together with counsel, to be heard
before the Board), finding that in the good faith opinion of the
Board, the Executive was guilty of conduct specified in the
definition of “Cause”.
(b) Termination Without
Cause . The Company may terminate the Executive’s
employment during the Term without Cause by delivering a Notice of
Termination to the Executive in accordance with
Section 6.8.
3.3 Death or
Disability . The Executive’s employment shall terminate
automatically upon the Executive’s death during the Term. If
the Company determines in good faith that the Disability of the
Executive has occurred during the Term, it may give to the
Executive a Notice of Termination in accordance with
Section 6.8 of this Agreement. In such event, the
Executive’s employment shall terminate effective on the 30th
day after receipt of such notice, provided that within the 30 days
after such receipt, the Executive shall not have returned to
full-time performance of the Executive’s duties.
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BENEFITS UPON TERMINATION |
4.1 Qualifying Termination
Not Within the Change in Control Period . If, during the Term,
the Executive’s employment with the Company and its
subsidiaries is terminated in a Qualifying Termination and such
termination does not occur during a Change in Control
Period:
(a) the Company shall pay to
the Executive in a cash lump sum within 30 days after the Date of
Termination, the sum of (i) all Accrued Obligations and
(ii) the product of one (1) times the sum of the
Executive’s Base Salary and Annual Bonus;
(b) for one (1) year
following the Date of Termination, or such longer period as each
Plan may provide, the Company shall continue medical, dental, and
vision benefits to the Executive and the Executive’s family
at a level at least equal to those that would have been provided if
the Executive’s employment had not been terminated under such
Plan of the Company applicable to the Executive as of the Date of
Termination (with payment of the Plan Economic Equivalent as to
each Plan (i) that does not permit the Executive’s
continued participation or (ii) that the Executive becomes
covered under another Plan with similar or comparable benefits
(after 30 days notice to the Company));
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(c) all Stock Options held by
the Executive shall become immediately vested and exercisable, and
all Restricted Stock Awards held by the Executive shall continue to
vest as if the Executive was an employee of the Company for the two
(2) year period after the Date of Termination (“
Vesting Period ”);
(d) the Company shall pay the
Executive the Current Annual Bonus when and if annual bonuses for
the year of termination are paid to other executive officers of the
Company;
(e) the Executive shall be
entitled to fully participate in the Company’s 401(k) plan
for the calendar year with the Date of Termination including the
Company contributions based upon participation or matching (with
payment of the after-tax economic equivalent if and to the extent
such is not permitted under the Company’s 401(k) plan or by
applicable law);
(f) the Company shall pay to
Executive the Prior Year Bonus when and if any annual bonuses for
the year prior to the Date of Termination are paid to other
executive officers of the Company; and
(g) the Executive shall, as
of such termination, be released by the Company (including its
subsidiaries) from any and all claims and causes of action of any
kind or character arising from Executive’s employment with
the Company (including its subsidiaries and any board membership
relating to employment) and the Company shall indemnify and hold
harmless the Executive against any such claims or causes of action
to the extent permitted by applicable law.
4.2 Qualifying Termination
During the Change in Control Period . If, during the Term, the
Executive’s employment with the Company and its subsidiaries
is terminated in a Qualifying Termination and such termination
occurs during a Change in Control Period:
(a) the Company shall pay to
the Executive in a cash lump sum within 30 days after the Date of
Termination, the sum of (i) all Accrued Obligations and
(ii) the product of two (2) times the sum of the
Executive’s Base Salary and Annual Bonus;
(b) for two (2) years
following the Date of Termination, or such longer period as each
Plan may provide, the Company shall continue medical, dental, and
vision benefits to the Executive and the Executive’s family
at a level at least equal to those that would have been provided if
the Executive’s employment had not been terminated under such
Plan of the Company applicable to the Executive as of the Date of
Termination (with payment of the Plan Economic Equivalent as to
each Plan (i) that does not permit the Executive’s
continued participation or (ii) that the Executive becomes
covered by another Plan with similar or comparable benefits (after
30 days notice to the Company));
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(c) all Stock Options and all
Restricted Stock Awards held by the Executive shall become
immediately vested and such Stock Options shall become immediately
exercisable.
(d) the Company shall pay the
Executive the Current Annual Bonus when and if annual bonuses for
the year of termination are paid to other executive officers of the
Company;
(e) the Executive shall be
entitled to fully participate in the Company’s 401(k) plan
for the calendar year with the Date of Termination including the
Company contributions based upon participation or matching (with
payment of the after-tax economic equivalent if and to the extent
such is not permitted under the Company’s 401(k) plan or by
applicable law);
(f) the Company shall pay to
Executive the Prior Year Bonus when and if any annual bonuses for
the year prior to the Date of Termination are paid to other
executive officers of the Company; and
(g) the Executive shall, as
of such termination, be released by the Company (including its
subsidiaries) from any and all claims and causes of action of any
kind or character arising from Executive’s employment with
the Company (including its subsidiaries and any board membership
relating to employment) and the Company shall indemnify and hold
harmless the Executive against any such claims or causes of action
to the extent permitted by applicable law.
Any provision in this
Agreement to the contrary notwithstanding, if a Change in Control
occurs within six (6) months after the Date of Termination,
which constitutes a change in ownership or effective control of the
Company or a change in the ownership of a substantial portion of
its assets within the meaning of such terms under
Section 409A, and if it is reasonably demonstrated by the
Executive that such termination of employment (x) was at the
request of a third party who had taken steps reasonably calculated
to effect the Change in Control or (y) otherwise arose in
connection with or anticipation of the Change in Control, then for
all purposes of this Agreement the termination of the
Executive’s employment shall be deemed to have occurred
during a Change in Control Period. In such circumstance, the
incremental taxable payments pursuant to subsections (a)(ii),
(b) and (c) as the result of deemed termination during a
Change in Control Period shall be made in the first regularly
scheduled payroll date following the Change in Control or, if
later, the scheduled date of payment in any bonus or other plan
pursuant to which the payments are made.
4.3 Non-Qualifying
Termination . If the Executive’s employment with the
Company and its subsidiaries is terminated in a Non-Qualifying
Termination, this Agreement shall terminate without further
obligations to the Executive other than Accrued Obligations;
provided, that, if the Executive’s employment is terminated
due to Executive’s death or Disability, all Stock Options
held by the Executive shall become immediately vested and
exercisable, and all Restricted Stock Awards held by the Executive
shall continue to vest as if the Executive was an employee of the
Company for the Vesting Period.
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4.4 Option Exercise and
Termination. All vested Stock Options granted to the Executive
(including Stock Options vested pursuant to this Agreement) shall
be exercisable for 24 months following the later of (a) the
Date of Termination or (b) the date that Executive ceases to
be a member of the Board and a member of the board of director of
any of the Company subsidiaries; provided that the exercise period
shall (i) extend to any longer period for exercise of Stock
Options pursuant to the applicable stock option agreement or
certificate for such Stock Options and (ii) not extend beyond
the Normal Option Expiration Date. The Company as to Stock Options
granted to the Executive may not (a) require the exercise of
such Stock Options, (b) reduce the exercise period for such
Stock Options or (c) otherwise take action to circumvent the
exercise period for such Stock Options as provided above. The above
provisions shall supercede any contrary provisions in any stock
option agreement, stock option certificate or other
document.
4.5 Excise Tax
Payments .
(a) Notwithstanding anything
in the Agreement to the contrary, in the event of the determination
(as hereinafter provided) that any required payment by the Company
to or for benefit of the Executive (whether paid or payable
pursuant to the terms of the Agreement or otherwise (individually
and collectively, “ Payment ”)) would be subject
to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “ Code ”)
or any successor provision thereto (the “ Excise Tax
”), the Executive shall be entitled to receive an additional
payment or payments (individually or collectively, “ Tax
Assistance Payment ”), which shall include an amount such
that, after the Executive pays (1) all taxes (including any
interest or penalties imposed with respect to such taxes) and
(2) any Excise Tax (including interest and penalties with
respect thereto) imposed upon the Tax Assistance Payment, the
Executive retains so much of the Tax Assistance Payment as is equal
to the Excise Tax (including interest and penalties with respect
thereto) imposed on the Payment.
(b) Subject to the provisions
hereinafter concerning the provision of notice of a claim by the
Internal Revenue Service (“ IRS ”), all
determinations required to be made under these provisions,
including whether an Excise Tax is payable by the Executive, the
amount of such Excise Tax and whether the Company is required to
pay the Executive a Tax Assistance Payment and the amount of such
Tax Assistance Payment, if any, shall be made by the
Company’s independent accountants or such other nationally
recognized accounting firm retained by the Company and reasonably
acceptable to the Executive (“ Accounting Firm
”). The Company shall direct the Accounting Firm to submit
its determination and detailed supporting calculations to both the
Executive and the Company within 30 days after the payment or
provision of any benefit that could give rise to an Excise Tax and
any such other time or times as the Executive or the Company may
request. If the Accounting Firm determines that any Excise Tax is
payable by the Executive, the Company shall pay the required Tax
Assistance Payment to the Executive within 10 business days after
the Company receives such determination and calculations with
respect to any Payment to the Executive.
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(c) Any federal tax returns
the Executive files shall be prepared and filed on a basis
consistent with the determination of the Accounting Firm with
respect to the Excise Tax payable by the Executive. If the
Accounting Firm determines that the Executive is required to pay no
Excise Tax, it shall (at the same time it makes such determination)
furnish the Executive and the Company an opinion that the Executive
has substantial authority not to report any Excise Tax on the
Executive’s federal income tax return. However, in view of
the uncertainty concerning application of Section 4999 of the
Code (or any successor provision thereto) at the time of any
determination made hereunder by the Accounting Firm, it is possible
that a Tax Assistance Payment that should have been made by the
Company will not have been made (“ Underpayment
”), consistent with the calculations required to be made
hereunder. In the event the Company exhausts or fails to pursue its
remedies pursuant to the provisions concerning notice of a claim by
the IRS, and the Executive thereafter is required to make a payment
of any Excise Tax, the Executive shall direct the Accounting Firm
to determine the amount of the Underpayment and to submit its
determination and detailed supporting calculations as promptly as
possible both to the Executive and to the Company, which shall pay
the amount of such Underpayment to the Executive or for the
Executive’s benefit within 10 business days following the
Company’s receipt of such determination and
calculations.
(d) Each of the Executive and
the Company shall provide the Accounting Firm access to and copies
of any books, records and documents in the Executive’s or its
possession, as the case may be, reasonably requested by the
Accounting Firm, and shall otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the
determination and calculations required or contemplated
hereunder.
(e) The Company shall bear
the fees and expenses of the Accounting Firm for services
hereunder. If, for any reason, the Executive initially pays such
fees and expenses, the Company shall reimburse the Executive the
full amount of the same within 10 business days following receipt
from the Executive of a statement and reasonable evidence of the
Executive’s payment thereof.
(f) The Executive shall
notify the Company in writing of any claim by the IRS that, if
successful, would require the Company to pay a Tax Assistance
Payment. The Executive shall give such notification as promptly as
practicable, but in no event later than the 10th business day next
following the Executive’s receipt of such claim, and the
Executive further shall apprise the Company of the nature of such
claim and the date on which it is required to be paid (in each
case, to the extent known to the Executive). The Executive shall
not pay or otherwise satisfy such claim prior to the earlier of
(a) the expiration of the 30 calendar day period next
following the date on which the Executive gives notice to the
Company or (b) the date any payment of the amount with respect
to such claim is due. If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) provide the Company any
written records or documents in the Executive’s possession
relating to
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