RESTRICTED STOCK PURCHASE AGREEMENT, dated as of November 20, 1998,
between Nextel Partners, Inc., a Delaware corporation (the "Company"), and
________ (the "Purchaser").
WHEREAS, the Purchaser is an executive officer of each of the Company
and Nextel Partners Operating Corp., a Delaware corporation and a wholly owned
subsidiary of the Company, and his continued participation is considered by the
Company to be important for the development of the Company's business; and
WHEREAS, in recognition of Purchaser's anticipated and highly valued
contribution to the Company, the Company is willing to sell to the Purchaser,
and the Purchaser desires to purchase from the Company, shares of the Company's
Class A Common Stock, in accordance with the terms and conditions hereof.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. As used herein, the following terms shall have the
following meanings set forth below:
"Additional Time Shares" means Time Shares other than Initial Time
Shares.
"Adjusted IRR" means, with respect to any Initial DLJ Equity sold or
otherwise disposed of, the internal rate of return on such Initial DLJ Equity as
of the date of such sale or other disposition, determined after giving effect to
any resulting acceleration of vesting of any Shares and of any options to
purchase Class A Common Stock that occurs upon or in connection with either such
sale or disposition of Initial DLJ Equity or any event giving rising to or
causing such sale or disposition of Initial DLJ Equity.
"Beneficial Owner" means a beneficial owner as defined in Rules 13d-3,
13d-5 or 16a-1 under the Exchange Act (or any successor rules), including the
provision of such Rules that a Person shall be deemed to have beneficial
ownership of all securities that such Person has a right to acquire within 60
days, but such provision of the Rules will apply only if (i) all conditions
(other than payment of the purchase or acquisition price of such securities) to
such Person's exercise of such rights have been satisfied and (ii) such
securities (if options, warrants, or similar derivatives) are "in-the-money,"
provided that in all cases a Person shall not be deemed a Beneficial Owner of,
or to own beneficially, any securities if such beneficial ownership (1) arises
solely as a result of a revocable proxy delivered in response to a proxy or
consent solicitation made pursuant to, and in accordance with, the Exchange Act
and the applicable rules and regulations thereunder, and (2) is not also then
reportable on Schedule 13D under the Exchange Act.
"Board" means the Board of Directors of the Company.
"Build Shares" means Shares that vest in accordance with Schedule I
depending on the Company's achievement of the buildout-related performance
targets set forth on Annex A.
"Capital Stock" of any Person means any and all shares, interests,
participation or other equivalents (however designated) of stock of, or other
ownership interests in, such Person, but excluding any pay-in-kind preferred
stock, other "debt equivalents" and mandatorily redeemable "nominal equity"
securities.
"Cause" means (i) the Purchaser's conviction of a felony evidencing
criminal dishonesty or moral turpitude, (ii) a willful and material breach of
the Purchaser's duty of loyalty to the Company or any of its subsidiaries or
(iii) after 20 business days following the Purchaser's receipt of a written
notification from the Company specifying the particulars in reasonable detail,
the Purchaser's failure to comply with or to cure, as applicable, (A) a willful
and material refusal to comply with specific written directions of the Board
consistent with the Purchaser's employment agreement with the Company or any
subsidiary of the Company and capable of being performed by him or (B) a willful
and material breach of the Purchaser's duty of due care to the Company.
"Change in Control of the Company" means the occurrence of any of the
following events:
(a) any person or group (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act and the regulations thereunder) (i) is or becomes
the Beneficial Owner of more than 50% of the total Voting Stock or Total
Common Equity of the Company, or (ii) otherwise has the power to direct the
management and policies of the Company, directly or through one or more
intermediaries, whether through the ownership of voting securities, by
contract or otherwise, except that no change of control will be deemed to
have occurred under this clause (ii) as a result of customary rights granted
(A) in any indenture, credit agreement or other agreement for borrowed money
or (B) to holders of non-convertible, mandatorily redeemable, preferred
stock unless and until action occurs that would otherwise cause a "Change in
Control of the Company" as herein defined, provided that such rights were
granted pursuant to a transaction in the financial markets and not as part
of a strategic alliance or similar transaction;
(b) the Company sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person (other than
to a direct or indirect wholly owned subsidiary of the Company);
(c) the Company, directly or indirectly, consolidates with, or merges
with or into, another Person, or any Person, directly or indirectly,
consolidates with, or merges with or into, the Company, and pursuant to such
transaction (or series of transactions) either: (i) the outstanding Voting
Stock of the Company is converted into or exchanged for cash, securities or
other property, but excluding a transaction (or series of transactions)
where (A) the outstanding Voting Stock of the Company is converted into or
exchanged for Voting Stock
2
of the surviving or transferee Person and (B) the holders of Voting
Stock of the Company immediately preceding such transaction receive more
than 50% of the total Voting Stock and Total Common Equity of the surviving
or transferee Person in substantially the same relative proportions as such
holders had prior to such transaction; or (ii) new shares of Voting Stock of
the Company are issued so that immediately following such transaction, the
holders of Voting Stock of the Company immediately preceding such
transaction own less than 50% of the Voting Stock and Total Common Equity of
the surviving Person; or
(d) during any period of two consecutive years following the Closing
Date, individuals who at the beginning of such period constituted the board
of directors of the Company (together with any directors who are members of
the board of directors of the Company on the date of the Closing, and any
new directors whose election by such board of directors or whose nomination
for election by the stockholders of the Company was approved by a vote of
66-2/3% of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority of
the board of directors of the Company then in office; provided, that no
change in the composition of the Board in connection with the Closing, or by
reason of any substitution of one director for another so long as both
directors are nominated by the same Person, shall constitute a Change in
Control of the Company for purposes of this paragraph (d).
Notwithstanding the foregoing, no "Change of Control of the Company"
shall occur merely by reason of any creditor of the Company foreclosing on
or otherwise causing the sale, transfer or other disposition of all or any
substantial part of the Company's assets (including, without limitation, the
Company's equity interests in its subsidiaries).
"Change in Control of Nextel" means the occurrence of any of the
following events:
(a) any person or group (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act and the regulations thereunder) other than a
Permitted Holder (i) is or becomes the Beneficial Owner of more than 50% of
the total voting stock of Nextel ordinarily entitled to vote in the election
of directors ("Nextel Voting Stock") or Total Common Equity of Nextel, or
(ii) otherwise has the power to direct the management and policies of
Nextel, directly or through one or more intermediaries, whether through the
ownership of voting securities, by contract or otherwise, except that no
change of control will be deemed to have occurred under this clause (ii) as
a result of customary rights granted (A) in any indenture, credit agreement
or other agreement for borrowed money unless and until there has been a
default under the terms of that agreement and the trustee or lender
exercises the rights granted therein or (B) to holders of non-convertible,
mandatorily redeemable, preferred stock unless and until action occurs that
would otherwise cause a "Change in Control of Nextel" as herein defined,
provided that such rights were granted pursuant to a transaction in the
financial markets and not as part of a strategic alliance or similar
transaction;
3
(b) Nextel sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person (other than
a Permitted Holder or a direct or indirect wholly owned subsidiary of
Nextel);
(c) Nextel, directly or indirectly, consolidates with, or merges with
or into, another Person (other than a Permitted Holder), or any Person
(other than a Permitted Holder), directly or indirectly, consolidates with,
or merges with or into, Nextel, and pursuant to such transaction (or series
of transactions) either: (i) the outstanding Nextel Voting Stock is
converted into or exchanged for cash, securities or other property, but
excluding a transaction (or series of transactions) where (A) the
outstanding Nextel Voting Stock is converted into or exchanged for Voting
Stock of the surviving or transferee Person and (B) the holders of Nextel
Voting Stock immediately preceding such transaction receive more than 50% of
the total Voting Stock and Total Common Equity of the surviving or
transferee Person in substantially the same relative proportions as such
holders had prior to such transaction; or (ii) new shares of Nextel Voting
Stock are issued so that immediately following such transaction, the holders
of Nextel Voting Stock immediately preceding such transaction own less than
50% of the Voting Stock and Total Common Equity of the surviving Person; or
(d) during any period of two consecutive years, individuals who at the
beginning of such period constituted the board of directors of Nextel
(together with any directors who are members of the board of directors of
Nextel on the date of the Closing, and any new directors whose election by
such board of directors or whose nomination for election by the stockholders
of Nextel was approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the board of directors of Nextel then
in office;
provided that it is expressly understood and agreed that the direct or indirect
sale or other disposition of all or any portion of the Nextel Voting Stock
and/or the Capital Stock in Nextel held now or in the future by any Permitted
Holder to any Person other than another Permitted Holder shall not by itself be
a Change in Control of Nextel, unless such sale or disposition, alone or in
conjunction with other transactions, results in the occurrence of an event of
the type described in any of clauses (a), (b), (c) or (d) above.
"Class A Common Stock" means the Class A Common Stock, par value $.001
per share, of the Company.
"Closing" means the initial closing (if any) of the equity investments
contemplated by the Commitment Letter.
"Closing Price" on any Trading Day with respect to the per share price
of any shares of Capital Stock of any Person means the last reported sale price
regular way or, in case no such
4
reported sale takes place on such day, the average of the reported closing bid
and asked prices regular way, in either case on the New York Stock exchange or
if such shares of Capital Stock are not listed or admitted to trading on such
exchange, on the principal national securities exchange on which such shares are
listed or admitted to trading or, if not listed or admitted to trading on any
national securities exchange, on the Nasdaq Stock Market or, if such shares are
not listed or admitted to trading on any national securities exchange or quoted
on the Nasdaq Stock Market and the issuer and principal securities exchange do
not meet such requirements, the average of the closing bid and asked prices in
the over-the-counter market as furnished by any New York Stock Exchange member
firm of national standing that is selected from time to time by such Person for
that purpose.
"Commitment Letter" means the Commitment Letter, dated August 13, 1998,
among the Company and the investors named therein.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Company" has the meaning set forth in the preamble.
"control" of a Person means the power, direct or indirect, (i) to vote
or direct the voting of more than 50% of the outstanding shares of Voting Stock
of such Person, or (ii) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Deferred Shares" means, collectively, Unvested Revenue Shares and
Unvested EBITDA Shares (including but not limited to Eligible Shares).
"DLJ" means ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
"DLJ Investors" means, collectively, DLJ Merchant Banking Partners II,
L.P., Sprout Capital VIII, L.P. and certain other affiliates and/or clients of
DLJ, that purchase in the aggregate $125 million of Series A Preferred Stock at
the Closing.
"EBITDA" means, with respect to any fiscal year of the Company,
earnings of the Company for such year before interest (including without
limitation the interest component of any capital lease obligation), taxes,
depreciation and amortization for such year; provided, that for purposes of
determining whether EBITDA targets have been met hereunder, the following costs
and expenses of the Company shall, to the extent deducted from earnings in
calculating EBITDA in accordance with generally accepted accounting principles,
be added back to earnings in calculating EBITDA: (i) non-cash compensation
expenses resulting from the application of APB Opinion No. 25 to vesting of
Shares under the Restricted Stock Purchase Agreements, (ii) out-of-pocket costs
incurred by the Company (or incurred by others and reimbursed by the Company) in
connection with
5
the transactions contemplated by the Commitment Letter to be consummated at the
Closing (whether such transactions are consummated at the Closing or
thereafter), including without limitation the contemplated offering of
high-yield bonds and the subsequent exchange of such privately issued bonds for
publicly registered bonds, (iii) prior to the IPO, the costs incurred in
complying with SEC reporting requirements relating to the Company's publicly
held bonds (if any), and (iv) other appropriate costs and expenses to be
determined by the Board (acting in the good faith exercise of its business
judgment), which may include expenses arising under the agreements relating to
the operation of the Company to the extent not contemplated by the Company's
business plan in effect on the date hereof (on which the EBITDA targets set
forth on Annex A are based). The parties agree that (i) non-cash charges shall,
to the extent deducted from earnings, be added back to earnings in calculating
EBITDA, and (ii) extraordinary non-cash revenue not in the ordinary course of
business shall be deducted from earnings in calculating EBITDA, unless the Board
(acting in the good faith exercise of its business judgment) determines such
adjustment to be inappropriate.
"EBITDA Shares" means Shares that vest in accordance with Schedule I
depending on the Company's achievement of the EBITDA-related performance targets
set forth on Annex A.
"Eligible Shares" means, collectively, Eligible EBITDA Shares and
Eligible Revenue Shares .
"Eligible EBITDA Shares" has the meaning set forth in Schedule I.
"Eligible Revenue Shares" has the meaning set forth in Schedule I.
"Escrow Agent" has the meaning set forth in Section 5(a).
"Escrow Shares" has the meaning set forth in Section 5(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any Shares repurchased by
the Company hereunder, (i) if there has been no Closing, the fair market value
thereof as determined in good faith by the Board no more than ten days prior to
the consummation of such repurchase and (ii) if there has been a Closing, the
Spectrum Price in effect on the date of consummation of such repurchase, subject
to adjustment if the Board determines in good faith that such Spectrum Price no
longer reflects the fair market value of such Shares (it being understood that
the Board's determination of the Spectrum Price may be challenged by the
Purchaser as provided in the definition thereof). To the extent there is not a
recent determination of the Spectrum Price on the date of determination of Fair
Market Value, the Board will calculate the Spectrum Price as of such date in
good faith on the basis of available information.
"FCC" means the Federal Communications Commission.
6
"FCC Modifications" means changes to the agreements relating to the
governance and operation of the Company that are implemented in response to any
assertion or finding by the FCC that such agreements constitute an impermissible
change of control of the FCC licenses made available by Nextel Sub to the
Company thereunder, which changes are implemented in order to cause such
agreements to be in compliance with FCC requirements so as to reflect the intent
of the parties thereto that no impermissible change of control take place.
"Good Reason" means (i) a material adverse change in the Purchaser's
duties, responsibilities or reporting relationships, (ii) a relocation of the
Purchaser's principal office to a location more than 30 miles away from his then
current office, (iii) a reduction of salary not agreed to by the Purchaser, or
material diminution of other employee benefits (other than any change in
employee benefits approved by the Board and implemented in a non-discriminatory
fashion with respect to all participating employees), or any other material
adverse change in his working conditions, (iv) a material breach by the Company
of other obligations under the Purchaser's employment agreement with the Company
or a subsidiary of the Company that are not cured after 20 business days
following the Company's receipt of a written notification from the Purchaser
specifying the particulars in reasonable detail, and (v) from and after the
Closing, following the implementation of any FCC Modifications, if Nextel Sub
exercises control over day-to-day operating decisions, policy decisions or
personnel decisions of the Company pursuant to such FCC Modifications that
(before such modifications) would have been decisions made by the Company's
management and such control exercised by Nextel Sub is materially more extensive
(in the collective reasonable judgment of the Senior Managers then employed by
the Company) than that which Nextel Sub could have exercised under the
agreements to which Nextel Sub is a party relating to the governance and
operation of the Company before giving effect to the FCC Modifications.
Notwithstanding the foregoing, a termination with Good Reason under clause
(v) above shall not be deemed effective until 90 days following written notice
by the Purchaser to the Company of the occurrence of any of the foregoing.
"Initial DLJ Equity" means the shares of Series A Preferred Stock
contemplated by the Commitment Letter to be issued to the DLJ Investors at the
Closing, regardless of whether DLJ has transferred funds in respect of such
shares, together with any shares of Class A Common Stock issuable upon
conversion thereof, and any shares of Capital Stock of the Company or other
securities into which such shares are subdivided, combined or otherwise
converted or exchanged by the Company.
"Initial Time Shares" means the Time Shares subject to vesting in
1998-99 in accordance with Schedule I, which account for 25% of the Shares.
"IPO" means the initial underwritten public offering of the Company's
equity securities pursuant to a registration statement under the Securities Act.
"Nextel" means NEXTEL Communications, Inc. and its successors and
assigns.
7
"Nextel Sub" means Nextel WIP Corp., a Delaware corporation and a
wholly owned indirect subsidiary of Nextel.
"Performance Shares" means, collectively, Build Shares, Revenue Shares
and EBITDA Shares.
"Permitted Holders" means, collectively, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and any entity
or entities (i) that is controlled directly or indirectly by ▇▇▇▇▇ ▇. ▇▇▇▇▇ or
the estate of ▇▇▇▇▇ ▇. ▇▇▇▇▇ and (ii) a majority of the equity interests of
which are owned, directly or indirectly, by ▇▇▇▇▇ ▇. ▇▇▇▇▇ and his family, his
brothers and their families, officers and employees of such entities, ex-spouses
of such persons and estates of, or trusts for the primary benefit of, the
foregoing persons (collectively, the "▇▇▇▇▇ Group"); provided that "Permitted
Holders" also includes a group of entities that is each controlled by
▇▇▇▇▇ ▇. ▇▇▇▇▇ or the estate of ▇▇▇▇▇ ▇. ▇▇▇▇▇ and through which the ▇▇▇▇▇ Group
collectively own, directly or indirectly, a majority of the equity interests of
Nextel (it being understood that if the ▇▇▇▇▇ Group collectively owns 50% of an
entity that owns 20% of Nextel's equity interests, the ▇▇▇▇▇ Group will be
deemed to indirectly own 10% of Nextel's equity interest though such entity).
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Purchaser" has the meaning set forth in the preamble.
"Required Build" means the Build Out of all Year One and Year Two Build
Areas in the Initial Sections (as such terms are defined in the Memorandum of
Agreement, dated as of May 1, 1998, among the Company, as successor in interest
to Wireless Investment Partners, L.L.C., Nextel Sub and Nextel, as amended by
the Commitment Letter).
"Revenue Shares" means Shares that vest in accordance with Schedule I
depending on the Company's achievement of the revenue-related performance
targets set forth on Annex A.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Managers" means, collectively, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ Aas, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇.
"Series A Preferred Stock" means the Series A Preferred Stock, par
value $.001 per share, of the Company.
8
"Series C Preferred Stock" means the Series C Preferred Stock, par
value $.001 per share, of the Company.
"Shares" has the meaning set forth in Section 2(a).
"Spectrum Price" means (i) prior to the IPO, the price per share of
Series C Preferred Stock or Class A Common Stock as determined by the Board from
time to time for purposes of sales of 800 MHz spectrum by Nextel Sub to the
Company, subject to challenge by the Purchaser in accordance with the same
procedures and other provisions applicable to challenges by Nextel Sub of such
determination and (ii) following an IPO, the average Closing Price of the
Class A Common Stock over the 20 consecutive Trading Days immediately preceding
any day of determination.
"Target Return" means, with respect to a sale or other disposition of
Initial DLJ Equity consummated (i) in 1999 or 2000, a 50% Adjusted IRR, (ii) in
2001, a 35% Adjusted IRR, and (iii) after 2001, a 30% Adjusted IRR, in each case
based on the value of the consideration paid for the Initial DLJ Equity sold or
otherwise disposed of.
"Time Shares" means Shares that vest over time in accordance with
Section 3(a) and Schedule I, and shall include the Initial Time Shares and the
Additional Time Shares.
"Total Common Equity" of any Person means, as of any day of
determination, the product of (i) the aggregate number of outstanding primary
shares of common stock of such Person on such day (which shall not include any
options or warrants on, or securities convertible or exchangeable into, shares
of Common Stock of such Person) and (ii) the average Closing Price of such
Common Stock over the 20 consecutive Trading Days immediately preceding such
day. If no such Closing Price exists with respect to shares of any such class,
the value of such shares for purposes of clause (ii) of the preceding sentence
shall be determined by the Board of Directors of such Person in good faith and
evidenced by a resolution of such Board of Directors.
"Trading Days" with respect to a securities exchange or automated
quotation system means a day on which such exchange or system is open for a full
day of trading.
"Unvested Shares" means Shares (including EBITDA Shares, Performance
Shares, Revenue Shares and Time Shares) that are not Vested Shares.
"Vested Shares" means Shares that are vested in accordance with
Section 3.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
2. Purchase and Sale.
9
(a) The Company hereby agrees to sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Company, an aggregate
of ______[FN1] shares of the Company's Class A Common Stock, par value $.001
per share (the "Shares"), at the price of $.01 per share.
(b) The Purchaser is delivering to the Company herewith a check payable
to the Company in the amount of the aggregate purchase price of the Shares, and
the Company is herewith delivering to the Escrow Agent, to be held in escrow as
herein provided, a duly executed certificate evidencing the Shares issued in the
name of the Purchaser.
(c) This Agreement shall not confer upon the Purchaser any right with
respect to continuation of his employment with the Company, nor shall it
interfere with or affect in any manner the right or power of the Company, or a
parent or subsidiary of the Company, to terminate any agreement with the
Purchaser in accordance with the terms thereof.
3. Vesting.
(a) Ordinary Vesting. The parties agree that 25% of the Shares shall
vest as Initial Time Shares, 25% of the Shares shall vest on December 31, 1999,
25% of the Shares shall vest on December 31, 2000 and 25% of the Shares shall
vest on December 31, 2001; provided that in the event of a Closing, from and
after the date thereof, the Shares shall vest in accordance with Schedule I so
long as the Purchaser is continuously employed by the Company or a subsidiary of
the Company, subject to the provisions of Section 3(b) below; provided, further
that the Company agrees and acknowledges that, from and after the date hereof,
___% [FN2] of the Initial Time Shares shall be Vested Shares for purposes of
this Agreement.
(b) Accelerated Vesting. Notwithstanding the provisions of Section 3(a)
or Schedule I to the contrary:
(i) In the event of a Closing, upon a Change in Control of the
Company or a Change in Control of Nextel, all of the Unvested Shares
(including Eligible Shares, but excluding Deferred Shares that are not
Eligible Shares) shall vest immediately.
(ii) Upon termination of the Purchaser's employment on account of
death or disability, or by the Company without Cause, (A) all of his
Unvested Time Shares shall vest immediately and (B) in the event of a
Closing, all of his Unvested Performance Shares that are subject to vesting
in the year of termination (including any Performance Shares vesting in such
year pursuant to Section 3(c)) shall vest at the end of such year without
regard to whether the Company achieves the applicable performance targets.
(iii) Upon resignation of the Purchaser for Good Reason, all of
his Unvested Shares shall vest immediately.
----------------------------
[1] ▇▇▇▇ ▇▇▇▇▇▇▇ 491,111
▇▇▇▇ ▇▇▇▇▇▇▇▇ 339,444
▇▇▇▇▇ Aas 162,500
▇▇▇▇▇ ▇▇▇▇▇▇ 195,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 137,222
▇▇▇▇ ▇▇▇▇▇▇▇ 137,222
[2] ▇▇▇▇ ▇▇▇▇▇▇▇ 100%
▇▇▇▇ ▇▇▇▇▇▇▇▇ 81.39%
▇▇▇▇▇ Aas 98.33%
▇▇▇▇▇ ▇▇▇▇▇▇ 72.78%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 64.44%
▇▇▇▇ ▇▇▇▇▇▇▇ 89.72%
10
(c) Vesting of Deferred Shares. In the event of a Closing and upon the
sale or other disposition by one or more of the DLJ Investors (other than to an
affiliate controlled by DLJ), in one or more transactions, of 75% of the Initial
DLJ Equity, if such DLJ Investors shall have achieved the applicable Target
Return in cash, promissory notes, freely tradable securities or other readily
marketable consideration, then 50% of the Deferred Shares will vest immediately.
For each additional one percent of Initial DLJ Equity sold or otherwise disposed
of at or above the applicable Target Return, an additional two percent of the
Deferred Shares will vest.
4. Repurchase Rights.
(a) Unvested Shares. Subject to the provisions of Section 3, in the
event of termination of the Purchaser's employment with the Company for any
reason or for no reason, the Company shall, for 90 days following the date of
termination, have the option to repurchase all or any portion of the Unvested
Shares at a repurchase price equal to the lesser of (i) Fair Market Value and
(ii) $.01 per share.
(b) Vested Shares/Termination on Account of Death or Disability. In the
event of termination of the Purchaser's employment with the Company on account
of death or disability prior to the IPO, for 180 days following the date of
termination (i) the Company shall have the option to purchase from the Purchaser
or his estate (and the Purchaser or his estate then shall be obligated to sell
to the Company) and (ii) the Purchaser shall have the option to require the
Company to purchase from the Purchaser or his estate, in each case all or any
portion of the Vested Shares at a repurchase price per share equal to Fair
Market Value.
(c) Vested Shares/Termination without Cause or Resignation for Good
Reason. In the event of termination of the Purchaser's employment with the
Company by the Company without Cause or by the Purchaser for Good Reason,
(i) prior to the IPO, for 90 days following the date of termination the Company
shall have the option to elect to purchase from the Purchaser (and the Purchaser
or his estate then shall be obligated to sell to the Company) all or any portion
of the Vested Shares at a repurchase price per share equal to Fair Market Value
(determined as of a date no more than ten days prior to the closing of such
repurchase), provided that the Purchaser shall have the right to elect, by
notice to the Company given within ten days after the Company's election to
purchase any of such Shares, to defer the closing of such purchase and sale for
up to 18 months following the date of termination, such purchase and sale to be
at a repurchase price per share equal to Fair Market Value (determined as of a
date no more than ten days prior to the closing of such repurchase), and
(ii) prior to the IPO, for 18 months following the date of termination the
Purchaser shall have the option to require the Company to purchase from the
Purchaser all or any portion of the Vested Shares at a repurchase price per
share equal to Fair Market Value (determined as of a date no more than ten days
prior to the closing of such repurchase), provided that in no event shall the
Company be required to repurchase more than $________ [FN3]in aggregate Fair
Market Value of Shares from the Purchaser pursuant to this clause (ii).
------------------
[3] ▇▇▇▇ ▇▇▇▇▇▇▇ $5,000,000.00
▇▇▇▇ ▇▇▇▇▇▇▇▇ $3,455,878.50
▇▇▇▇▇ Aas $1,654,412.14
▇▇▇▇▇ ▇▇▇▇▇▇ $1,985,294.57
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $1,397,056.88
▇▇▇▇ ▇▇▇▇▇▇▇ $1,397,056.88
11
(d) Vested Shares/Termination for Cause or Resignation without Good
Reason. In the event of termination of the Purchaser's employment with the
Company by the Company for Cause or by the Purchaser without Good Reason, for 90
days following the date of termination the Company shall have the option to
purchase from the Purchaser all or any portion of the Vested Shares (i) if there
has been no Closing, at a repurchase price per Share equal to Fair Market Value,
and (ii) if there has been a Closing, at a repurchase price per share equal
(A) in the case of the Initial Time Shares, Fair Market Value, and (B) in the
case of Shares other than the Initial Time Shares, (x) prior to the completion
of the Required Build, the lesser of Fair Market Value and $.01 per share, (y)
after completion of the Required Build, but prior to the fourth anniversary of
the Closing, 50% of Fair Market Value, and (z) after completion of the Required
Build, and on and after the fourth anniversary of the Closing, 100% of Fair
Market Value.
(e) Exercise by the Company. Any repurchase by the Company pursuant to
this Section 4 shall be exercisable by written notice to the Purchaser or his
executor (with a copy to the Escrow Agent) given within the applicable time
period, and such notice if given shall constitute an irrevocable offer by the
Company to repurchase the Shares covered thereby. Such notice shall set forth
the number of Shares to be repurchased and the aggregate repurchase price
thereof, as determined by the Board in good faith as of a date no more than ten
days prior to such repurchase. Within five days after delivery of such notice,
upon delivery by the Escrow Agent to the Company of the Shares being
repurchased, together with one or more related stock powers executed by the
Purchaser in blank, and upon receipt by the Company of a representation by the
Purchaser that he owns the Shares being repurchased, the Company shall pay to
the Purchaser in immediately available funds an amount equal to the aggregate
repurchase price of the Shares being repurchased.
(f) Exercise by the Purchaser. The Purchaser's right to require the
Company to repurchase Shares under Section 4(b) or (c) shall be exercisable by
written notice to the Company (with a copy to the Escrow Agent) given within the
applicable time period, and such notice if given shall constitute an irrevocable
offer by the Purchaser to sell the Shares covered thereby. Within five days
after receipt of such notice (i) the Company shall pay to the Purchaser in
immediately available funds (or as otherwise may be determined in accordance
with this Agreement) an amount equal to the aggregate repurchase price of the
Shares being repurchased and (ii) the parties agree that the Escrow Agent shall
deliver to the Company the certificate(s) for the Shares being repurchased,
together with one or more related stock powers executed by the Purchaser in
blank, which certifi cate(s) and power(s) are held by the Escrow Agent pursuant
to Section 5(a); provided that in the event of a repurchase of Shares pursuant
to Section 4(c)(ii), the Company shall have the option of paying the repurchase
price (i) in a single lump sum or (ii) in annual installments of $2 million so
long as the outstanding balance of the aggregate repurchase price is $2 million
or more, with the first installment payable within five days after delivery of
the Company's notice of repurchase and the final installment being equal to the
outstanding balance of the aggregate repurchase price; provided, further that if
the Board determines (pursuant to a duly adopted resolution of the Board or its
compensation committee, a copy of which shall be delivered to the Purchaser)
that the Company is unable to repurchase all or some portion of such Shares for
cash without breaching the terms of its debt instruments, or that such
repurchase would otherwise have a material adverse effect on the
12
financial condition of the Company, the Company will pay in cash the maximum
amount permitted under such debt instruments, or that would not result in such a
material adverse effect, and deliver to the Purchaser a promissory note for the
balance, payable as soon as (and in the maximum amounts that) the terms of such
debt instruments will permit or that will not have such a material adverse
effect, but in no event later than five years after the date of issuance,
bearing interest at the highest rate charged from time to time under the
Company's senior credit facility, secured by the Shares being repurchased
reasonably satisfactory to the Company and the Purchaser. The Purchaser agrees
that the Shares being repurchased, when so transferred to the Company, will be
free and clear of all liens, claims, encumbrances and charges caused or created
by the Purchaser.
(g) Notwithstanding anything herein to the contrary, if, prior to
completion of the Required Build, the Purchaser (i) resigns without Good Reason
or his employment with the Company is terminated for Cause and (ii) is employed
by a wireless voice communications service provider that competes (at the time
of commencement of his employment with such entity) in any of the markets of
Nextel or the Company, the Purchaser shall (upon the commencement of his
employment with such entity) refund in cash to the Company an amount equal to
the excess (if any) of (x) the price paid by the Company for any Shares
repurchased by the Company upon his termination over (y) the price paid by the
Purchaser for such Shares pursuant to this Agreement.
5. Escrow of Shares.
(a) Shares that are subject to repurchase by the Company pursuant to
Section 4 (collectively, "Escrowed Shares") shall be held in escrow by the
Secretary of the Company as escrow agent (the "Escrow Agent") together with one
or more stock powers executed by the Purchaser in blank and in form legally
sufficient to effect the transfer of such Shares. Shares that are no longer
subject to repurchase by the Company pursuant to Section 4 shall be released
from escrow at the Purchaser's request, and the Escrow Agent shall promptly
cause a new certificate to be issued for such released Shares and shall deliver
such certificate to the Purchaser.
(b) The Escrow Agent is hereby directed to permit transfers of Escrowed
Shares only in accordance with this Agreement or upon receipt of instructions
signed by both parties. In the event further instructions are desired by the
Escrow Agent, he shall be entitled to rely upon directions executed by a
majority of the authorized number of the Company's directors (excluding the
Purchaser if he is then a member of the Board). The Escrow Agent shall have no
liability for any act or omission hereunder while acting in good faith in the
exercise of his own judgment, and shall be entitled to indemnification from the
Company to the full extent permitted by applicable law in respect of his service
as Escrow Agent.
(c) If the Company or any assignee repurchases Shares pursuant to
Section 4, the Escrow Agent, upon receipt of written notice of such exercise
from the proposed transferee, shall take all steps necessary to accomplish such
transfer.
13
(d) Subject to the terms hereof, the Purchaser and each of his
permitted assigns shall, as a record owner of Shares, have all the rights of a
stockholder with respect to the Escrowed Shares while they are held in escrow,
including without limitation, the right to vote the Escrowed Shares and to
receive any cash dividends and other distributions declared thereon, provided
that any such dividends or distributions shall be immediately deposited with the
Escrow Agent to be held in escrow together with the Escrowed Shares in
accordance with this Section 5. If, from time to time prior to the termination
of the Company's repurchase rights, there is (i) any stock dividend, stock split
or like change in the Shares or (ii) any merger or sale of all or substantially
all of the assets or other acquisition of the Company, any and all new,
substituted or additional securities to which the Purchaser is entitled by
reason of his ownership of Escrowed Shares shall be immediately subject to this
escrow, deposited with the Escrow Agent and included thereafter as "Escrowed
Shares" for purposes of this Agreement.
6. Legends; Transfer Restrictions.
(a) The certificates evidencing the Shares shall be endorsed with the
following legend (and any other legend required to be placed thereon by
applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES
ACT OF 1933.
In addition, the certificates evidencing the Escrowed Shares shall be
endorsed with the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
(b) Except as otherwise permitted by, and subject to the provisions of
each of, this Agreement, any stockholders' agreement to which the Purchaser is a
party, the restated certificate of incorporation of the Company, as amended from
time to time, or the Purchaser's employment agreement with the Company or a
subsidiary of the Company, none of the Escrowed Shares (or any beneficial
interest therein) shall be transferred, encumbered or otherwise disposed of in
any way.
7. Adjustments for Splits, Etc. All references to the number of Shares
and the purchase price of the Shares in this Agreement shall be automatically
adjusted to reflect any stock split, stock dividend or like change in the shares
of Class A Common Stock which may be made by the Company after the date of this
Agreement.
14
8. Investment Representations; Restriction on Transfer. In connection
with the purchase of the Shares, the Purchaser represents to the Company the
following:
(a) He is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Shares. He is purchasing
these securities for investment for his own account only and not with a view to,
or for resale in connection with, any "distribution" thereof within the meaning
of the Securities Act.
(b) He understands that the Shares have not been registered under the
Securities Act by reason of a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of his investment intent
as expressed herein. In this connection, he understands that, in the view of the
SEC, the statutory basis for such exemption may not be present if his
representations meant that his present intention was to hold these securities
for a minimum capital gains period under the tax statutes, for a deferred sale,
for a market rise, for a sale if the market does not rise, or for a year or any
other fixed period in the future.
(c) He further acknowledges and understands that the Shares must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. He understands that the
certificate evidencing the Shares will be imprinted with a legend which
prohibits the transfer of the Shares unless they are registered or such
registration is not required in the opinion of counsel for the Company.
(d) The Purchaser is an "accredited investor" within the meaning of
Regulation 501 under the Securities Act of 1933, as amended, in that he is an
"executive officer" as defined in Regulation 501 or otherwise is an "accredited
investor", the Purchaser is aware that the Company is a "development stage"
company with no significant business operations or history and may be dependent
for its future success on matters that cannot now be foreseen or predicted, and
the Purchaser is not making this investment in the Company based on any
representation or warranty made to him by the Company.
(e) The Purchaser's financial situation is such that the Purchaser can
afford to bear the economic risk of holding the Shares acquired hereunder for an
indefinite period of time, the Purchaser has adequate means for providing for
his needs and contingencies and can afford to suffer the complete loss of the
investment in the Shares.
(f) The Purchaser's knowledge and experience in financial and business
matters are such that he is capable of evaluating the merits and risks of the
investment in the Shares, or the Purchaser has been advised by a representative
possessing such knowledge and experience.
(g) The Purchaser understands that the Shares acquired hereunder are a
speculative investment which involves a high degree of risk of loss of the
entire investment therein, that there are substantial restrictions on the
transferability of the Shares, and that for an indefinite
15
period following the date hereof there will be no (or only a limited) public
market for the Shares and that, accordingly, it may not be possible for
Purchaser to sell the Shares in case of emergency or otherwise.
(h) The Purchaser and his representatives, including his professional,
financial, tax and other advisors, have carefully reviewed all documents
available to them in connection with the investment in the Shares, and the
Purchaser understands and has taken cognizance of all the risks related to such
investment.
(i) The Purchaser and his representatives have been given the
opportunity to examine all documents and to ask questions of, and to receive
answers from, the Company and its representatives concerning the terms and
conditions of the acquisition of the Shares and related matters and to obtain
all additional information which the Purchaser or his representatives deem
necessary.
(j) All information that the Purchaser has provided to the Company and
its representatives concerning the Purchaser and his financial position is true,
complete and correct.
9. General Provisions.
(a) This Agreement shall be governed by the internal laws of the State
of Delaware without regard to conflicts of law principles.
(b) This Agreement represents the entire agreement between the parties
with respect to the purchase of the Shares by the Purchaser and may be modified
or amended only by a writing signed by both parties.
(c) All notices given hereunder shall be in writing and shall be deemed
to have been duly given and received (i) when delivered personally, with receipt
acknowledged in writing by the recipient, (ii) on the tenth business day after
being sent by registered or certified mail (postage paid, return receipt
requested), (iii) one business day after being sent by a reputable overnight
delivery service, postage or delivery charges prepaid, or (iv) on the date on
which a facsimile is transmitted, in each case to the parties at their
respective addresses stated below; provided, that if the intended recipient of
any notice hereunder refuses to acknowledge receipt thereof in writing, such
notice shall be deemed to have been duly given on the date of such refusal. Any
party may change its address for notice by giving notice of the new address to
the other party in accordance with the provisions of this paragraph.
16
If to the Company:
Nextel Partners, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Nextel WIP Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Executive:
Nextel Partners, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
[Home Address]
(d) The rights and obligations of the Purchaser under this Agreement
may be assigned only with the prior written consent of the Company.
(e) Either party's failure to enforce any provision of this Agreement
shall not in any way be construed as a waiver of any such provision, nor prevent
that party thereafter from enforcing each and every other provision of this
Agreement. The rights granted both parties herein are cumulative and shall not
constitute a waiver of either party's right to assert all other legal remedies
available to it under the circumstances.
(f) Each party agrees, upon the reasonable request of the other party,
to execute any further documents or instruments necessary or desirable to carry
out the purposes or intent of this Agreement.
(g) Except as otherwise provided herein, any controversies or claims
arising out of, or relating to this Agreement or the breach thereof, shall be
settled by arbitration in accordance with the commercial rules of the American
Arbitration Association, which decision shall be final and
17
binding on the parties, and judgment upon the award rendered shall be entered in
any court having jurisdiction thereof. Any party may demand such arbitration in
accordance with the procedures set out in those rules. The arbitration shall be
conducted in New York, New York, or such other location as may be mutually
agreed upon by the parties. Special, consequential, or punitive damages shall
not be awarded by the arbitrator. In the event of any arbitration proceeding
hereunder, the Company will (x) pay the fees and expenses of the arbitrator and
(y) advance the Purchaser's documented out-of-pocket costs (including reasonable
counsel fees and expenses) on a current basis, provided, that if the Purchaser
is determined not to be the substantially prevailing party on the matters
submitted for arbitration (which determination shall be made by the arbitrator
and included in his or her decision), the Purchaser will promptly reimburse the
Company for any expenses so advanced. The Purchaser acknowledges that the
Company is agreeing to make advances to him pursuant to the preceding sentence
in consideration of his agreement to reimburse the Company for any such advances
to the extent required by the preceding sentence. The Company will in all events
pay its own costs (including counsel fees and expenses) in connection with any
arbitration proceeding hereunder.
(h) The Purchaser understands that he (and not the Company) shall be
responsible for his own federal, state, local or foreign tax liability and any
of his other tax consequences that may arise as a result of the transactions
contemplated by this Agreement. The Purchaser shall rely solely on the
determinations of his tax advisors or his own determinations, and not on any
statements or representations by the Company or any of its agents, with regard
to all such tax matters. The Purchaser shall notify the Company and Nextel
Partners Operating Corp. in writing if the Purchaser files an election pursuant
to Section 83(b) of the Internal Revenue Code of 1986, as amended, with the
Internal Revenue Service within 30 days from the date of the sale of the Shares
hereunder; and the Company shall file its tax returns and reports in a manner
consistent with such election, provided that such election is made on the basis
disclosed to the Company. The Company intends, in the event it does not receive
from the Purchaser evidence of a proper filing, to claim a tax deduction for and
to calculate and withhold taxes on any amount which would be taxable to the
Purchaser in the absence of such an election.
(i) To the extent legally required, the Company shall have the right
and is authorized to withhold from any payments due or transfers in connection
with the purchase of the Shares hereunder or from any compensation or other
amount owing to the Purchaser the amount (in cash, Shares, other securities or
other property) of any applicable withholding taxes in respect of the Shares and
to take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes, if applicable.
* * *
18
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
NEXTEL PARTNERS, INC.
By
--------------------------------------
Name:
Title:
--------------------------------------
[PURCHASER]
Agreed to and accepted by:
--------------------------------------
[SPOUSE OF PURCHASER]