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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 30, 1998
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WESTOWER CORPORATION
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(Exact name of registrant as specified in its charter)
Washington 1-132963 91-1825860
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
7001 N.E. 40th Avenue, Vancouver, Washington 98661
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (360) 750-9355
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
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On October 30, 1998, Westower Corporation (the "Company") completed the
acquisition of Teletronics Management Services, Inc., a Washington corporation
("Teletronics"), pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") with Teletronics, Teletronics' shareholders (the "Shareholders"),
and Westower Teletronics Acquisition Corp., a Washington corporation and a
wholly-owned subsidiary of the Company ("Sub"). Pursuant to the terms of the
Merger Agreement, Sub was merged with and into Teletronics. Teletronics,
headquartered in Seattle, Washington, provides telecommunications tower
consulting services. Under the terms of the Merger Agreement, the total
consideration paid at closing by the Company to the Shareholders was $1,000,000
in cash and 188,076 shares of Westower Common Stock, par value $.01 per share.
The merger price was determined by arms-length negotiations between the parties.
The cash portion of the merger price was paid out of the Company's cash on hand.
The foregoing description is qualified in its entirety by reference to the
Merger Agreement, a copy of which is attached hereto as Exhibit 99.
Item 7. Exhibits.
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99 Agreement and Plan of Merger, dated as of October 23, 1998, among Westower
Corporation, Westower Teletronics Acquisition Corp., Teletronics Management
Services, Inc. and the Shareholders of Teletronics Management Services,
Inc.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTOWER CORPORATION
Date: November 12, 1998 By: /s/ Peter Lucas
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Peter Lucas, Senior Vice President,
Chief Financial Officer, Treasurer
and Secretary
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Exhibit Index
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Exhibit
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99 Agreement and Plan of Merger, dated as of October 23, 1998, among Westower
Corporation, Westower Teletronics Acquisition Corp., Teletronics Management
Services, Inc. and the Shareholders of Teletronics Management Services,
Inc.
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Exhibit 99
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WESTOWER CORPORATION,
WESTOWER TELETRONICS ACQUISITION CORP.,
TELETRONICS MANAGEMENT SERVICES, INC.,
AND
THE SHAREHOLDERS OF TELETRONICS MANAGEMENT SERVICES, INC.
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TABLE OF CONTENTS
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ARTICLE 1. THE MERGER....................................................................... 1
1.1 Merger........................................................................... 1
1.2 Articles of Incorporation........................................................ 2
1.3 Bylaws........................................................................... 2
1.4 Directors and Officers........................................................... 2
ARTICLE 2. CONVERSION AND EXCHANGE OF STOCK................................................. 2
2.1 Merger Terms..................................................................... 2
2.2 Closing.......................................................................... 2
ARTICLE 3. DEFAULT.......................................................................... 3
3.1 Default at Closing............................................................... 3
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THETELETRONICS ENTITIES AND THE SHAREHOLDERS... 3
4.1 Organization Standing and Qualification.......................................... 3
4.2 Capitalization................................................................... 4
4.3 Stock Ownership.................................................................. 4
4.4 No Subsidiaries, Partnerships or Joint Ventures.................................. 4
4.5 Financial Statements............................................................. 4
4.6 Title to Properties.............................................................. 4
4.7 Tax Matters...................................................................... 5
4.8 Litigation and Labor Matters..................................................... 6
4.9 Patents, Trademarks, and Copyrights.............................................. 6
4.10 Contracts and Commitments........................................................ 6
4.11 Absence of Undisclosed Liabilities............................................... 8
4.12 Existing Condition............................................................... 8
4.13 Validity of Contemplated Transactions............................................ 8
4.14 Licenses and Permits............................................................. 8
4.15 Transactions with Affiliates..................................................... 8
4.16 Bank Accounts, Directors and Officers............................................ 8
4.17 Employees of the Teletronics Entities............................................ 9
4.18 Employee Benefit Plans........................................................... 9
4.19 Investment Representations....................................................... 10
4.20 Information Related to Westower.................................................. 10
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF WESTOWER AND SUB............................... 11
5.1 Organization and Existence....................................................... 11
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5.2 Power and Authority.............................................................. 11
5.3 Authorization.................................................................... 11
5.4 Binding Effect................................................................... 11
5.5 Capitalization................................................................... 12
5.6 Westower Stock................................................................... 12
5.7 Westower Financial Statements.................................................... 12
5.8 No Default....................................................................... 12
5.9 No Consents...................................................................... 12
5.10 No Knowledge of the Shareholder's Default........................................ 12
5.11 Filings with the SEC............................................................. 12
5.12 Subsequent Events; Investment Information........................................ 13
5.13 Full Disclosure.................................................................. 13
5.14 Tax-Free Merger.................................................................. 13
5.15 No Redemptions................................................................... 13
5.16 Creation and Control of Sub...................................................... 13
5.17 Issuance of Teletronics Shares................................................... 14
5.18 Continuation of Teletronics...................................................... 14
5.19 Not Investment Company........................................................... 14
5.20 Reliance......................................................................... 14
ARTICLE 6. COVENANTS........................................................................ 14
6.1 Business in the Ordinary Course.................................................. 14
6.2 Accounting and Credit Changes.................................................... 14
6.3 Capitalization, Options and Dividends............................................ 14
6.4 Encumbrance of Assets............................................................ 15
6.5 Employment Agreements............................................................ 15
6.6 Access........................................................................... 15
6.7 Good Will........................................................................ 15
6.8 Exclusive Rights to Westower..................................................... 15
6.9 Election to Close Books.......................................................... 15
ARTICLE 7. POST-CLOSING COVENANTS........................................................... 15
7.1 Stock Plans...................................................................... 15
7.2 Personal Guarantees.............................................................. 16
7.3 Registration Rights.............................................................. 16
7.4 Employment Agreements........................................................... 16
7.5 Covenant Not to Compete.......................................................... 16
7.6 Audit............................................................................ 18
7.7 Westower Stock................................................................... 18
ARTICLE 8. INDEMNIFICATION.................................................................. 20
8.1 Indemnification by the Shareholders.............................................. 20
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8.2 Indemnification by Westower...................................................... 20
8.3 Indemnification Procedure for Third-Party Claims................................. 21
8.4 Walker Ranch Tower Accident...................................................... 21
ARTICLE 9. CONDITIONS PRECEDENT TO WESTOWER'S AND SUB'S OBLIGATIONS......................... 22
9.1 Representations and Warranties................................................... 22
9.2 Compliance with Agreements....................................................... 22
9.3 Opinion of Counsel............................................................... 22
9.4 Material Damage.................................................................. 23
9.5 Employment Agreements............................................................ 23
ARTICLE 10. CONDITIONS PRECEDENT TO TELETRONICS' AND SHAREHOLDERS' OBLIGATIONS............... 23
10.1 Representations and Warranties................................................... 23
10.2 Compliance with Agreements....................................................... 24
10.3 Opinion of Counsel............................................................... 24
10.4 Material Damage.................................................................. 24
10.5 Agreements....................................................................... 24
10.6 Listing of Westower Stock........................................................ 24
ARTICLE 11. MISCELLANEOUS.................................................................... 24
11.1 Broker Fees...................................................................... 24
11.2 Survival of Representations and Warranties....................................... 24
11.3 Knowledge........................................................................ 25
11.4 Materiality...................................................................... 25
11.5 Expenses......................................................................... 25
11.6 Announcements.................................................................... 25
11.7 Further Actions and Assurances................................................... 25
11.8 Counterparts..................................................................... 25
11.9 Contents of Agreement; Parties in Interest....................................... 25
11.10 Washington Law to Govern......................................................... 25
11.11 Section Headings and Gender...................................................... 26
11.12 Schedules........................................................................ 26
11.13 Notices.......................................................................... 26
11.14 Confidential Information......................................................... 27
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is entered as of the 23rd day of October,
1998 by and among WESTOWER CORPORATION, a Washington corporation ("Westower"),
WESTOWER TELETRONICS ACQUISITION CORP., a Washington corporation and wholly-
owned subsidiary of Westower ("Sub"), TELETRONICS MANAGEMENT SERVICES, INC., a
Washington corporation ("Teletronics"), and the undersigned holders of capital
stock of Teletronics (each a "Shareholder" and together the "Shareholders").
RECITALS:
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A. The Shareholders are the holders of all of the issued and outstanding
shares of capital stock of Teletronics, par value $.01 per share (the
"Teletronics Shares"), and the holders of all the issued and outstanding shares
of capital stock (the "Realty Shares") of Teletronics Realty Services, Inc., a
Washington corporation ("Realty" and together with Teletronics the "Teletronics
Entities").
B. The respective boards of directors of Westower, Sub and Teletronics
deem it advisable and in the best interest of Sub and Teletronics and their
respective shareholders, that Sub merge with and into Teletronics (the "Merger")
pursuant to this Agreement and Plan of Merger and the applicable provisions of
the laws of the State of Washington.
C. Immediately prior to the Merger, the Shareholders will contribute all
the Realty Shares owned by them to Teletronics.
D. Westower, Sub and Teletronics intend the Merger to be a reorganization
within the meaning of Internal Revenue Code (S) 368(a).
AGREEMENTS
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NOW, THEREFORE, in consideration of the recitals and of the respective
covenants, representations and agreements herein contained, it is hereby
covenanted and agreed by and among the parties that they shall carry out and
consummate the following Agreement and Plan of Merger (the "Agreement"):
ARTICLE 1.
THE MERGER
1.1 Merger. Upon the filing of Articles of Merger with the Secretary of
State of the State of Washington, in the form attached to this Agreement as
Exhibit 1.1, Sub shall be merged with and into Teletronics pursuant to this
Agreement, the separate existence of Sub shall cease, and Teletronics shall
survive as a corporation organized under and governed by the laws of the State
of
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Washington. Teletronics, as it exists from and after the Merger, is sometimes
referred to as the "Surviving Corporation."
1.2 Articles of Incorporation. The Articles of Incorporation of the
Surviving Corporation in effect immediately prior to the Merger shall continue
in full force and effect and remain the Articles of Incorporation of the
Surviving Corporation until the same shall be altered, amended or repealed in
accordance with applicable law.
1.3 Bylaws. The Bylaws of Sub in effect immediately prior to the Merger
shall be the Bylaws of the Surviving Corporation until amended in accordance
with applicable law.
1.4 Directors and Officers. The Board of Directors of the Surviving
Corporation shall initially consist of Peter T. Holland, Brent Wysocki, Calvin
J. Payne, S. Roy Jeffrey and Peter Lucas, who shall hold office in each case in
accordance with the Bylaws of the Surviving Corporation. The initial officers
of the Surviving Corporation shall be:
Peter T. Holland President
Brent Wysocki Vice President
Peter Lucas Vice President, Treasurer and
Secretary
Each officer shall hold office as provided in the Bylaws of the Surviving
Corporation.
ARTICLE 2.
CONVERSION AND EXCHANGE OF STOCK
2.1 Merger Terms. The consideration to be paid to the Shareholders in the
Merger (the "Merger Consideration") shall consist of cash and shares of common
stock, par value $.01 per share, of Westower ("Westower Stock"). In the Merger,
each outstanding Teletronics Share shall be converted into and become the right
to receive: (a) $1,000 in cash; plus (b) 188.076 shares of Westower Stock. No
fractional shares of Westower Stock will be issued. The number of shares to be
issued to any Shareholder will be rounded downward to the nearest whole share
and cash will be paid in lieu of any fraction based upon at the closing price of
Westower Stock on the American Stock Exchange ("Amex") on the trading day
immediately prior to the Closing Date (hereinafter defined). Each outstanding
share of Sub shall be converted into and become one share of common stock of the
Surviving Corporation.
2.2 Closing. The closing (the "Closing") of the Merger shall take place
at the offices of Morgan, Lewis & Bockius LLP, 2000 One Logan Square,
Philadelphia, Pennsylvania 19103 at 2:00 p.m. on the date of execution and
delivery of this Agreement or on such other date as the parties hereto may
mutually agree upon (the "Closing Date"). At the Closing, the Shareholders
shall deliver, (i) free and clear of all liens and encumbrances, claims and
other charges thereon of every
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kind, the certificate(s) representing the Teletronics Shares in negotiable form,
duly endorsed in blank or with separate stock transfer powers attached; (ii)
signed Employment Agreements, as described in Section 7.4 of this Agreement;
(iii) a signed Registration Rights Agreement, as described in Section 7.3 of
this Agreement; (iv) the signed Articles of Merger, as described in Section 1.1
of this Agreement; and (v) the other deliveries required by this Agreement. At
the Closing, Westower shall deliver (i) the cash portion of the Merger
Consideration, in immediately available funds; (ii) the number of shares of
Westower Stock determined under Section 2.1 of this Agreement, free and clear of
all liens and encumbrances, claims and charges thereon of every kind but subject
to the restrictions set forth in Section 7.7, represented by certificates or an
irrevocable direction to Westower's transfer agent to deliver such shares; (iii)
a signed Registration Rights Agreement, as described in Section 7.3 of this
Agreement; (iv) signed Employment Agreements, as described in Section 7.4 of
this Agreement; (v) the signed Articles of Merger, as described in Section 1.1
of this Agreement; and (vi) the other deliveries required by this Agreement. If
certificates for the Westower Stock are not delivered at Closing, certificates
shall be delivered to the Shareholders as soon as they are made available by
Westower's transfer agent.
ARTICLE 3.
DEFAULT
3.1 Default at Closing. If Teletronics or any of the Shareholders, on one
hand, or Westower and Sub, on the other hand, fails or refuses to consummate the
transactions described in this Agreement, the other party at its option, may
refuse to complete the transaction and thereby terminate all of its obligations
hereunder. Such refusal shall not limit (i) any remedies available to the
parties for breach of this Agreement and (ii) any remedies available to the
parties pursuant to the Escrow Agreement dated August 31, 1998 among Chase
Manhattan Bank and Trust Company, N.A., Teletronics and Westower.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF THE
TELETRONICS ENTITIES AND THE SHAREHOLDERS
To induce Westower and Sub to enter into this Agreement and consummate the
transactions contemplated hereby, the Teletronics Entities (except as to
Sections 4.19 and 4.20) and each of the Shareholders severally and not jointly
represent and warrant to Westower and Sub that the statements contained in this
Article 4 are true and complete:
4.1 Organization Standing and Qualification. The Teletronics Entities are
corporations duly organized, validly existing and in good standing under the
laws of the State of Washington, and have all requisite corporate power and
authority to perform their businesses as presently conducted and to own and
lease the properties used in connection therewith. A complete and correct copy
of the Articles of Incorporation and all amendments thereto of the
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Teletronics Entities certified by the Secretary of State of Washington and a
complete and correct copy of their Bylaws and all amendments thereto, certified
by their Secretary, have been delivered to Westower. The Teletronics Entities
are duly qualified to do business and are in good standing to do business as a
foreign corporation in California, Florida and Texas (and Teletronics is also
qualified in Illinois and Nevada), which constitute all jurisdictions in which
the failure to so qualify would have a material adverse effect on their
businesses or the ownership of their property.
4.2 Capitalization. The total authorized capital stock of Teletronics
consists of 10,000 shares of common stock, par value $.01 per share, of which
1,000 shares are outstanding and 500 shares are held by Peter T. Holland and 500
shares are held by Brent Wysocki. All of the Teletronics Shares are validly
issued, fully paid and non-assessable.
4.3 Stock Ownership. The Shareholders are the lawful owners of record and
beneficially of the number of Teletronics Shares set forth in Section 4.2, free
and clear of all liens and encumbrances, claims and charges of every kind.
4.4 No Subsidiaries, Partnerships or Joint Ventures. Neither of the
Teletronics Entities owns any equity interest in any corporation, joint venture,
partnership or other entity.
4.5 Financial Statements. Attached hereto as Schedule 4.5 are copies of
the following financial statements:
(a) Balance sheets. Balance sheets of each of the Teletronics
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Entities as of September 30, 1998 (the "Balance Sheet Date") (unaudited) and
December 31, 1997 (unaudited), which balance sheets together with any notes to
the financial statements present fairly the financial condition and assets and
liabilities of the Teletronics Entities as of their respective dates in
accordance with generally accepted accounting principles consistently applied
except as may be otherwise disclosed therein. The balance sheets as of September
30, 1998 is hereinafter referred to as the "1998 Balance Sheets."
(b) Statements of Income, etc. A statement of income of each of the
--------------------------
Teletronics Entities for the period ended September 30, 1998 (unaudited) and
statements of income, changes in Shareholders' equity and cash flows of each of
the Teletronics Entities for the year ended December 31, 1997 (unaudited), which
statements, together with any notes to the respective financial statements
present fairly the income, changes in shareholders' equity and cash flows of the
Teletronics Entities for such periods in accordance with generally accepted
accounting principles consistently applied except as may be otherwise disclosed
therein.
4.6 Title to Properties. The Teletronics Entities have good and
marketable title to all of their properties and assets reflected in the 1998
Balance Sheets (except properties and assets sold or otherwise disposed of since
the Balance Sheet Date in the normal and ordinary course of business), free and
clear of all mortgages, liens, pledges, charges or other encumbrances of any
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nature whatsoever, except (i) any mortgages, liens, pledges, charges or other
encumbrances disclosed in the 1998 Balance Sheets; (ii) liens for current taxes
not yet due and payable, or (iii) encumbrances disclosed in Schedule 4.6.
Except as set forth on Schedule 4.6, the Teletronics Entities neither own nor
formerly owned any real estate.
4.7 Tax Matters. Except as set forth in the attached Schedule 4.7:
(a) The Teletronics Entities have timely filed all Tax Returns (as
hereinafter defined) that they were required to file. All such Tax Returns were
correct and complete, and all Taxes (as hereinafter defined) owed by the
Teletronics Entities shown on any Tax Return for periods ending on or before
August 31, 1998 have been paid or properly accrued on the 1998 Balance Sheets.
(b) The Teletronics Entities have complied with all laws relating to
the withholding of Taxes.
(c) The Teletronics Entities have not filed a consent agreement under
Section 341(f) of the Internal Revenue Code of 1986, as amended (the "Code").
(d) The Teletronics Entities are not a real property holding company
under Section 897 of the code.
(e) There is no outstanding unresolved Tax deficiency of either of the
Teletronics Entities, and no Tax Returns filed with respect to either of the
Teletronics Entities currently are the subject of an audit.
(f) The Teletronics Entities have not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(g) The Teletronics Entities are not a party to any tax-sharing
agreement and have no liability for the tax obligations of any other taxpayer.
(h) Each of the Teletronics Entities has made a valid election to be
treated as an S corporation within the meaning of Section 1361 of the Code ("S
Corporation"), and such election has been in effect for each of their taxable
years. Each of the Teletronics Entities has qualified and will qualify as an S
Corporation at all times up to and including the Closing Date. Neither of the
Teletronics Entities has been nor will be subject to any taxes pursuant to
Section 1363 (d) or Section 1374 of the Code at any time up to and including the
Closing Date.
For purposes of this Agreement, "Tax" means any federal, state, local, or
foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Code section 59A), customs duties, capital
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stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
For purposes of this Agreement, "Tax Return" means any return, declaration,
report, claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
4.8 Litigation and Labor Matters. Except as disclosed in Schedule 4.8
hereto:
(a) There is no litigation, proceeding or governmental investigation
pending or, to the knowledge of the Teletronics Entities, threatened against
either of the Teletronics Entities, their properties or their business; and
(b) The Teletronics Entities have not committed, and have not received
any notice of or claim that either of the Teletronics Entities have committed,
any unfair labor practice under applicable federal or state law.
4.9 Patents, Trademarks, and Copyrights. Schedule 4.9 attached hereto
sets forth all patents, patent applications, registered trademarks, registered
service marks, trademarks and service mark applications, unregistered trademarks
and service marks, copyrights and copyright applications, owned or filed by the
Teletronics Entities or in which the Teletronics Entities have an interest and
the nature of such interest. No other patent, trademark, service mark,
copyright or license is necessary to permit the business of the Teletronics
Entities to be conducted as they are now conducted. To the knowledge of the
Teletronics Entities, and except as disclosed on Schedule 4.9, no person, firm
or corporation has any proprietary, financial or other interest in any such
patents, patent applications, registered trademarks, registered service marks,
trademarks and service mark applications, unregistered trademarks and service
marks, copyrights and copyright applications. To the knowledge of the
Teletronics Entities, they are not infringing on any patent, trademark, or
service mark or copyright or otherwise violating the intellectual property
rights of any third party.
4.10 Contracts and Commitments. Except as listed and identified in
Schedule 4.10 hereto or contemplated by this Agreement, neither of the
Teletronics Entities is a party to any written or oral:
(a) contract or commitment with any employer, former director or
employee or consultant;
(b) contract or commitment with any labor union or employee group;
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(c) contract or commitment for the future purchase of, or payment for,
raw materials, supplies or products that individually total $10,000 or more;
(d) contract or commitment to sell or supply products or to perform
services that individually total $10,000 or more without the ability on the part
of the Teletronics Entity to increase such price or to cancel the contract or
commitment without any liability on the part of the Teletronics Entity;
(e) contract or commitment continuing over a period of more than six
months from the date of this Agreement;
(f) lease under which it is either lessor or lessee (and other than
the assets leased pursuant to leases listed on Schedule 4.10, there are no other
material assets or properties necessary or utilized in the business and
operations of the Teletronics Entities that are not owned by the Teletronics
Entity);
(g) bonus, pension, profit sharing, retirement, stock purchase, stock
option hospitalization, insurance, vacation pay or any similar plan or practice,
including but not limited to any welfare benefit plan as defined in the Employee
Retirement Income Security Act of 1974 ("ERISA"), formal or informal, in effect
with respect to any of the Teletronics's Entities' employees or former employees
(collectively, the "Plans");
(h) contract or commitment for the borrowing of money or other
agreement or arrangement for a line of credit;
(i) contract or commitment for any charitable contribution;
(j) contract or commitment for capital expenditures in excess of
$10,000;
(k) contract or commitment for limiting or restraining it from
engaging in any lines of business with any person, firm, corporation or any
other entity;
(l) contract not made in the ordinary course of business; or
(m) license agreement.
Except as stated in Schedule 4.10 hereto and for delays, minor
failures to meet specifications or other minor defaults which are normal in the
conduct of the business between the Teletronics Entities and other parties to
the above contracts, the Teletronics Entities have complied with the provisions
thereof, are not in default thereunder, and to the knowledge of the Teletronics
Entities, all other parties to the above contracts have complied with the
provisions thereof, are not in default thereunder, and no event has occurred
which but for the passage of time or the giving of notice would constitute a
default thereunder.
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4.11 Absence of Undisclosed Liabilities. To the knowledge of the
Teletronics Entities, there are no material liabilities or obligations of the
Teletronics Entities of any nature whatsoever, whether accrued, absolute,
contingent, or otherwise, except (i) as identified on Schedule 4.11, (ii) to the
extent reflected in the 1998 Balance Sheets and not heretofore paid or
discharged and (iii) liabilities incurred, consistently with past business
practice, in or as a result of the normal and ordinary course of business since
the Balance Sheet Date.
4.12 Existing Condition. Except as disclosed in Schedule 4.12 hereto,
since the Balance Sheet Date, there has not been (i) any material adverse change
in the financial condition or in the results of operations, business or
properties of the Teletronics Entities; (ii) any material damage, destruction or
loss, whether or not covered by insurance, affecting the operations, business or
properties of the Teletronics Entities; (iii) any declaration, setting aside or
payment of any dividend, or any distribution in respect of capital stock of the
Teletronics Entities, or any redemption, purchase or other acquisition of any
kind of any shares of the Teletronics Entities; (iv) any increase in the
compensation payable by the Teletronics Entities to any of their officers,
directors or employees; or (v) any change in the terms of any bonus, insurance,
pension or other benefit plan for or with any officer, director or employee
which increases amounts paid, payable to or to become payable thereunder.
4.13 Validity of Contemplated Transactions. Neither the execution and
delivery of this Agreement nor the consummation of the transactions provided for
herein will violate any material agreement to which either of the Teletronics
Entities is a party or by which they are bound or any law, order or decree or
any provision of the Articles of Incorporation or Bylaws of the Teletronics
Entities. Teletronics and the Shareholders have full legal authority to execute
and deliver this Agreement and to consummate and perform the transactions
contemplated hereby, and this Agreement constitutes the valid obligation of
Teletronics and the Shareholders legally binding upon them in accordance with
its terms.
4.14 Licenses and Permits. To the knowledge of the Teletronics Entities,
they have all material licenses and permits necessary in the conduct of their
businesses as presently conducted.
4.15 Transactions with Affiliates. No director, officer or shareholder of
either of the Teletronics Entities owns or during the last two years has owned,
directly or indirectly, or has, or during the last two years has had, an
ownership interest in any business, corporate or otherwise, which is a party to,
or in any property which is the subject of, any business arrangement or
relationship of any kind with either of the Teletronics Entities except as
described in Schedule 4.15 hereto. All relationships described in Schedule 4.15
will terminate as of the Closing Date.
4.16 Bank Accounts, Directors and Officers. Schedule 4.16 hereto contains
a true and correct list of the name and location of each bank in which the
Teletronics Entities have an account, each safety deposit box or custody
agreement and the names of the persons authorized
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to draw thereon or to withdraw therefrom, and also sets forth the names of all
directors and officers of the Teletronics Entities.
4.17 Employees of the Teletronics Entities. Schedule 4.17 attached hereto
sets forth a list of the employees of the Teletronics Entities, their positions
and rates of compensation. Except as disclosed on Schedule 4.10 attached hereto,
there are no outstanding claims for wages, vacations, or other benefits or
compensation of any type or description, whether currently payable or deferred
under any defined benefit pension plan, any defined contribution pension plan,
any implied or deemed employee benefit or plan, or any welfare plan or otherwise
or any other policy, program or practice, whether formal or informal, by any of
Teletronics Entities' employees or any other individuals covered by or eligible
under such plans or programs, other than wages that will become due for current
pay periods and/or benefits that have accrued through the Closing Date and will
become payable in the future. There are no existing or, to the knowledge of the
Teletronics Entities, threatened claims by any of the Teletronics Entities'
employees with respect to any applicable workers' compensation, worker health or
safety, equal employment opportunity or discrimination, wage and hour, wrongful
discharge, personnel or other employment related statutes, laws or common law
rights of any type or description. Except as disclosed on Schedule 4.10
attached hereto, there is no collective bargaining agreement in existence
between the Teletronics Entities and a collective bargaining representative for
any of the Teletronics Entities' employees, and during the one (1) year period
immediately preceding the date of this Agreement there has not been any union
organizing activities or proceedings involving, or any petitions for election of
or demands for recognition by, a labor union or labor organization as the
exclusive bargaining agent for any of the Teletronics Entities' employees. The
Teletronics Entities have not received notice of any proceeding involving either
of the Teletronics Entities currently pending before the National Labor
Relations Board, including but not limited to any wherein a labor organization
is seeking representation of any of the Teletronics Entities' employees.
4.18 Employee Benefit Plans.
(a) Each of the Plans has been administered in compliance with its
terms and all filing, reporting, disclosure and other requirements of ERISA and
the requirements of the Code have been materially satisfied with respect to each
of the Plans.
(b) No "withdrawal liability" (as that term is used in Section 4201 of
ERISA) has been or is reasonably expected to be assessed against the Teletronics
Entities, nor are the Teletronics Entities otherwise aware of any facts or
circumstances that could lead to assessment of withdrawal liability. The
Teletronics Entities have not withdrawn, either partially or completely, from
any multi-employer plans.
(c) Neither any of the Plans nor any trust created thereunder, nor any
trustee or administrator thereof, has engaged in a "prohibited transaction" (as
such term is defined in Section 406 of ERISA) in connection with which any of
the Plans, any such trust, or any trustee
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or administrator thereof, or any party dealing with the Plans or any such trust
could be subject to either a civil penalty assessed pursuant to Section 502(i)
of ERISA or a tax imposed by Section 4975 of the Code.
(d) The Teletronics Entities are not aware and have received no notice
that they have incurred any liability to the Pension Benefit Guaranty
Corporation ("PBGC") with respect to any of the Plans or with respect to any
other employee benefit plan maintained or contributed to by the Teletronics
Entities that has been terminated or otherwise discontinued prior to the date of
this Agreement. The PBGC has not instituted proceedings to terminate any of the
Plans. The Teletronics Entities have not received any notice of and has no
knowledge of a "reportable event" (within the meaning of Section 4043(b) of
ERISA).
(e) Full payment has been made of all amounts which the Teletronics
Entities are required to pay under the terms of each of the Plans as a
contribution to the Plans as of the last day of the most recent fiscal year of
each of the Plans ended prior to the date of this Agreement. None of the Plans
nor any trust established thereunder has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, as of the last day of the most recent fiscal year of each
of the Plans ended prior to the date of this Agreement or the most recent
contribution date as required under the terms of any such Plans if later.
(f) Each of the Plans is in compliance in all material respects with
applicable federal, state and local laws, including but not limited to ERISA.
Each of the Plans that is intended to be "qualified" has been administered in
accordance with the requirements of Section 401(a) of the Code, and a
determination letter has been received from the IRS with respect to
qualification of such Plans, and no facts or circumstances exist which would
adversely affect the qualified status of the Plans.
4.19 Investment Representations. Each Shareholder is acquiring the
Westower Stock issuable to such Shareholder hereunder for such Shareholder's own
account for investment, with no present intention of reselling or otherwise
distributing the same, except (i) pursuant to an offering of shares duly
registered under the Securities Act of 1933, as amended, (the "Securities Act")
or (ii) under other circumstances which do not require registration under the
Securities Act and applicable state securities laws.
4.20 Information Related to Westower. Each Shareholder is an "accredited
investor" as defined in Rule 501 under the Securities Act. Each Shareholder has
received and had an opportunity to review Westower's Rule 424(b)(1) Prospectus
filed with the Securities and Exchange Commission ("SEC") on September 23, 1998,
Form 10-Q filed with the SEC on October 15, 1998 and Forms 8-K filed with the
SEC on September 15 and October 9, 1998 (the "Westower SEC Filings"). Each
Shareholder acknowledges that Westower has made available to the Shareholders
the opportunity to ask questions and receive answers concerning Westower and the
Westower Stock and to obtain any additional information which Westower possesses
or can
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acquire without unreasonable effort or expense that is necessary to
verify the accuracy of such additional information and/or the Westower SEC
Filings. Each Shareholder possesses such knowledge and experience in financial
and business matters or has been advised by such persons who do possess such
knowledge that he is capable of evaluating the merits and risks of the
investment in Westower Stock contemplated by this Agreement.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF WESTOWER AND SUB
Where a representation or warranty contained in this Agreement is qualified
by the phrase "to Westower's knowledge" (or words of similar import), such
expression means that the chief executive officer and the chief financial
officer of Westower believe the statement to be true, accurate, and complete in
all material respects. Knowledge shall not be imputed nor shall it include any
matters which such person should have known or should have been reasonably
expected to have known. Westower and Sub jointly and severally represent and
warrant to Teletronics and the Shareholders that to Westower's knowledge the
statements contained in this Article 5 are true and correct:
5.1 Organization and Existence. Westower and Sub are corporations duly
organized, validly existing, and in good standing under the laws of the State of
Washington. Westower is duly qualified to do business as a foreign corporation
in all other states where the nature of Westower's business requires such
qualification.
5.2 Power and Authority. Westower and Sub have full corporate power and
authority to execute, deliver and perform this Agreement and all other
agreements, certificates or documents to be delivered in connection herewith.
including, without limitation, the other agreements, certificates and documents
contemplated hereby (collectively, the "Westower Closing Documents"). Westower
and Sub have full corporate power and authority to own, lease and operate their
properties and assets and to conduct their businesses as the same have been or
are currently being conducted.
5.3 Authorization. The execution, delivery and performance of this
Agreement and all of the Westower Closing Documents by Westower and Sub have
been duly authorized by all requisite corporate action.
5.4 Binding Effect. Upon execution and delivery by Westower and Sub, this
Agreement and the Westower Closing Documents will be and constitute the valid,
binding and legal obligations of Westower and Sub enforceable against Westower
and Sub in accordance with the terms hereof and thereof, except as the
enforceability hereof or thereof may be subject to the effect of (a) any
applicable bankruptcy, insolvency, reorganization moratorium or similar laws
relating to or affecting creditors rights generally and (b) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
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5.5 Capitalization. Westower is authorized by its Articles of
Incorporation to issue 10,000,000 shares of common stock, $.01 par value per
share, of which 6,901,359 shares were outstanding on October 1, 1998. All
outstanding shares are duly and validly issued, fully paid, and non-assessable,
and all were issued free of any preemptive rights.
5.6 Westower Stock. All shares of Westower Stock into which the
Teletronics Shares will be converted pursuant to the Merger will be newly issued
or treasury shares, and, when issued and delivered in accordance with this
Agreement, will be duly and validly issued, fully paid and nonassessable, and
will not have been issued in violation of or subject to any preemptive rights,
free and clear of all claims, liens, charges and encumbrances of any nature
whatsoever, except those imposed by applicable securities laws and this
Agreement.
5.7 Westower Financial Statements. The financial statements of Westower
contained in the Westower SEC Filings (collectively, the "Westower Financial
Statements") fairly present the financial position of Westower at the dates
thereof and the results of its operations for the periods therein specified in
accordance with generally accepted accounting principles consistently applied
except as may be noted therein.
5.8 No Default. Neither the execution and delivery of this Agreement or
the Westower Closing Documents nor full performance by Westower and Sub of their
obligations hereunder or thereunder will violate or breach or otherwise
constitute or give rise to a default under, the terms or provisions of the
Articles of Incorporation or Bylaws of Westower or Sub, or, subject to obtaining
any and all necessary consents, of any contract, commitment or other obligation
included in or necessary for the operation of the Westower's business following
the Closing or any other material contract, commitment, or other obligation to
which Westower or Sub is a party.
5.9 No Consents. No consent, approval or authorization of, or
registration, declaration or filing with any third party including, but not
limited to, any governmental department, agency, commission or other
instrumentality except those, if any, as are delivered or obtained on or prior
to the Closing, is required to be obtained or made by Westower or Sub prior to
the Closing to authorize the execution, delivery and performance by Westower or
Sub of this Agreement or the Westower Closing Documents.
5.10 No Knowledge of the Shareholder's Default. Westower and Sub have no
knowledge that any of the Shareholders' representations and warranties contained
in this Agreement or the Shareholders Closing Documents are untrue, inaccurate
or incomplete in any material respect or that the Shareholders are in default
under any terms or provision of this Agreement or the Shareholders Closing
Documents.
5.11 Filings with the SEC. Except as may have been disclosed to the
Shareholders, Westower has made all filings with the SEC that it has been
required to make under the Securities Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The
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filings pursuant to the Securities Act and the Exchange Act are collectively
referred to as the "Public Reports." Each of the Public Reports has complied
with the Securities Act and the Exchange Act in all material respects. None of
the Public Reports, as of their respective dates, contained any untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.
5.12 Subsequent Events; Investment Information. Subsequent to the
respective dates as of which information is given in the Public Reports or the
Westower SEC Filings, there has been no material adverse change or any fact
known to Westower and not disclosed to the Shareholders that could reasonably be
expected to result in a materials adverse change in the financial condition or
in the results of operations, business or properties of Westower, and, except as
disclosed in the Public Reports or the Westower SEC Filings, there is no
litigation or governmental proceeding to which Westower is a party or to which
any property of Westower is subject or that is pending or, to the knowledge of
Westower, contemplated against Westower that Westower reasonably expects to
result in any material adverse change in the business or financial condition of
Westower. The Westower SEC Filings do not contain any untrue statement or a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
5.13 Full Disclosure. No information furnished by Westower or Sub to the
Shareholders in connection with this Agreement (including, but not limited to,
the Westower Financial Statements) is false or misleading in any material
respect. No representation or warranty by Westower or Sub in this Agreement or
in any writing furnished or to be furnished pursuant hereto, contains or will
contain any untrue statement of a material fact, or omits, or will omit to state
any material fact required to make the statements herein or therein contained
not misleading.
5.14 Tax-Free Merger. It is the intent of Westower and Sub that the Merger
qualify as a tax-free reorganization under Section 368(a) of the Code and
Westower and Sub covenant and agree not to take any action inconsistent with
such intent,
5.15 No Redemptions. Except for repurchases or redemptions of Westower
Stock that are consistent with past practices and purchase programs that were
not created or modified in connection with the Merger, neither Westower nor any
"related person" of Westower (within the meaning of Income Tax Regulation
Section 1.3681 (e)(3)) will repurchase or redeem any of the Westower Stock to be
issued in the Merger.
5.16 Creation and Control of Sub. Prior to the Merger, Westower will be in
control of Sub within the meaning of Section 368(c) of the Code. Sub was formed
solely to consummate the Merger and at no time has or will Sub conduct any
business activities or other operations of any kind other than the issuance of
its stock to Westower prior to the Closing Date.
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5.17 Issuance of Teletronics Shares. Following the Merger, Teletronics
will not issue additional shares of stock that would result in Westower losing
control of Teletronics within the meaning of Section 368(c) of the Code.
5.18 Continuation of Teletronics. Following the Merger, Teletronics will
continue its historic business or use a significant portion of its historic
business assets in a business and Westower will cause Teletronics to do so.
Westower has no plan or intention to liquidate Teletronics; to merge Teletronics
with or into another corporation; to sell or otherwise dispose of the stock of
Teletronics; or to cause Teletronics to sell or otherwise dispose of any of its
assets or any of the assets acquired from Sub, except for dispositions made in
the ordinary course of business.
5.19 Not Investment Company. Neither Westower nor Sub is an investment
company as defined in Section 368(a)(2)(F)(iii) or (iv) of the Code.
5.20 Reliance. The foregoing representations and warranties are made by
Westower and Sub with the knowledge and expectation that the Shareholders are
placing complete reliance thereon.
ARTICLE 6.
COVENANTS
The Teletronics Entities and the Shareholders agree that, pending the
Closing and except as otherwise approved by Westower, such approval not to be
unreasonably withheld:
6.1 Business in the Ordinary Course. The Teletronics Entities shall
refrain from engaging in transactions other than in the ordinary course of
business consistent with past practice. The Teletronics Entities shall also
refrain from entering into any transaction involving expenditures of more than
$100,000.
6.2 Accounting and Credit Changes. The Teletronics Entities shall not
make any changes in their accounting procedures and practices or their credit
criteria from those in existence at January 1, 1998.
6.3 Capitalization, Options and Dividends. The Teletronics Entities shall
not amend their respective Articles of Incorporation and shall not issue or
reclassify or alter any shares of their capital stock; they shall not grant
options, warrants, or other rights of any kind to purchase, or agree to issue
any shares of their capital stock; they shall not purchase or redeem or
otherwise acquire for a consideration any shares of their capital stock and
shall not declare or pay any dividend or other distribution or make payments in
respect of their capital stock, except for a one time cash dividend by the
Teletronics Entities of up to $800,000 in the aggregate to the Shareholders at
closing. Westower agrees that it shall advance sufficient funds to Teletronics
at
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Closing, through either an intercompany loan or a contribution to capital, to
enable the Teletronics Entities to make such distribution.
6.4 Encumbrance of Assets. The Teletronics Entities shall not mortgage,
pledge or encumber any of their properties or assets.
6.5 Employment Agreements. The Teletronics Entities shall not enter into
any employment agreements and shall keep in effect their present compensation
program (including pension plans and other fringe benefits).
6.6 Access. Subject to the confidentiality obligations contained in this
Agreement, Westower and its officers, attorneys, accountants and representatives
shall be permitted to examine the property, books and records of the Teletronics
Entities, and their title to any real estate, and such officers, attorneys,
accountants and representatives shall be afforded access to such property,
books, records and titles, and the Shareholders will upon request furnish
Westower with any information reasonably required in respect to the
Teletronics's Entities property, assets, and business and will provide Westower
with copies of any contract, document or instrument listed in any Schedule
hereto.
6.7 Good Will. The Teletronics Entities will use their best efforts to
preserve the good will of their customers and suppliers and others having
business relations with them.
6.8 Exclusive Rights to Westower. Neither Teletronics nor the
Shareholders, will enter into discussions or negotiations with any other party
with a view to (i) the sale of the Teletronics Shares, (ii) a merger between
Teletronics and another party or (iii) a sale of all or substantially all of the
assets of Teletronics.
6.9 Election to Close Books. The Shareholders agree that promptly
following the Closing they will take whatever steps are necessary to Close Books
Upon S Corporation Termination and will execute a Consent of the Shareholders to
such election.
ARTICLE 7.
POST-CLOSING COVENANTS
7.1 Stock Plans.
(a) Peter T. Holland shall have the right to designate to the
committee of Westower's Board of Directors that administers Westower's stock
option plan the identities of employees of the Surviving Corporation to receive
options pursuant to the Westower Corporation 1998 Stock Incentive Compensation
Plan or such successor plan as Westower and its shareholders may adopt (the
"Plan") and the number of shares to be subject to the options for each such
employee, such options to be effective and priced on the date of grant;
provided,
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however, that the total number of options granted pursuant to the terms of this
provision will in no event confer on such Surviving Corporation employees any
rights to purchase an aggregate of more than 21,026 shares of Westower Stock.
All options granted to Surviving Corporation employees will be exercisable
within ten (10) years from the date of grant and one-third of such options shall
vest on each of the first three anniversaries of the Closing Date. Subject to
approval by such committee, all options granted hereunder shall constitute
"incentive stock options" within the meaning of Section 422 of the Code, or
nonqualified stock options, as designated by Peter T. Holland.
(b) The Surviving Corporation shall continue to administer and
maintain the Teletronics 1998 Employee Incentive Stock and Cash Award Plan (the
"Teletronics Award Plan"), attached hereto as Exhibit 7.1(b), in accordance with
its constituent documents and all applicable provisions of the Code, ERISA and
other laws, including applicable federal and state securities laws; provided,
however, that shares of Westower Stock shall be substituted in place of any and
all Teletronics Shares issued or to be issued pursuant to the Teletronics Award
Plan at the rate of 188.076 shares of Westower Stock for each Teletronics Share.
Prior to issuance, Westower will file a registration statement on Form S-8
registering all Westower Stock issued pursuant to the Teletronics Award Plan.
7.2 Personal Guarantees. Within 30 days after Closing, Westower shall use
commercially reasonable efforts to cause the release of the Shareholders from
personal guarantees issued by them that are disclosed on Schedule 4.10 to secure
obligations Teletronics. Westower shall retain discretion over the nature of the
action to be taken, which may include the granting of replacement security or
the refinancing of the loans secured by the guarantees. Westower shall indemnify
each Shareholder against any cost expense or liability under any such guarantee.
7.3 Registration Rights. With respect to the Westower Stock to be
delivered at Closing to the Shareholders pursuant to Section 2.2 or into an
escrow account pursuant to Section 8.4(b), Westower shall grant to the
Shareholders piggyback and demand registration rights pursuant to a Registration
Rights Agreement in substantially the form attached to this Agreement as Exhibit
7.3.
7.4 Employment Agreements. Westower shall cause Surviving Corporation to
enter into Employment Agreements with Peter Holland and Brent Wysocki in
substantially the form attached hereto as Exhibit 7.4. Westower agrees that it
will cause Peter Holland and Brent Wysocki to be continually appointed to the
Board of Directors of the Surviving Corporation as long as they remain an
employee of the Surviving Corporation.
7.5 Covenant Not to Compete.
(a) The Shareholders agree that for a period of three years following
the Closing Date or one year following from the date of termination of their
employment with
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Surviving Corporation for any reason, whether with or without cause, whichever
period is longer, neither will, except as expressly permitted hereunder,
directly or indirectly (i) operate, develop or own any interest, other than the
ownership of less than 5% of the equity securities of a publicly traded company,
in the business of wireless telecommunications site development within Canada
and/or the United States of America (a "Business"); (ii) compete with Westower,
Surviving Corporation or their subsidiaries and affiliates in the operation or
development of any Business; (iii) with the exception of Surviving Corporation,
be employed by any business which owns, manages, or operates a Business; (iv)
interfere with, solicit, disrupt or attempt to disrupt any past, present or
prospective relationship, contractual or otherwise, between Surviving
Corporation, or its subsidiaries or affiliates, and any customer, client,
supplier or employee of Surviving Corporation, or its subsidiaries or
affiliates; or (v) solicit any employee of Surviving Corporation, or its
subsidiaries or affiliates, to leave their employment with Surviving Corporation
or its subsidiaries or affiliates, as the case may be, or hire any such employee
to work for a Business. The Shareholders shall not be entitled to circumvent the
provisions of this Section 7.5 by entering into a relationship with a Business
as a consultant, director, advisor, or otherwise, which has the effect of
competing with Surviving Corporation, its affiliates or subsidiaries.
(b) If a judicial determination is made that any of the provisions of
Section 7.5(a) constitute an unreasonable or otherwise unenforceable
restriction, such provisions shall be rendered void only to the extent that such
judicial determination finds such provisions to be unreasonable or otherwise
unenforceable. In this regard, the parties hereto hereby agree that any
judicial authority construing this Agreement shall be empowered to sever any
portion of the territory or prohibited business activity from the coverage of
Section 7.5(a) and to apply the provisions of Section 7.5(a) to the remaining
portion of the territory or the remaining business activities not so severed by
such judicial authority. The time period during which the prohibitions set
forth in Section 7.5(a) shall apply shall be tolled and suspended during all
violations of Section 7.5(a).
(c) The Shareholders specifically acknowledge and agree that the
restrictions set forth in this Section 7.5 are reasonable and necessary to
protect the legitimate interests of Westower and Surviving Corporation and that
Westower and Sub would not have undertaken the Merger in the absence of such
restrictions. The Shareholders further acknowledge and agree that any violation
of the provisions of this Section 7.5 will result in irreparable injury to
Westower and Surviving Corporation, that the remedy at law for any violation or
threatened violation of such Section will be inadequate and that in the event of
any such breach, Westower or Surviving Corporation, in addition to any other
remedies or damages available at law or in equity, shall be entitled to
temporary injunctive relief before trial from any court of competent
jurisdiction as a matter of course and to permanent injunctive relief without
the necessity of proving actual damages. The existence of any claim or cause of
action on the part of the Shareholders against Westower or Surviving
Corporation, whether arising from this Agreement or otherwise, shall not
constitute a defense to the granting or enforcement of this injunctive relief.
If Westower or Surviving Corporation prevail in an action to enforce any of its
rights under this Agreement,
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Westower or Surviving Corporation shall be entitled to recover from the
Shareholders, as applicable, all reasonable attorneys' fees, court costs and
other expenses incurred by Westower or Surviving Corporation in connection with
the enforcement of those rights.
7.6 Audit. The Shareholders will cooperate fully (including delivery of
representation letters in a form customarily required of management) with
independent auditors designated by Westower to allow such auditors to audit
financial statements of Teletronics (at Westower's expense) for any periods
through the Closing Date and deliver an opinion thereon as required by the rules
and regulations of the SEC.
7.7 Westower Stock.
(a) No Shareholder will, directly or indirectly, offer, sell, contract
to sell, pledge or otherwise dispose of any Westower Stock received by such
Shareholder in the Merger prior to expiration of six months after the Closing
Date. Subject to Section 7.7(b) hereto, after the expiration of such six month
period, up to one-half of the Westower Stock issued as part of the Merger
consideration may be resold at any time before the first anniversary of the
Closing Date, and all the remaining Westower Stock (excluding any Westower Stock
still held in escrow pursuant to Section 8.4(b)) may be resold beginning on the
first anniversary of the Closing Date. Notwithstanding anything in the foregoing
to the contrary, a Shareholder may transfer shares of Westower Stock to a
Related Party, as defined herein, for estate planning purposes, provided that
such Related Party transferee (i) acknowledges the contractual restrictions
relating to the transfer of such shares set forth in this Section and (ii)
agrees to be bound by the same . For purposes hereof, "Related Party" means,
with respect to any Person that is an individual, any spouse, lineal descendant
(including by adoption), executor, administrator, trustee, legatee or
beneficiary of such Person or any other Person controlled by such Person. For
purposes hereof, "Person" means an individual, corporation, association,
partnership, joint venture, trust, estate, limited liability company, limited
liability partnership or other entity or organization. Transfers of Westower
Stock by employees of the Surviving Corporation also are subject to Westower
policies against insider trading and the misuse of material non-public
information and compliance with applicable securities laws and rules. Persons
who become affiliates of Westower may be subject to additional restrictions on
the trading of their Westower Shares pursuant to applicable law. The
certificate or certificates evidencing the shares of Westower Stock to be
delivered to the Shareholders in the Merger will bear restrictive legends
substantially in the following form as long as applicable:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CONTRACTUAL
RESTRICTIONS ON TRANSFER EXPIRING ON __________, 1999 PURSUANT TO THAT
CERTAIN AGREEMENT AND PLAN OF MERGER DATED AS OF OCTOBER __, 1998
(THE "AGREEMENT"), BY AND AMONG THE ISSUER, WESTOWER TELETRONICS
---------
ACQUISITION CORP., TELETRONICS MANAGEMENT
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SERVICES, INC. (THE "COMPANY") AND THE SHAREHOLDERS OF THE COMPANY.
-------
PRIOR TO THE EXPIRATION OF SUCH HOLDING PERIOD, SUCH SHARES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED AND THE ISSUER SHALL NOT BE REQUIRED TO
GIVE EFFECT TO ANY ATTEMPTED SALE, TRANSFER OR ASSIGNMENT EXCEPT TO
THE EXTENT SUCH SALE, TRANSFER OR ASSIGNMENT IS IN COMPLIANCE WITH THE
AGREEMENT. UPON THE WRITTEN REQUEST OF THE HOLDER OF THIS CERTIFICATE,
THE ISSUER AGREES TO REMOVE THIS RESTRICTIVE LEGEND (AND ANY STOP
ORDER PLACED WITH THE TRANSFER AGENT) WHEN THE CONTRACTUAL
RESTRICTIONS HAVE EXPIRED.
(b) Each Shareholder further covenants that none of the Westower Stock
that will be issued to such Shareholder pursuant to this Agreement will be
offered, sold, assigned, pledged, transferred, or otherwise disposed of except
after full compliance with all of the applicable provisions of the Securities
Act and the rules and regulations thereunder and applicable state securities
laws. Until and unless Westower receives a legal opinion of counsel acceptable
to Westower that the proposed transfer does not require registration under the
Securities Act and applicable state securities laws , the Shareholders hereby
authorize Westower to instruct its transfer agent not to transfer any of the
Westower Stock. All stock certificates representing the Westower Stock shall be
endorsed with the following restrictive legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAW BUT HAVE BEEN ACQUIRED FOR THE PRIVATE
INVESTMENT OF THE HOLDER HEREOF AND MAY NOT BE OFFERED, SOLD OR
TRANSFERRED UNTIL EITHER (i) A REGISTRATION STATEMENT UNDER SUCH
SECURITIES ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE
BECOME EFFECTIVE WITH REGARD THERETO OR (ii) THE CORPORATION HAS
RECEIVED AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION AND ITS
COUNSEL THAT REGISTRATION UNDER SUCH SECURITIES ACT OR SUCH APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED
OFFER, SALE OR TRANSFER.
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(b) Westower shall remove the legend set forth in Section 7.7(b) upon
receipt of an opinion of counsel, acceptable to Westower, that the Westower
Stock may be sold pursuant to 144(k).
ARTICLE 8.
INDEMNIFICATION
8.1 Indemnification by the Shareholders. Subject to the consummation of
the Closing and the limitations set forth in this Section 8.1, the Shareholders
shall, severally and not jointly, indemnify and hold harmless Westower, the
Surviving Corporation and their respective officers, directors, agents,
employees and affiliates against and in respect of any and all claims, suits,
demands, liabilities, damages, losses, costs and expenses arising out of or
otherwise in respect of:
(a) any breach of any representation, warranty or covenant contained
in this Agreement or in any certificate or other instrument furnished on behalf
of Teletronics or by the Shareholders, pursuant to this Agreement; provided,
however, that any breach of the representations and warranties in Section 4.2 or
Section 4.3 with respect to an individual Shareholder's shares shall be the
several obligation of only the Shareholder breaching such Section, and
(b) any and all actions, suits, proceedings, audits, judgments, costs
and legal and other expenses incident to any of the foregoing or to the
enforcement of this Section 8.1;
provided, however, that the Shareholders shall not be liable for indemnification
under this Agreement for any breach of a representation or warranty that was not
set forth in a claim (including a contingent claim that sets forth the facts on
which a claim may be made in the future to the extent then known) presented in
writing to the Shareholders pursuant to Section 11.13 within one year after
Closing. Notwithstanding anything to the contrary herein, the Shareholders
shall be liable, responsible or obligated to indemnify Westower and Sub for
claims for breach of a representation or warranty under this Section 8.1, only
if the aggregate amount of such claims exceeds $100,000. The total liability
and responsibility of the Shareholders under this Section 8.1 shall be limited
to $1,000,000.
8.2 Indemnification by Westower. Subject to the consummation of the
Closing, Westower shall indemnify and hold harmless the Shareholders against and
in respect of any and all claims, suits, demands, liabilities, damages, losses,
costs and expenses, arising out of or resulting from any of the following:
(a) any breach of any representation, warranty or covenant in this
Agreement or in any certificate or other instrument furnished on behalf of
Westower or Sub pursuant to this Agreement, and
20
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(b) any and all actions, suits, proceedings, audits, judgments, costs
and legal and other expenses incident to any of the foregoing or to the
enforcement of this Section 8.2.
8.3 Indemnification Procedure for Third-Party Claims. Promptly after the
receipt by any party hereto of notice of any claim or the commencement of any
action or proceeding by any third party, such party will, if a claim with
respect thereto is to be made against any party obligated to provide
indemnification (the "Indemnifying Party") pursuant to Section 8.1 or 8.2, give
such Indemnifying Party written notice of such claim or the commencement of such
action or proceeding. Such Indemnifying Party shall have the right, at its
option and upon posting a bond or other security equal to such claims, to
compromise or defend, at its own expense and by its counsel, any matter
involving the asserted liability of the party seeking such indemnification. Such
notice, and opportunity to defend, shall be a condition precedent to any
liability of the Indemnifying Party under the indemnification agreements
contained in this Article 8. If any Indemnifying Party shall undertake to
compromise or defend any such asserted liability, it shall promptly notify the
party seeking indemnification of its intention to do so, and the party seeking
indemnification agrees to cooperate fully with the Indemnifying Party and its
counsel in the compromise of, or defense against any such asserted liability.
In any event, the indemnified party shall have the right at its own expense to
participate in the defense of such asserted liability.
8.4 Walker Ranch Tower Accident.
(a) Teletronics is currently involved in a dispute arising out of the
April 16, 1998 "Walker Ranch" tower accident as set forth in Schedule 4.8
attached hereto (the "Walker Ranch Accident"). Subject to the limitations set
forth in Sections 8.4(b) and (c) below, the Shareholders shall, severally and
not jointly, indemnify and hold harmless Westower and the Surviving Corporation
and their respective officers, directors, agents, employees and affiliates
against and in respect of any and all claims, suits, demands, liabilities,
damages, losses, costs and expenses, calculated after taking into account the
net effect of any tax benefits or insurance proceeds, of any nature whatsoever,
arising out of the Walker Ranch Accident ("Walker Ranch Liabilities"),
including, but not limited to, costs and expenses arising out of Pacific
-------
Insurance Company, Ltd. v. Utilities & C.C., Inc. and Teletronics Management
- ----------------------------------------------------------------------------
Services, Inc., Civil Action No. 98-12718, filed in the Superior Court of
- --------------
Arizona, County of Maricopa.
(b) The parties shall enter into an escrow agreement with Chase
Manhattan Bank and Trust Company, N.A., as Escrow Agent, pursuant to which a
portion of the Merger Consideration consisting of shares of Westower Stock
having a market value of $500,000 based on the closing price of Westower Stock
on the Amex on the trading day immediately prior to the Closing Date ("Escrow
Shares") shall be deposited with the Escrow Agent into an escrow account pending
either the resolution of all claims and expenses arising out of or relating to
the Walker Tower Accident or the written acknowledgment without reservation by
one or both of Pacific Insurance Company, Ltd. or SAFECO Insurance Company of
America of responsibility
21
<PAGE>
for all Walker Ranch Liabilities. Upon payment by Westower or the Surviving
Corporation of Walker Ranch Liabilities which, together with any amounts to
which Westower, the Surviving Corporation or any other indemnified party under
Section 8.1 is entitled (without regard to the $100,000 threshold set forth
therein), are in excess of $100,000, Westower shall be entitled to receive the
number of Escrow Shares whose aggregate value (based on the average closing
price of Westower Stock on the Amex for the 20 trading days immediately prior to
such payment) equals such Walker Ranch Liabilities. Upon resolution or
acknowledgment without reservation of coverage for the Walker Ranch Accident,
the remainder of the Escrow Shares, if any, shall be paid to the Shareholders.
To the extent the Walker Ranch Liabilities incurred by Westower or the Surviving
Corporation exceed the value of the Escrow Shares, they shall be the obligation
of the Shareholders, subject to Section 8.4(c) below.
(c) Any amounts paid by the Shareholders pursuant to this Section 8.4
shall be applied against the $1,000,000 cap set forth in Section 8.1, and the
maximum indemnification obligation of the Shareholders pursuant to Sections 8.1
and 8.4 shall not exceed $1,000,000 in the aggregate.
ARTICLE 9.
CONDITIONS PRECEDENT TO WESTOWER'S AND SUB'S OBLIGATIONS
All obligations of Westower and Sub under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
9.1 Representations and Warranties. The representations and warranties of
Teletronics and the Shareholders contained in this Agreement shall be true in
all material respects at and as of the time of Closing as though made at and as
of such time (except to the extent that they are stated therein to be true as of
some other date) and Teletronics and the Shareholders shall have delivered to
Westower and Sub a certificate dated the Closing Date and signed by them to such
effect.
9.2 Compliance with Agreements. The Shareholders and Teletronics shall
have complied in all material respects with all agreements and conditions
required by this Agreement to be performed by them prior to or at the Closing,
and Teletronics and the Shareholders shall have delivered to Westower and Sub a
certificate dated the Closing Date and signed by them to such effect.
9.3 Opinion of Counsel. Teletronics and the Shareholders shall have
delivered to Westower and Sub an opinion of their counsel dated as of the
Closing Date and in form and substance satisfactory to Westower and based, as to
factual matters, on certificates of Shareholders to the effect that:
22
<PAGE>
(a) Each of the Shareholders is the lawful owner of record of the
number of Teletronics Shares set forth in this Agreement free and clear of any
liens and encumbrances known to such counsel.
(b) This Agreement constitutes a legal valid and binding obligation of
Teletronics and the Shareholders enforceable in accordance with its terms, and
upon filing of Articles of Merger as set forth in this Agreement, Sub will be
merged with and into Teletronics as provided in this Agreement.
(c) Teletronics' authorized capital stock consists of 10,000 shares of
common stock, $.01 par value, of which 1,000 shares are validly issued,
outstanding, fully paid and nonassessable.
(d) Teletronics is a corporation duly organized, validly existing and
in good standing under the laws of the State of Washington and has the corporate
power to perform its business as presently conducted and to own and lease the
properties used in connection therewith. Teletronics is duly qualified to do
business and is in good standing in all jurisdictions specified in this
Agreement.
(e) The consummation of the transactions contemplated by this
Agreement will not result in a breach of any term of or constitute a default
under the Articles of Incorporation or Bylaws of Teletronics, or, to the
knowledge of such counsel, any indenture, agreement, instrument or understanding
known to such counsel to which Teletronics or the Shareholders are a party or by
which it or any of them is bound.
9.4 Material Damage. The business and properties of Teletronics, taken as
a whole, shall not have been and shall not be threatened to be materially
adversely affected in any way as a result of fire, explosion, earthquake,
disaster, accident, labor dispute, flood, drought, embargo, riot, civil
disturbance, uprising, activity of armed forces or act of God or public enemy.
9.5 Employment Agreements. The Employment Agreements referred to in
Section 7.4 shall have been executed and delivered.
ARTICLE 10.
CONDITIONS PRECEDENT TO TELETRONICS'
AND SHAREHOLDERS' OBLIGATIONS
All obligations of Teletronics and the Shareholders under this Agreement
are subject to the fulfillment, prior to or at the Closing, of each of the
following conditions:
10.1 Representations and Warranties. Westower's and Sub's representations
and warranties contained in this Agreement shall be true at and as of the time
of Closing as though
23
<PAGE>
made at and as of such time (except to the extent that they are stated therein
to be true as of some other date) and Westower and Sub shall have delivered to
Teletronics and the Shareholders a certificate dated as of Closing and signed by
them to such effect.
10.2 Compliance with Agreements. Westower and Sub shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed by it prior to or at the Closing, and shall have delivered to the
Teletronics and the Shareholders a certificate dated as of Closing and signed by
them to such effect.
10.3 Opinion of Counsel. Westower and Sub shall have delivered to the
Shareholders and Teletronics an opinion of their counsel Morgan, Lewis & Bockius
LLP (who will rely on Davis Wright Tremaine LLP as to matters of Washington
law), dated as of the Closing Date and in form and substance satisfactory to the
Shareholders and Teletronics that the Westower Stock to be delivered to the
Shareholders as part of the Merger Consolidation, when issued and delivered,
will be validly issued, fully paid and nonassessable.
10.4 Material Damage. The business and properties of Westower and its
subsidiaries taken as a whole shall not have been and shall not be threatened to
be materially adversely affected in any way as a result of fire, explosion,
earthquake, disaster, accident, labor dispute, flood, drought, embargo, riot,
civil disturbance, uprising, activity of armed forces or act of God or public
enemy.
10.5 Agreements. The Registration Rights Agreement referred to in Section
7.3 and the Employment Agreements referred to in Section 7.4 shall have been
executed and delivered.
10.6 Listing of Westower Stock. The Westower Stock issuable in the Merger
pursuant to Article 2 shall have been approved for listing on the Amex.
ARTICLE 11.
MISCELLANEOUS
11.1 Broker Fees. Teletronics and the Shareholders represent and warrant
to Westower and Sub that they have not engaged or dealt with any broker or
finder so as to obligate Westower or the Surviving Corporation to pay a fee,
commission or similar amount in respect to the execution of this Agreement or
the consummation of the transactions contemplated hereby. Any breach of this
representation and warranty shall not be subject to the $100,000 and $1,000,000
limits in Section 8.1.
11.2 Survival of Representations and Warranties. All representations,
warranties and agreements, made by Teletronics, the Shareholders, Westower or
Sub in this Agreement shall survive the Closing and continue in full force and
effect for a period of one year.
24
<PAGE>
Notwithstanding any investigations or audit conducted before or after Closing,
the parties shall be entitled to rely upon the representations and warranties
set forth in this Agreement.
11.3 Knowledge. References to the "knowledge" of either or both of the
Teletronics Entities contained herein refer to the actual knowledge of the
Shareholders who are members of the Board of Directors of the Teletronics
Entities after inquiry of the employees of the Teletronics Entities whose
responsibilities cover the subject matter of the representations and warranties.
11.4 Materiality. The term "material" when used herein means an amount or
effect on the matter so qualified which is in excess of $100,000.
11.5 Expenses. Westower and Sub shall bear their legal fees and expenses,
in connection with the transactions contemplated hereby. Teletronics will bear
the costs and expenses incurred by Teletronics and the Shareholders in
connection with the transactions contemplated hereby; provided, however, that if
-------- -------
the transactions contemplated hereby are consummated, the legal fees and
expenses of Teletronics in excesses of $100,000 shall be paid by the
Shareholders .
11.6 Announcements. All parties shall cooperate with each other as to the
timing and content of any announcements of the transactions contemplated hereby
to the general public or to employees, customers and suppliers.
11.7 Further Actions and Assurances. Westower, Sub, Teletronics and the
Shareholders will execute and deliver any and all documents, and will cause any
and all other action to be taken, either before or after Closing, which may be
necessary or proper to effect or evidence the provisions of this Agreement and
the transactions contemplated hereby.
11.8 Counterparts. This Agreement may be executed in several counterparts,
each of which is an original and the Shareholders may become a party hereto by
executing a counterpart hereof. This Agreement and any counterpart so executed
shall be deemed to be one and the same instrument. It shall not be necessary in
making proof of this Agreement or any counterpart hereof to produce or account
for any of the other counterparts.
11.9 Contents of Agreement; Parties in Interest. This Agreement sets forth
the entire understanding of the parties. Any previous agreements or
understandings between the parties regarding the subject matter hereof are
merged into and superseded by this Agreement. All representations, warranties,
covenants, terms, conditions and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
legal representatives, successors and assigns of Teletronics, the Shareholders,
Westower and Sub.
11.10 Washington Law to Govern. This Agreement shall be construed and
enforced in accordance with the laws of the State of Washington.
25
<PAGE>
11.11 Section Headings and Gender. The section headings herein have been
inserted for convenience of reference only and shall in no way modify or
restrict the terms or provisions hereof. The use of the masculine pronoun
herein when referring to any party has been for convenience only and shall be
deemed to refer to the particular party intended regardless of the actual gender
of such party.
11.12 Schedules. All Schedules referred to in this Agreement are intended
to be and are hereby specifically made a part of this Agreement.
11.13 Notices. All notices, requests and other communications which are
required or permitted hereunder shall be sufficient if given in writing and
delivered personally or by registered or certified mail, postage prepaid, or by
facsimile followed by an original signed copy, as follows: (or to such other
addresses as shall be set forth in a notice given in the same manner):
If to Westower or Sub: Westower Corporation
7001 NE 40th Avenue
Vancouver, WA 98661
Facsimile No. (360) 750-9354
With a copy to: Peter S. Sartorius Esq.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
If to Teletronics: Teletronics Management Services, Inc.
2001 Sixth Avenue, Suite 3302
Seattle, WA 98121
Attention: Peter T. Holland
If to Shareholders: Peter T. Holland
4208 55th Avenue, N.E.
Seattle, WA 98105
Brent Wysocki
4015 Wildwood
Austin, TX 78739
26
<PAGE>
If to Teletronics or Shareholder
with a copy to: Marion V. Larson, Esq.
Graham & James LLP/
Riddell Williams P.S.
1001 Fourth Avenue
Suite 4500
Seattle, WA 98154
11.14 Confidential Information. Westower and sub agree to hold in
confidence any information not generally available to the public received by
them from Teletronics or the Shareholders pursuant to the terms of this
Agreement. Similarly, Teletronics and the Shareholders agree to hold in
confidence any information not generally available to the public received by
them from Westower. If this Agreement is terminated for any reason, each of the
parties and their corporate affiliates and representatives will continue to hold
such information in confidence and will, to the extent requested by the other
party, promptly return all written materials furnished pursuant hereto. Neither
party to this Agreement shall use information received from the other for any
purpose other than evaluating the merits and risks of the transaction
contemplated by this Agreement.
27
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written.
WESTOWER CORPORATION
By: /s/ Calvin J. Payne
----------------------------
Calvin J. Payne, Chairman
WESTOWER TELETRONICS
ACQUISITION CORP.
By: /s/ Calvin J. Payne
----------------------------
Calvin J. Payne, President
TELETRONICS MANAGEMENT
SERVICES, INC.
By: /s/ Peter T. Holland
----------------------------
Peter T. Holland, President
SHAREHOLDERS:
/s/ Peter T. Holland
-------------------------------
Peter T. Holland
/s/ Brent Wysocki
-------------------------------
Brent Wysocki
The undersigned, Catherine Elizabeth Holland, wife of Peter T. Holland, hereby
certifies that she has read this Agreement and Plan of Merger ("Agreement"),
acknowledges that she understands its terms and ratifies and approves the terms
insofar as they do or may affect the management and disposition of any community
property or liability, and does hereby join in any and every sale or other
disposition of community property made pursuant to the Agreement.
/s/ Catherine Elizabeth Holland
- -------------------------------
Catherine Elizabeth Holland
28
<PAGE>
Exhibit 1.1
-----------
ARTICLES OF MERGER
OF
WESTOWER TELETRONICS ACQUISITION CORP.
(A WASHINGTON CORPORATION)
INTO
TELETRONICS MANAGEMENT SERVICES, INC.
(A WASHINGTON CORPORATION)
Pursuant to the provisions of the RCW (S)23B.11.050 of the Washington
Business Corporation Act, the undersigned corporations do hereby make and
execute these Articles of Merger for the purpose of merging Westower Teletronics
Acquisition Corp., a Washington corporation, into Teletronics Management
Services, Inc., a Washington corporation (the "Merger").
A. The Plan of Merger is as follows:
1. The Merger. The names of each corporation to be merged are Westower
----------
Teletronics Acquisition Corp., a Washington corporation ("Sub"), and Teletronics
Management Services, Inc., a Washington corporation ("Teletronics").
Teletronics shall be the surviving corporation.
2. Conversion and Exchange of Stock. In the Merger each outstanding
--------------------------------
share of common stock of Teletronics shall be converted into the right to
receive: (a) $1,000 in cash; plus (b) 188.076 shares of common stock, $.01 par
value, of Westower Corporation, a Washington corporation ("Westower Stock"). No
fractional shares of Westower Stock will be issued. The number of shares to be
issued to any Shareholder of Teletronics will be rounded downward to the nearest
whole share, and cash will be paid in lieu of any fraction at the rate of
$24.375 per share. Each outstanding share of Sub shall be converted into and
become one share of common stock of the surviving corporation.
3. Articles of Incorporation. The Articles of Incorporation of the
-------------------------
surviving corporation in effect immediately prior to the Merger shall continue
in full force and effect and remain the Articles of Incorporation of the
surviving corporation until the same shall be altered, amended or repealed in
accordance with applicable law.
4. Bylaws. The Bylaws of Sub in effect immediately prior to the Merger
------
shall be the Bylaws of the surviving corporation until amended in accordance
with applicable law.
<PAGE>
5. Directors and Officers. The Board of Directors of the surviving
----------------------
corporation shall initially consist of Peter T. Holland, Brent Wysocki, Calvin
J. Payne, S. Roy Jeffrey and Peter Lucas, who shall hold office in each case in
accordance with the Bylaws of the surviving corporation. The initial officers
of the surviving corporation shall be:
Peter T. Holland President
Brent Wysocki Vice President
Peter Lucas Vice President, Treasurer and
Secretary
Each officer shall hold office in accordance with the Bylaws of the surviving
corporation.
B. The Effective Time of the Merger shall be the date on which these Articles
of Merger are filed with the Secretary of State for the State of Washington.
C. The Plan of Merger was adopted by the Shareholders of Teletronics and Sub
on October 23, 1998.
Dated: October __, 1998
TELETRONICS MANAGEMENT SERVICES, INC.
By:
-----------------------------------
Peter Holland
President
WESTOWER TELETRONICS ACQUISITION CORP.
By:
-----------------------------------
Calvin J. Payne
President
<PAGE>
EXHIBIT 7.1(b)
TELETRONICS MANAGEMENT SERVICES, INC.
1998 EMPLOYEE INCENTIVE STOCK AND CASH AWARD PLAN
Section 1. Purpose.
The purpose of this Plan is to provide a method by which selected
individuals performing services for the Company may be offered an opportunity to
increase their personal interest in the growth and success of the Company, to
enable the Company to attract to and to retain in its employment over the years
persons of outstanding competence, and to promote the shareholder point of
view among employees of the Company.
Section 2. Definitions.
(a) "Company" means Teletronics Management Services, Inc. and any
successor corporation.
(b) "Common Stock" means shares of the common stock of the Company.
(c) "Effective Date" means the date of adoption of this Plan by the
Board of Directors of the Company.
(d) "Employee" means any person, including an officer of the Company
(whether or not he or she is also a director thereof), who is employed by the
Company and who, in the opinion of the Board of Directors, is in a position to
contribute materially to the Company's continued growth and development and to
its future financial success.
(e) "Participant" means an Employee who is awarded Units under the
Plan and who has credits standing to his or her account under the Plan.
(f) "Plan" means the 1998 Employee Incentive Stock and Cash Award
Plan of Teletronics Management Services, Inc.
(g) "Termination Date" means the date of a Participant's severance
from employment with the Company by reason of his or her death, retirement,
resignation, discharge, or any other reason.
(h) "Units" means the designation by which basic credits to Participants'
accounts hereunder are recorded and referred. Each Unit, when awarded, shall
be deemed to constitute an immediate credit to the Participant's account.
(i) "Vesting Date" means the date specified in each award of Units on
which the Units shall become payable. Payment of awards shall be at such time
and on such date as the Board of Directors in its sole discretion determines.
<PAGE>
Section 3. Administration.
The Board of Directors of the Company shall administer, construe and
interpret this Plan. No member of the Board of Directors shall be liable for
any act done or determination made in good faith. The Board of Directors may, in
its discretion, establish an Administrative Committee consisting of one or more
members of the Board of Directors, who shall serve at the pleasure of the Board
of Directors, to administer the Plan. The construction and interpretation by
the Board of Directors of any provision of this Plan shall be final and
conclusive.
Section 4. Grant of Awards.
The Board of Directors shall determine from time to time, in its sole
discretion, subject to the provisions of this Plan:
(a) The Employees who shall participate in the Plan from time to time
and the awards to them;
(b) The number and composition of Units to be recorded to the account
of each Participant;
(c) The Vesting Date for each Unit awarded to a Participant; and
(d) All of the other terms and conditions (which need not be identical)
of the Units and the awards of Units.
Section 5. Recording of Units.
The Company shall set up an appropriate record and thereafter from time
to time enter therein the name of each Participant, the number of Units and the
composition of each Unit awarded to him or her, the date or date of such
awards, the Vesting Date or Vesting Dates of such awards, and any later
adjustments to the number of such Units or the composition thereof.
Section 6. Payment of Awards.
The Company will pay to the Participant the aggregate amounts of Common
Stock and/or cash standing to his or her credit upon the Vesting Date for each
award as determined according to Section 4. The amount paid will be adjusted to
account for withholding requirements in accordance with Section 7.
Section 7. Composition of and Withholding from the Units.
(a) Each Unit may consist of Common Stock or cash, or any combination of
Common Stock and cash. The composition of each Unit shall be determined solely
at the discretion of the Board of Directors.
2
<PAGE>
(b) Any required withholding for all taxes in connection with the award,
with respect to both Common Stock and cash in any award, to the extent not
prohibited by law, will be withheld and deducted from the cash portion of the
payment of each award or deposited by the Participant with the Company.
Section 8. Legends.
Each certificate representing shares of Common Stock issued upon
payment of an award shall, unless the Board of Directors otherwise determines,
contain on its face the notice "SEE TRANSFER RESTRICTIONS ON REVERSE" and on
its reverse a legend in form substantially as follows, together with any other
legends that are required by the provisions of the Plan or that the Board of
Directors determines to be necessary or appropriate:
NOTICE: TRANSFER AND OTHER RESTRICTIONS
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ENCUMBERED, OR OTHERWISE
DISPOSED OF EXCEPT UPON SATISFACTION OF CERTAIN CONDITIONS. INFORMATION
CONCERNING THESE RESTRICTIONS MAY BE OBTAINED FROM THE CORPORATION. ANY
OFFER OR DISPOSITION OF THESE SECURITIES WITHOUT SATISFACTION OF SAID
CONDITIONS WILL BE WRONGFUL AND WILL NOT ENTITLE THE TRANSFEREE TO
REGISTER OWNERSHIP OF THE SECURITIES WITH THE CORPORATION.
The Company may cause the transfer agent for the Common Stock to place a
stop transfer order with respect to such shares.
Section 9. Termination before Vesting.
If a Participant's Termination Date shall occur before his or her Vesting
Date for any reason, then the Units awarded shall be distributed and paid on the
Vesting Date to the other remaining Participants employed by the Company on the
Vesting Date on a pro rata basis.
Section 10. Adjustment of Units.
In the event of any stock dividend on the Common Stock or any split up or
combination of the shares of the Common Stock, appropriate adjustment shall be
made by the Board of Directors in the number of Units standing to the credit
of each Participant; provided however, that the Board of Directors shall not be
required to establish any fractional Units. In the event of a merger of the
Company in which Common Stock of the Company is converted into securities and/or
property of any other corporation, the Common Stock issuable hereunder shall be
converted into the right to receive securities and/or property of such other
corporations at such rate as the Board
3
<PAGE>
of Directors of the Company in its sole discretion shall determine.
Section 11. Limitation of Rights.
Nothing in this Plan shall be construed to:
(a) Give any employee of the Company any right to be awarded any Units
other than in the sole discretion of the Board of Directors;
(b) Give any participant any rights whatsoever with respect to shares of
Common Stock of the Company;
(c) Limit in any way the right of the Company to terminate a Participant's
employment with the Company, with or without cause, at any time; or
(d) Be evidence of any agreement or understanding, express or implied,
that the Company will employ a Participant in any particular position or
at any particular rate of remuneration.
Section 12. Nonalienation of Benefits.
No right or benefit under this Plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, pledge, encumber or charge the same shall be
void. No right or benefit hereunder shall in any manner be liable for or
subject to the debts, contracts, liabilities or torts of the person entitled to
such benefit. If any Participant should become bankrupt or attempt to
anticipate, alienate, sell, assign, pledge, encumber or charge any right or
benefit hereunder, then such right or benefit shall, in the sole discretion of
the Board of Directors, cease, and in such event, the Company shall distribute
such Participant's Units to the other Participants in the Plan on a pro rata
basis.
Section 13. Amendment or Termination of Plan.
The Board of Directors may amend or terminate this Plan at any time,
except that any amendment or termination of this Plan shall not affect the
rights of Participants to payments in accordance with Section 6 of Units
standing to the credit of Participants at the time of such amendment or
termination.
Section 14. Government and Other Regulations.
(a) The obligation of the Company with respect to the Units and the
issuance of Common Stock upon the Vesting Date thereof shall be subject to all
applicable laws, rules and regulations and such approval by any governmental
agencies as may be required, including but not limited to the effectiveness of
any registration statement required under the Securities Act of 1933, as
amended (the "Securities Act"), and the rules and regulations of any
securities exchange or over-the-counter market on which the Common Stock may
be listed or quoted. The
4
<PAGE>
Company shall have no obligation to register shares of Common Stock issuable
upon the Vesting Date of Units under the Securities Act or to register, qualify
or list such shares under the laws of any state or other jurisdiction or the
rules of any securities exchange or over-the-counter market.
(b) As long as the Common Stock is not registered under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Company intends
that all shares of Common Stock issuable upon the Vesting Date of Units shall
be exempt from registration under the provisions of Section 5 of the Securities
Act, and the Plan shall be administered in a manner so as to preserve such
exemption. The Company also intends that the Plan shall constitute a written
compensatory benefit plan, within the meaning of Rule 701 (b) promulgated under
the Securities Act, and that each Unit awarded at a time when the Common Stock
is not registered under the Exchange Act shall, unless otherwise specified by
the Board of Directors at the time the Unit is awarded or at any time
thereafter, be granted in reliance on the exemption from the registration
requirements of Section 5 of the Securities Act provided by Rule 701.
Section 15. Plan Not Exclusive.
Neither the adoption of the Plan by the Board of Directors nor any
submission of the Plan to the shareholders of the Company for approval shall be
construed as creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable, including but
not limited to the granting of stock options and the awarding of stock and cash
outside of the Plan, and such arrangements may be either generally applicable
or applicable only in specific cases.
Section 16. Governing Law
The Plan and the rights of all persons hereunder shall be governed by,
and interpreted in accordance with, the laws of the State of Washington.
5
<PAGE>
Exhibit 7.3
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of the
23rd day of October, 1998, by and among Westower Corporation, a Washington
corporation (the "Company"), and Peter T. Holland and Brent Wysocki (the
"Shareholders").
BACKGROUND
On October 23, 1998, the parties to this Agreement entered into an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which
Westower Teletronics Acquisition Corp., a Washington corporation and wholly-
owned subsidiary of the Company ("Sub"), was merged with and into Teletronics
Management Services, Inc., a Washington corporation ("Teletronics"). Capitalized
terms used in this Agreement and not otherwise defined herein shall have the
meanings given to them in the Merger Agreement.
Pursuant to the Merger Agreement, the Company issued to the Shareholders
shares of Westower Stock. As a material term of the Merger Agreement, the
Company has agreed to grant to the Shareholders certain registration rights with
respect to the Registrable Securities.
Therefore, the parties agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1. Definitions. For purposes of this Section 1:
(a) The term "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(b) The term "Act" means the Securities Act of 1933, as amended.
(c) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee of Registrable Securities in
accordance with Section 1.10 of this Agreement.
(d) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act, and the declaration or ordering of effectiveness
of such registration statement.
(e) The term "Registrable Securities" means the shares of Westower
Stock issued under the Merger Agreement and any securities of the Company
issued or issuable in exchange for, or in replacement of, such Westower
Stock, excluding in all cases,
<PAGE>
however, (i) any Registrable Securities transferred by a Holder in a
transaction in which rights under this Agreement are not assigned, (ii) any
Registrable Securities sold in a public offering pursuant to a Registration
Statement filed with the SEC, or (iii) any Registrable Securities which may
be sold in a single 3-month period without registration under the Act
pursuant to Rule 144 promulgated under the Act ("Rule 144").
(f) The term "SEC" means the Securities and Exchange Commission.
1.2. Demand Registration
(a) If the Company receives at any time after the date that is six
months after Closing, a written request from the Holders of a majority of
the Registrable Securities then outstanding (the "Initiating Holders") that
the Company file a registration statement under the Act covering the
registration of at least fifty percent (50%) of the Registrable Securities
then outstanding, then the Company shall:
(i) within 10 days of the receipt thereof, give written notice of
such request to all Holders; and
(ii) use all reasonable efforts to effect as soon as practicable,
and in any event within 180 days of the receipt of such request, the
registration under the Act of all Registrable Securities which the
Holders request to be registered within 30 days of the mailing of such
notice by the Company in accordance with Section 2.4, subject to the
limitations of subsection 1.2(b).
(b) If the Initiating Holders intend to distribute Registrable
Securities by means of an underwriting, they shall so advise the Company as
a part of their request made pursuant to subsection 1.2(a), and the Company
shall include such information in the written notice referred to in
subsection 1.2(a). The underwriter will be selected by the Holders and
shall be an underwriter of regional or national standing reasonably
acceptable to the Company. In such event, the right of any Holder to
include Registrable Securities in the registration shall be conditioned
upon such Holder's participation in the underwriting and the inclusion of
such Holder's Registrable Securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders and
such Holder). All Holders proposing to distribute their securities through
the underwriting shall (together with the Company as provided in subsection
1.4(e)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting.
Notwithstanding any other provision of this Section 1.2, if the underwriter
advises the Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Initiating
Holders shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant to this subsection, and the number of
shares of Registrable Securities that may be included in the underwriting
shall be allocated among all Holders, including the
<PAGE>
Initiating Holders, in proportion (as nearly as practicable) to the amount
of Registrable Securities of the Company owned by each Holder; provided,
however, that the number of shares of Registrable Securities to be included
in the underwriting shall not be reduced unless all other securities are
first entirely excluded from the underwriting.
(c) Notwithstanding the foregoing, if the Company furnishes to
Initiating Holders a certificate signed by the Chief Executive Officer of
the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company
and its shareholders for a registration statement to be filed and it is
therefore essential to defer the filing of the registration statement, the
Company shall have the right to defer taking action with respect to the
filing for a period of not more than 120 days after receipt of the request
of the Initiating Holders; provided, however, that the Company may not
utilize this right more than once in any twelve-month period.
(d) In addition, the Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this Section 1.2:
(i) after the Company has effected two registrations pursuant to
this Section 1.2 and such registrations have been declared or ordered
effective; and
(ii) within twelve months after the effective date of the first
registration made pursuant to this Section 1.2.
(e) Nothing herein modifies the prohibitions on transfer set forth in
Section 7.7(a) of the Merger Agreement.
1.3. Piggyback Registration.
(a) If the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the Holders)
any of its stock under the Act in connection with the public offering of such
securities solely for cash (other than a registration on Form S-4 or Form S-8 or
successors thereto or on any other form which does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of the Registrable Securities), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within 20 days after mailing of such notice
by the Company, the Company shall, subject to the provisions of Section 1.4,
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered. In the event that the Company
decides, for any reason, not to complete the registration of shares of common
stock other than the Registrable Securities, or in the event that inclusion of
the Registrable Securities would in the opinion of the managing underwriter for
the offering, impair an offering by the Company or its shareholders for whom the
registration statement is filed, the Company shall
<PAGE>
have no obligation under this Section 1.3 to register, or continue with the
registration of, the Registrable Securities.
(b) Nothing herein modifies the prohibitions on transfer set forth in
Section 7.7(a) of the Merger Agreement.
1.4. Obligations of the Company. Whenever required under this Section 1 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for a period of up
to 120 days or until the distribution contemplated in the Registration
Statement has been completed; provided, however, that the 120-day period
shall be extended for a period of time equal to the period the Holder is
prohibited from selling any securities included in such registration
pursuant to Section 1.11 hereof or the terms of any lockup agreement
entered into at the request of the Company or an underwriter.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by the registration statement under other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that the Company shall not be required to qualify to do business
or to file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act or the happening of any event as a
result of which the prospectus included in such
<PAGE>
registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
(g) Cause all Registrable Securities registered pursuant to this
Agreement to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to this Agreement and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date
of the registration.
(i) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this
Agreement, on the date that the Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this
Section 1, if such securities are being sold through underwriters, or, if
such securities are not being sold through underwriters, on the date that
the registration statement with respect to such securities becomes
effective, (i) an opinion, dated such date, of the counsel representing the
Company, in form and substance as is customarily given to underwriters in
an underwritten public offering, and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering.
1.5. Expenses of Demand Registration. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 1.2, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company (including the reasonable fees and
disbursements of one counsel for the selling Holders) shall be borne by the
Company, provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.2 if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered (in which case all
participating Holders shall bear such expenses) unless the Holders of a majority
of the Registrable Securities agree to forfeit their right to one demand
registration pursuant to Section 1.2.
1.6. Expenses of Company Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
1.3 for each Holder, including (without limitation) all registration, filing,
and qualification fees, printers and accounting fees relating or apportionable
thereto and the fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for the selling Holders
selected by them, but excluding underwriting discounts and commissions relating
to Registrable Securities.
<PAGE>
1.7. Underwriting Requirements. In connection with any offering involving
an underwriting of shares of the Company's capital stock, the Company shall not
be required under Section 1.3 to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it (or by other persons
entitled to select the underwriters), and then only in such quantity as the
underwriters determine in their sole discretion will not jeopardize the success
of the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by Holders to be included in such underwriting
exceeds the amount of securities sold other than by the Company that the
underwriters determine in their sole discretion is compatible with the success
of the offering, then the Company shall be required to include in the
underwriting only that number of such securities, including Registrable
Securities, which the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so included to be
apportioned pro rata among the selling shareholders having piggyback
registration rights according to the total amount of securities entitled to be
included therein owned by each selling stockholder or in such other proportions
as shall mutually be agreed to by such selling stockholder).
1.8. Indemnification. In the event any Registrable Securities are included
in a registration statement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Act or the 1934 Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading; and the Company
will pay to each such Holder, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this subsection shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability, or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that
it arises out of or is based upon written information furnished expressly
for use in connection with such registration by any such Holder,
underwriter or controlling person.
<PAGE>
(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers
who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any
other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of
the foregoing persons may become subject, under the Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon
written information furnished by such Holder expressly for use in
connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person
intended to be indemnified pursuant to this subsection, in connection with
investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
subsection shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably
withheld; provided, that, in no event shall any indemnity under this
subsection exceed the gross proceeds from the offering received by such
Holder.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, than an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The
failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, if prejudicial to
its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section, but the omission
so to deliver written notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise than
under this Section.
(d) If the indemnification provided for in this Section is held by a
court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount
<PAGE>
paid or payable by such indemnified party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and
of the indemnified party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage, or expense
as well as any other relevant equitable considerations. The relative fault
of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or
omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this Section
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement.
1.9. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144, the Company agrees to use its
reasonable best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder so long as the Holder owns any Registrable
Securities, upon request (i) a written statement by the Company stating
whether it has complied with the reporting requirements of Rule 144, the
Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such
form.
1.10. Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Agreement may be
assigned (but only with all related obligations) by a Holder, provided: (a) the
Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee or assignee and
<PAGE>
the securities with respect to which such registration rights are being
assigned; (b) such transferee or assignee agrees in writing to be bound by and
subject to the terms and conditions of this Agreement; (c) such assignment shall
be effective only if immediately following such transfer the further disposition
of such securities by the transferee or assignee is restricted under the Act and
the Merger Agreement; and (d) the Company gives its prior written consent, such
consent not to be unreasonably withheld. The Company agrees that it will consent
to assignments to trusts created by the Shareholders for estate planning
purposes and to gifts to employees of Teletronics.
1.11. Blackout Period. If at any time after the effective date of a
registration statement filed hereunder the Company gives to the Shareholders a
notice pursuant to Section 1.4(f) hereof stating that the Company requires the
suspension by the Shareholders of the distribution of any of the Registrable
Securities, then the Shareholders shall cease distributing the Registrable
Securities for such period of time (the "Blackout Period"), not to exceed 120
days from the time notice is sent until the Company informs the Shareholders
that the Blackout Period has been terminated. Upon notice by the Company to the
Shareholders of such determination, the Shareholders will (a) keep the fact of
any such notice strictly confidential, (b) promptly halt any offer, sale,
trading or transfer of any of the Registrable Securities for the duration of the
Blackout Period, and (c) promptly halt any use, publication, dissemination or
distribution of each prospectus included within the registration statement, and
any amendment or supplement thereto, by it and any of its affiliates for the
duration of the Blackout Period.
1.12. Lock-Up. In connection with any underwritten public offering by
the Company, the Shareholders agree, if requested, to execute a lock-up letter
addressed to the managing underwriter in customary form agreeing not to sell or
otherwise dispose of the Registrable Securities owned by the Shareholders (other
than any that may be included in the offering) for a period not exceeding 180
days.
2. Miscellaneous
2.1. Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
2.2. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Washington.
<PAGE>
2.3. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.4. Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in the manner and to the addresses set forth
in the Merger Agreement.
2.5. Expenses. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.
2.6. Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the holders of a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section shall be binding upon each holder of any
Registrable Securities then outstanding, each future holder of all such
Registrable Securities, and the Company.
2.7. Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable with its terms.
2.8. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter of this agreement.
<PAGE>
The parties have executed this Registration Rights Agreement as of the date
first above written.
WESTOWER CORPORATION
By:
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Calvin J. Payne, Chairman
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Peter T. Holland
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Brent Wysocki
<PAGE>
Exhibit 7.4
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EMPLOYMENT AGREEMENT
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This Agreement is made this 23rd day of October, 1998, between
Teletronics Management Services, Inc., a Washington corporation (the "Company"),
and Peter Holland ("Employee").
W I T N E S S E T H:
WHEREAS, the Company will become a wholly-owned subsidiary of
Westower Corporation, a Washington corporation ("Westower"), pursuant to the
terms set forth in the Agreement and Plan of Merger dated as of October 23, 1998
(the "Merger Agreement") .
WHEREAS, Westower and the Company desire that the Company employ
Employee and Employee desires to accept such employment by the Company effective
on the closing date under the Merger Agreement ("Closing Date") subject to the
terms and conditions contained herein;
WHEREAS, in serving as an employee of the Company, Employee will be in
a position in which Employee will participate in the use and development of
confidential proprietary information about the Company and its affiliates (which
term shall include Westower and its other subsidiaries) as to which the Company
desires to protect fully its rights;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in consideration of the
promises and the mutual covenants and agreements herein set forth, the parties
agree as follows:
1. Employment. As of the Closing Date, the Company hereby employs
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Employee as its President, and Employee accepts such employment, subject to the
terms and conditions set forth herein. Employee shall perform all duties and
services regularly incident to the position of President of the Company, and
Employee shall perform such other duties and services consistent with his
position as may be reasonably prescribed by the Board of Directors of the
Company from time to time. Employee will also serve on the Board of Directors
of the Company for so long as he is employed hereunder. During his employment
hereunder, Employee shall devote his best efforts and attention, on a full-time
basis, to the performance of the duties required of him as an employee of the
Company.
2. Compensation. As compensation for services rendered by Employee
------------
hereunder, Employee shall receive:
<PAGE>
(a) An annual salary of $120,000, or such higher salary as shall be
determined by the Board of Directors at Employee's annual evaluation and
compensation review;
(b) Employee shall be eligible to participate in the Company's
discretionary bonus program whereby a bonus pool equal to 10 percent of the pre-
tax earnings (if any) of the Company is made available for employee bonuses.
(c) Insurance and other benefits equivalent to the benefits provided
other executive employees of the Company;
(d) Three weeks of paid vacation.
(e) Participation, when eligible, in the Company's retirement plan as
such plan may be amended or modified by the Company from time to time;
(f) Reimbursement for all reasonable expenses incurred by Employee in
the performance of his duties under this Agreement, provided that Employee
submits verification of such expenses in accordance with the policies of the
Company; and
(g) Participation, when eligible, in any compensation incentive
program of the Company, if any, as such program may be amended or modified by
the Company from time to time.
Prior to the end of each calendar year of this Agreement, the Company
may review with Employee his compensation hereunder. Any increase in salary or
changes in fringe benefits agreed upon by Employee and the Company at such
annual review shall become effective the following January 1 unless otherwise
agreed to by the Company and Employee.
3. Confidential Information and Trade Secrets.
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(a) Employee recognizes that Employee's position with the Company
requires considerable responsibility and trust, and, in reliance on Employee's
loyalty, the Company may entrust Employee with highly sensitive confidential,
restricted and proprietary information involving Trade Secrets (defined below)
and Confidential Information (defined below) of the Company and its affiliates.
(b) For purposes of this Agreement, a "Trade Secret" is any scientific
or technical information, design, process, procedure, formula or improvement of
the Company or any of its affiliates that is valuable and not generally known to
competitors of the Company and its affiliates. "Confidential Information" is
any data or information, other than Trade Secrets, of the Company or any of its
affiliates that is important, competitively sensitive, and not generally known
by the public, including, but not limited to, the Company's strategic and
business plans, business prospects, training manuals, product development plans,
bidding and pricing
<PAGE>
procedures, market strategies, internal performance statistics, financial data,
confidential personnel information concerning employees, supplier data,
operational or administrative plans, policy manuals, and terms and conditions of
contracts and agreements and such similar information relating to subsidiaries
and affiliates of the Company. The terms "Trade Secret" and "Confidential
Information" shall not apply to information which is (1) already in Employee's
possession (unless such information was obtained by Employee from the Company or
its affiliates or was obtained by Employee in the course of Employee's
employment by the Company or its affiliates), (2) received by Employee from a
third party with no restriction on disclosure or (3) required to be disclosed by
any applicable law.
(c) Except as required to perform Employee's duties as an employee,
Employee will not use or disclose any Trade Secrets or Confidential Information
during employment or at any time after termination of employment and prior to
such time as they cease to be Trade Secrets or Confidential Information through
no act of Employee in violation of this Section 3.
(d) Upon the request of the Company and, in any event, upon the
termination of employment hereunder, Employee will surrender to the Company all
memoranda, notes, records, drawings, manuals or other documents (including all
copies thereof) pertaining to the Company's business, Employee's employment or
the business of the Company or its affiliates. Employee will also leave with the
Company all materials involving any Trade Secrets or Confidential Information.
All such information and materials, whether or not made or developed by
Employee, shall be the sole and exclusive property of the Company or its
affiliates, and Employee hereby assigns to the Company all of Employee's right,
title and interest in and to any and all of such information and materials.
4. Covenant Not to Compete. Employee hereby covenants and agrees to
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comply with and adhere to the provisions of Section 7.5 of the Merger Agreement,
which is incorporated herein by reference with the same effect as if restated
herein in full.
5. Specific Enforcement. Employee specifically acknowledges and
--------------------
agrees that the restrictions set forth in Section 3 hereof and Section 7.5 of
the Merger Agreement as incorporated herein by Section 4 are reasonable and
necessary to protect the legitimate interest of the Company and its affiliates
and that the Company would not have employed Employee in the absence of such
restrictions. Employee further acknowledges and agrees that any violation of
the provisions of Section 3 hereof or Section 7.5 of the Merger Agreement will
result in irreparable injury to the Company or its affiliates, that the remedy
at law for any violation or threatened violation of such Sections will be
inadequate and that in the event of any such breach, the Company or its
affiliates, in addition to any other remedies or damages available at law or in
equity, shall be entitled to temporary injunctive relief before trial from any
court of competent jurisdiction as a matter of course and to permanent
injunctive relief without the necessity of proving actual damages. The
existence of any claim or cause of action on the part of Employee against the
Company or any of its affiliates, whether arising from this Agreement or
otherwise,
<PAGE>
shall not constitute a defense to the granting or enforcement of this injunctive
relief. If either party is required to enforce any of its rights under this
Agreement, the prevailing party shall be entitled to recover from the other
party all reasonable attorneys' fees, court costs and other expenses incurred by
the prevailing party in connection with the successful enforcement of those
rights.
6. Term of Agreement. This Agreement shall be effective as of the
-----------------
Closing Date and shall continue for a term of two (2) years from the Closing
Date unless terminated by either party in the manner set forth herein. This
Agreement shall be automatically renewed for successive one (1) year terms
unless written notice of termination is given by either party at least ninety
(90) days prior to the end of the then current term, or as otherwise provided
herein.
7. Termination Upon Cessation of Operations or Death or Disability
---------------------------------------------------------------
of the Employee. In the event the Company ceases its operations (other than
- ---------------
pursuant to Section 11 below), Employee dies during the term of this Agreement,
or the Employee is disabled and unable to perform his duties in any material
respect for a period of three (3) months, this Agreement shall immediately
terminate and neither the Employee nor the Company shall have any further
obligations hereunder, except that the Company shall continue to be obligated
under Section 2 hereof for any unpaid salary, accrued vacation and other
benefits or unreimbursed expenses owed to Employee or his estate that have
accrued but not been paid as of the date of termination.
8. Termination by Employee. Employee may at any time terminate his
-----------------------
employment by giving the Company thirty (30) days prior written notice of his
intent to terminate the Agreement, unless the termination is because of Changed
Circumstances as set forth in Section 10. Upon such termination, Employee shall
have no further obligation to the Company, except as set forth in Sections 3 and
4 hereof, and Employee shall have no further rights or obligations hereunder,
except as set forth in Section 2 hereof for unpaid salary, accrued vacation and
other benefits or unreimbursed expenses that have accrued but have not been paid
as of the date of termination, unless termination is because of Changed
Circumstances, as set forth in Section 10.
9. Termination for Cause. The Company shall have the right at any
---------------------
time to terminate Employee's employment immediately for cause, which shall
include any of the following reasons: Employee's violation of the provisions of
Sections 3 or 4 hereof, gross neglect of duty, conviction under a state or
federal law involving commission of a crime against the Company or any of its
affiliates or a felony, willful failure or refusal to carry out lawful duties or
directions of the Board of Directors of the Company reasonably consistent with
such duties, which failure or refusal, if susceptible of being cured, is not
cured within 30 days following receipt from the Board of a demand to cure
including specific action to be taken, or the willful engaging by the Employee
in gross misconduct materially injurious to the Company or its affiliates.
<PAGE>
Employee's obligations under Sections 3 and 4 hereof shall survive the
termination of this Agreement pursuant to this Section 9. In the event
Employee's employment hereunder is terminated in accordance with this Section,
the Company shall have no further obligation to make any payments to Employee
hereunder except as set forth in Section 2 for unpaid salary, accrued vacation
and other benefits or unreimbursed expenses that have accrued but have not been
paid as of the date of termination.
10. Termination by Company Without Cause or by Employee for Changed
---------------------------------------------------------------
Circumstances. The Company may terminate the employment relationship with
- -------------
Employee without cause (which shall not include a termination pursuant to
Sections 7, 8 or 9) by giving Employee fifteen (15) days prior written notice.
Employee may terminate the employment relationship with the Company for Changed
Circumstances by giving the Company fifteen (15) days prior written notice. The
term "Changed Circumstances" as used in this Section 10 means (a) a reduction in
Employee's base salary and benefits; (b) a material reduction in the scope of
Employee's authority and/or responsibilities; (c) the requirement that Employee
relocate outside of the greater Seattle area to a location unacceptable to
Employee; or (d) or the requirement that Employee travel outside of the greater
Seattle area substantially more often than is consistent with past practice. In
the event the employment relationship is terminated by the Company without cause
or by Employee for Changed Circumstances during the term hereof, the Company
shall pay Employee all accrued vacation and other benefits and unreimbursed
expenses owed to Employee that have accrued but have not been paid as of the
date of termination. The Company shall also continue to pay to Employee all
salary and benefits, including, but not limited to, payment of health insurance
premiums, hereunder until the expiration of the term set forth in Section 6.
Such payments shall be made in accordance with Employee's regular salary
schedule. Payment of the severance benefits set forth herein shall be subject to
the execution and delivery of a Separation Agreement (including a release of all
claims against the Company) the terms of which will reasonably be determined by
the parties. The Company's obligations pursuant to this Section 10 shall
terminate immediately upon any violation of Section 3 or 4 hereof or the taking
of any other action by Employee that would have the effect of declaring the
provisions of Section 3 or 4 hereof not enforceable.
11. Assignment.
----------
(a) The rights and benefits of Employee under this Agreement, other
than accrued and unpaid amounts due under Section 2 and Section 10 hereof, are
personal to him and shall not be assignable.
(b) This Agreement may not be assigned by the Company except to an
affiliate of the Company; provided, however, that if the Company shall sell or
otherwise transfer substantially all its assets to another corporation or
entity, the Company shall assign its rights hereunder to that corporation or
entity and cause such corporation or entity to assume the Company's obligations
under this Agreement.
<PAGE>
12. Notices. Any notice or other communications under this Agreement
-------
shall be in writing, signed by the party making the same, and shall be delivered
personally or sent by certified or registered mail, postage prepaid, addressed
as follows:
If to Employee: Peter Holland
c/o Teletronics Management Services, Inc.
2001 Sixth Avenue, Suite 3302
Seattle, Washington 98121
If to the Company: c/o Westower Corporation
7001 N.E. 40th Ave.
Vancouver, WA 98661
Attention: Chairman of the Board
or to such other address as may hereafter be designated by either party hereto.
All such notices shall be deemed given on the date received.
13. Governing Law and Venue. This Agreement shall be interpreted and
-----------------------
enforced in accordance with the laws of the State of Washington. In any dispute
arising out of or relating to this Agreement, the parties agree that venue shall
be had in King County, Washington.
14. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid, but
if any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability for any such provisions in every other respect and
of the remaining provisions of this Agreement shall not be in any way impaired.
15. Entire Agreement. This Agreement contains the entire agreement
----------------
of the parties hereto with respect to the subject matter contained herein.
There are no restrictions, promises, covenants, or undertakings, other than
those expressly set forth herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter. This Agreement may not be changed except by a writing executed by the
parties.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
the day and year first above written.
Teletronics Management Services, Inc.
By:
------------------------------------
Peter Lucas, Vice President
EMPLOYEE
---------------------------------------
Peter Holland
<PAGE>
Exhibit 7.4
-----------
EMPLOYMENT AGREEMENT
--------------------
This Agreement is made this 23rd day of October, 1998, between
Teletronics Management Services, Inc., a Washington corporation (the "Company"),
and Brent Wysocki ("Employee").
W I T N E S S E T H:
WHEREAS, the Company will become a wholly-owned subsidiary of
Westower Corporation, a Washington corporation ("Westower"), pursuant to the
terms set forth in the Agreement and Plan of Merger dated as of October 23, 1998
(the "Merger Agreement") .
WHEREAS, Westower and the Company desire that the Company employ
Employee and Employee desires to accept such employment by the Company effective
on the closing date under the Merger Agreement ("Closing Date") subject to the
terms and conditions contained herein;
WHEREAS, in serving as an employee of the Company, Employee will be in
a position in which Employee will participate in the use and development of
confidential proprietary information about the Company and its affiliates (which
term shall include Westower and its other subsidiaries) as to which the Company
desires to protect fully its rights;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in consideration of the
promises and the mutual covenants and agreements herein set forth, the parties
agree as follows:
1. Employment. As of the Closing Date, the Company hereby employs
----------
Employee as its President, and Employee accepts such employment, subject to the
terms and conditions set forth herein. Employee shall perform all duties and
services regularly incident to the position of President of the Company, and
Employee shall perform such other duties and services consistent with his
position as may be reasonably prescribed by the Board of Directors of the
Company from time to time. Employee will also serve on the Board of Directors
of the Company for so long as he is employed hereunder. During his employment
hereunder, Employee shall devote his best efforts and attention, on a full-time
basis, to the performance of the duties required of him as an employee of the
Company.
2. Compensation. As compensation for services rendered by Employee
------------
hereunder, Employee shall receive:
<PAGE>
(a) An annual salary of $120,000, or such higher salary as shall be
determined by the Board of Directors at Employee's annual evaluation and
compensation review;
(b) Employee shall be eligible to participate in the Company's
discretionary bonus program whereby a bonus pool equal to 10 percent of the pre-
tax earnings (if any) of the Company is made available for employee bonuses.
(c) Insurance and other benefits equivalent to the benefits provided
other executive employees of the Company;
(d) Three weeks of paid vacation.
(e) Participation, when eligible, in the Company's retirement plan as
such plan may be amended or modified by the Company from time to time;
(f) Reimbursement for all reasonable expenses incurred by Employee in
the performance of his duties under this Agreement, provided that Employee
submits verification of such expenses in accordance with the policies of the
Company; and
(g) Participation, when eligible, in any compensation incentive
program of the Company, if any, as such program may be amended or modified by
the Company from time to time.
Prior to the end of each calendar year of this Agreement, the Company
may review with Employee his compensation hereunder. Any increase in salary or
changes in fringe benefits agreed upon by Employee and the Company at such
annual review shall become effective the following January 1 unless otherwise
agreed to by the Company and Employee.
3. Confidential Information and Trade Secrets.
------------------------------------------
(a) Employee recognizes that Employee's position with the Company
requires considerable responsibility and trust, and, in reliance on Employee's
loyalty, the Company may entrust Employee with highly sensitive confidential,
restricted and proprietary information involving Trade Secrets (defined below)
and Confidential Information (defined below) of the Company and its affiliates.
(b) For purposes of this Agreement, a "Trade Secret" is any scientific
or technical information, design, process, procedure, formula or improvement of
the Company or any of its affiliates that is valuable and not generally known to
competitors of the Company and its affiliates. "Confidential Information" is
any data or information, other than Trade Secrets, of the Company or any of its
affiliates that is important, competitively sensitive, and not generally known
by the public, including, but not limited to, the Company's strategic and
business plans, business prospects, training manuals, product development plans,
bidding and pricing
<PAGE>
procedures, market strategies, internal performance statistics, financial data,
confidential personnel information concerning employees, supplier data,
operational or administrative plans, policy manuals, and terms and conditions of
contracts and agreements and such similar information relating to subsidiaries
and affiliates of the Company. The terms "Trade Secret" and "Confidential
Information" shall not apply to information which is (1) already in Employee's
possession (unless such information was obtained by Employee from the Company or
its affiliates or was obtained by Employee in the course of Employee's
employment by the Company or its affiliates), (2) received by Employee from a
third party with no restriction on disclosure or (3) required to be disclosed by
any applicable law.
(c) Except as required to perform Employee's duties as an employee,
Employee will not use or disclose any Trade Secrets or Confidential Information
during employment or at any time after termination of employment and prior to
such time as they cease to be Trade Secrets or Confidential Information through
no act of Employee in violation of this Section 3.
(d) Upon the request of the Company and, in any event, upon the
termination of employment hereunder, Employee will surrender to the Company all
memoranda, notes, records, drawings, manuals or other documents (including all
copies thereof) pertaining to the Company's business, Employee's employment or
the business of the Company or its affiliates. Employee will also leave with the
Company all materials involving any Trade Secrets or Confidential Information.
All such information and materials, whether or not made or developed by
Employee, shall be the sole and exclusive property of the Company or its
affiliates, and Employee hereby assigns to the Company all of Employee's right,
title and interest in and to any and all of such information and materials.
4. Covenant Not to Compete. Employee hereby covenants and agrees to
-----------------------
comply with and adhere to the provisions of Section 7.5 of the Merger Agreement,
which is incorporated herein by reference with the same effect as if restated
herein in full.
5. Specific Enforcement. Employee specifically acknowledges and
--------------------
agrees that the restrictions set forth in Section 3 hereof and Section 7.5 of
the Merger Agreement as incorporated herein by Section 4 are reasonable and
necessary to protect the legitimate interest of the Company and its affiliates
and that the Company would not have employed Employee in the absence of such
restrictions. Employee further acknowledges and agrees that any violation of
the provisions of Section 3 hereof or Section 7.5 of the Merger Agreement will
result in irreparable injury to the Company or its affiliates, that the remedy
at law for any violation or threatened violation of such Sections will be
inadequate and that in the event of any such breach, the Company or its
affiliates, in addition to any other remedies or damages available at law or in
equity, shall be entitled to temporary injunctive relief before trial from any
court of competent jurisdiction as a matter of course and to permanent
injunctive relief without the necessity of proving actual damages. The
existence of any claim or cause of action on the part of Employee against the
Company or any of its affiliates, whether arising from this Agreement or
otherwise,
<PAGE>
shall not constitute a defense to the granting or enforcement of this injunctive
relief. If either party is required to enforce any of its rights under this
Agreement, the prevailing party shall be entitled to recover from the other
party all reasonable attorneys' fees, court costs and other expenses incurred by
the prevailing party in connection with the successful enforcement of those
rights.
6. Term of Agreement. This Agreement shall be effective as of the
-----------------
Closing Date and shall continue for a term of two (2) years from the Closing
Date unless terminated by either party in the manner set forth herein. This
Agreement shall be automatically renewed for successive one (1) year terms
unless written notice of termination is given by either party at least ninety
(90) days prior to the end of the then current term, or as otherwise provided
herein.
7. Termination Upon Cessation of Operations or Death or Disability
---------------------------------------------------------------
of the Employee. In the event the Company ceases its operations (other than
- ---------------
pursuant to Section 11 below), Employee dies during the term of this Agreement,
or the Employee is disabled and unable to perform his duties in any material
respect for a period of three (3) months, this Agreement shall immediately
terminate and neither the Employee nor the Company shall have any further
obligations hereunder, except that the Company shall continue to be obligated
under Section 2 hereof for any unpaid salary, accrued vacation and other
benefits or unreimbursed expenses owed to Employee or his estate that have
accrued but not been paid as of the date of termination.
8. Termination by Employee. Employee may at any time terminate his
-----------------------
employment by giving the Company thirty (30) days prior written notice of his
intent to terminate the Agreement, unless the termination is because of Changed
Circumstances as set forth in Section 10. Upon such termination, Employee shall
have no further obligation to the Company, except as set forth in Sections 3 and
4 hereof, and Employee shall have no further rights or obligations hereunder,
except as set forth in Section 2 hereof for unpaid salary, accrued vacation and
other benefits or unreimbursed expenses that have accrued but have not been paid
as of the date of termination, unless termination is because of Changed
Circumstances, as set forth in Section 10.
9. Termination for Cause. The Company shall have the right at any
---------------------
time to terminate Employee's employment immediately for cause, which shall
include any of the following reasons: Employee's violation of the provisions of
Sections 3 or 4 hereof, gross neglect of duty, conviction under a state or
federal law involving commission of a crime against the Company or any of its
affiliates or a felony, willful failure or refusal to carry out lawful duties or
directions of the Board of Directors of the Company reasonably consistent with
such duties, which failure or refusal, if susceptible of being cured, is not
cured within 30 days following receipt from the Board of a demand to cure
including specific action to be taken, or the willful engaging by the Employee
in gross misconduct materially injurious to the Company or its affiliates.
<PAGE>
Employee's obligations under Sections 3 and 4 hereof shall survive the
termination of this Agreement pursuant to this Section 9. In the event
Employee's employment hereunder is terminated in accordance with this Section,
the Company shall have no further obligation to make any payments to Employee
hereunder except as set forth in Section 2 for unpaid salary, accrued vacation
and other benefits or unreimbursed expenses that have accrued but have not been
paid as of the date of termination.
10. Termination by Company Without Cause or by Employee for Changed
---------------------------------------------------------------
Circumstances. The Company may terminate the employment relationship with
- -------------
Employee without cause (which shall not include a termination pursuant to
Sections 7, 8 or 9) by giving Employee fifteen (15) days prior written notice.
Employee may terminate the employment relationship with the Company for Changed
Circumstances by giving the Company fifteen (15) days prior written notice. The
term "Changed Circumstances" as used in this Section 10 means (a) a reduction in
Employee's base salary and benefits; (b) a material reduction in the scope of
Employee's authority and/or responsibilities; (c) the requirement that Employee
relocate outside of the greater Seattle area to a location unacceptable to
Employee; or (d) or the requirement that Employee travel outside of the greater
Seattle area substantially more often than is consistent with past practice. In
the event the employment relationship is terminated by the Company without cause
or by Employee for Changed Circumstances during the term hereof, the Company
shall pay Employee all accrued vacation and other benefits and unreimbursed
expenses owed to Employee that have accrued but have not been paid as of the
date of termination. The Company shall also continue to pay to Employee all
salary and benefits, including, but not limited to, payment of health insurance
premiums, hereunder until the expiration of the term set forth in Section 6.
Such payments shall be made in accordance with Employee's regular salary
schedule. Payment of the severance benefits set forth herein shall be subject to
the execution and delivery of a Separation Agreement (including a release of all
claims against the Company) the terms of which will reasonably be determined by
the parties. The Company's obligations pursuant to this Section 10 shall
terminate immediately upon any violation of Section 3 or 4 hereof or the taking
of any other action by Employee that would have the effect of declaring the
provisions of Section 3 or 4 hereof not enforceable.
11. Assignment.
----------
(a) The rights and benefits of Employee under this Agreement, other
than accrued and unpaid amounts due under Section 2 and Section 10 hereof, are
personal to him and shall not be assignable.
(b) This Agreement may not be assigned by the Company except to an
affiliate of the Company; provided, however, that if the Company shall sell or
otherwise transfer substantially all its assets to another corporation or
entity, the Company shall assign its rights hereunder to that corporation or
entity and cause such corporation or entity to assume the Company's obligations
under this Agreement.
<PAGE>
12. Notices. Any notice or other communications under this Agreement
-------
shall be in writing, signed by the party making the same, and shall be delivered
personally or sent by certified or registered mail, postage prepaid, addressed
as follows:
If to Employee: Brent Wysocki
c/o Teletronics Management Services, Inc.
2001 Sixth Avenue, Suite 3302
Seattle, Washington 98121
If to the Company: c/o Westower Corporation
7001 N.E. 40th Ave.
Vancouver, WA 98661
Attention: Chairman of the Board
or to such other address as may hereafter be designated by either party hereto.
All such notices shall be deemed given on the date received.
13. Governing Law and Venue. This Agreement shall be interpreted and
-----------------------
enforced in accordance with the laws of the State of Washington. In any dispute
arising out of or relating to this Agreement, the parties agree that venue shall
be had in King County, Washington.
14. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid, but
if any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability for any such provisions in every other respect and
of the remaining provisions of this Agreement shall not be in any way impaired.
15. Entire Agreement. This Agreement contains the entire agreement
----------------
of the parties hereto with respect to the subject matter contained herein.
There are no restrictions, promises, covenants, or undertakings, other than
those expressly set forth herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter. This Agreement may not be changed except by a writing executed by the
parties.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
the day and year first above written.
Teletronics Management Services, Inc.
By:
-------------------------------------
Peter Lucas, Vice President
EMPLOYEE
----------------------------------------
Brent Wysocki
