Document:

Agreement with Steven Moskowitz

 Exhibit 10.1 
 AGREEMENT 
 This Agreement (“Agreement”) is executed as of February 25, 2009 by and
between American Tower Corporation, a Delaware corporation and its subsidiaries and affiliates (collectively the “Company”) and Steven J. Moskowitz (the “Employee”). The Company and the Employee shall collectively be referred to
as the “Parties.” 
 Whereas, the Employee joined the Company as an employee in January 1998 and has held the position of
President, U.S. Tower Division, since October 2003; 
 Whereas, the Employee and the Company have engaged in communications regarding
succession planning at the Company, and the Employee has indicated his desire to transition to a different role and relationship with the Company, whereby he would cease to serve as President, U.S. Tower Division, but would continue to provide
strategic advisory services to the Company; 
 Whereas, the Employee and the Company are parties to that certain letter agreement dated
November 7, 2003 from James Taiclet, the Company’s Chief Executive Officer (the “Employment Letter”), which provides for certain benefits to the Employee; 
 Whereas, the Employee and the Company have agreed to terminate the Employment Letter and have agreed that the Employee’s continued service to the
Company be subject to the terms and conditions set forth herein; 
 Whereas, the Company has agreed to provide the Employee with the benefits
set forth herein as consideration for the services to be provided by the Employee hereunder and for Employee’s agreement to the terms and conditions contained herein, including with respect to the release, non-compete, non-solicitation and
mutual non-disparagement clauses (collectively, the “Covenants”); 
 Whereas, the Employee acknowledges that, by the
Employee’s free and voluntary act of signing this Agreement, the Employee agrees to the terms of this Agreement and intends to be legally bound thereby after the Agreement is signed by both parties and the revocation period as set forth herein
has expired; and 
 Whereas, Employee and the Company have agreed to terms related to the Employee’s termination of employment, which
are set forth herein. 
 NOW, THEREFORE, in consideration of the foregoing promises and the mutual covenants set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows: 
  

	 	1.	Effective as of March 9, 2009, the Employee will cease to be the Executive Vice President of the Company and the President of the U.S. Tower Division. Employee will continue as
an employee of the Company until April 3, 2009 (“Departure Date”) and will make himself reasonably available for the purpose of assisting in transitioning matters to his successor(s) in those positions and shall be paid until the
Departure Date at the rate of $10,192.31 per week, representing his current base salary. Employee’s employment with the Company shall terminate as of 5:00 PM Boston time on the Departure Date. The Company shall reimburse the Employee for
business expense incurred through the Departure Date in accordance with the Company’s applicable reimbursement policy. 

	 	2.	The Employee hereby resigns, effective as of the Departure Date, all positions, titles, duties and responsibilities with the Company, its subsidiaries and affiliates and agrees to
execute all additional documents and take such further steps as may be reasonably required to effectuate such resignation. To the extent the Employee provides any services to the Company following the Departure Date, the Employee acknowledges that
it will be in the capacity of a consultant. 

  

	 	3.	The Parties agree that, effective as of the date hereof, the Employment Letter be and hereby is terminated in its entirety. Further, the Parties agree and acknowledge that the
benefits provided for in this Agreement replace and supersede in their entirety any and all benefits that may have been afforded the Employee under the Employment Letter. The Parties acknowledge that the Employee shall not be entitled to any
benefits under the Company’s Severance Program. 

  

	 	4.	The Company shall pay the Employee at the same time as annual bonuses are paid to the Company’s other senior executives, but in no event later than the Departure Date, the
amount of $489,300, which is equal to the sum of (i) the Employee’s 2008 bonus, as approved by the Compensation Committee of the Company’s Board of Directors, ($429,300) and (ii) the special bonus approved by the Compensation
Committee of the Company’s Board of Directors in November 2008 ($60,000). 

  

	 	5.	The Company agrees to pay the Employee severance in an amount equal to $795,000, which represents18 months of the Employee’s monthly salary of $44,167. This amount, less
applicable taxes and withholdings, will be paid in equal bi-weekly installments for an 18-month period beginning on the first payroll date following the Departure Date (“Severance Period”). In addition, the Company shall pay the Employee
no later than the Departure Date, $81,000, which represents the Employee’s current target bonus for 2009 (60% of the Employee’s annual base salary), pro-rated based on the length of Employee’s employment with the Company for the
period January 1, 2009 to the Departure Date. The amounts set forth in this paragraph 5 related to the Employee’s base salary and bonus are referred to in this Agreement as the “Severance Payment.” Any accrued but unused flex
time shall be compensated for in the final paycheck. The Employee’s final paycheck, which covers the period through the Departure Date, and all severance payments will be mailed to the last address on record at the Company.

  

	 	6.	This Agreement shall be administered and construed so as to minimize the risk of incurring any adverse tax consequences under Internal Revenue Code Section 409A and all
regulations promulgated thereunder (collectively, “Section 409A”). Notwithstanding any other provision contained within this Agreement to the contrary, if Section 409A applies to payments hereunder, no payment pursuant to the first
sentence of paragraph 5 will be made to the Employee during the period lasting six (6) months from the Departure Date (or such later date as may be treated as the date of the Employee’s separation from service for purposes of
Section 409A) to the extent and at the point that the total payments pursuant to the first sentence of paragraph 5 would exceed the limit established under Section 409A ($490,000). If any such payments are delayed pursuant to the preceding
provisions of this paragraph 6, such delayed payments will resume and be paid on or about the first regularly scheduled payroll date following the first business day following the expiration of the six (6) month period referred to within this
paragraph 6. If required to avoid the imposition of any excise tax pursuant to Section 409A on any of the payments pursuant to the first sentence of paragraph 5 that exceed $490,000 because the Employee is deemed to have a separation of service
for purposes of Section 409A that is later than the Departure Date, such payments will be delayed to the earliest date that they can be paid without subjecting them to such excise tax. 

  

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	 	7.	The Company agrees to pay the Employee a gross-up for excise tax, and any federal and state income or other taxes on the gross-up payment (the “Gross Up”), so that the
Employee is held harmless, on an after-tax basis, from the application of the excise tax in the event that he receives or is deemed to receive payments or benefits from the Company or an affiliate of the Company, including the Severance Payment and
other payments or benefits, which constitute “parachute payments” within the meaning of Sections 280G and 4999 of the Internal Revenue Code (“Code”) and trigger excise taxes. 

  

	 	8.	The Employee shall be entitled to continuation of Company sponsored medical or dental health benefits in which the Employee is currently enrolled to the extent provided in
Section 4980B of the Internal Revenue Code of 1986 and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known as “COBRA”). For the period beginning on the Departure
Date and ending on October 3. 2010, the Company shall pay any such COBRA premiums on behalf of Employee. The Employee acknowledges that the qualifying event date for purposes of COBRA is the Departure Date. The Employee will receive, under
separate cover, information concerning the right to continue health and dental coverage after the Departure Date in accordance with COBRA. 

  

	 	9.	Except as otherwise set forth in this Agreement, the Employee shall be entitled to all rights under the Company’s benefits plans as they relate to employees following
termination of employment, including with respect to submissions for reimbursements, in accordance with the terms of such benefits plans. 

  

	 	10.	The Employee acknowledges that the Employee is not entitled to receive the Severance Payment unless the Employee signs this Agreement. The Employee acknowledges that, except for the
Severance Payment agreed to herein, he is not entitled to any payment in the nature of severance or termination pay from the Company. The Employee also acknowledges that other than the benefits described in this Agreement, the Employee is not
entitled to any additional separation benefits. 

  

	 	11.	The Company shall indemnify and reimburse the Employee to the fullest extent permitted under the Company’s current Certificate of Incorporation and By-Laws and applicable law,
in connection with any pending, threatened of future action, suit or proceeding against the Employee by reason of the fact that the Employee is or was a director, officer, employee or agent of the Company or any of its affiliates, including any act
taken or omitted to be taken in connection with any of the foregoing positions (“Indemnification Rights”). 

  

	 	12.	Subject to the next sentence, all options to purchase stock of the Company and all restricted stock units previously granted to the Employee (collectively, the “Equity
Awards”) shall be treated upon the termination of the Employee’s employment with the Company as provided in the agreements evidencing the Equity Awards and otherwise in accordance with their terms. Notwithstanding the foregoing, consistent
with the terms as were in effect under the Employment Letter, the Employee shall have the right to exercise stock options issued to the Employee for a period equal to the lesser of three years following the Departure Date or the expiration of the
options, and continued vesting of such options in accordance with the then existing vesting schedule during the same period, as and to the extent set forth on Schedule A attached hereto; provided that, it is expressly understood that the
foregoing does not apply to any other form of equity grant as may have been awarded to the Employee. All such exercises of stock options must be made prior to the end of such three year period, i.e., April 3, 2012, and are otherwise
subject to and are to be carried out in accordance with the terms and conditions of the agreements evidencing the grant of options to purchase stock of the Company. After such three year period, stock options that remain unexercised will expire
without value. 

  

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	 	13.	The Employee agrees from time to time to make himself reasonably available following the Departure Date to provide senior advisory services to the Company’s Chief Executive
Officer or the Board of Directors on strategic matters. For such advisory services, the Employee will be paid a monthly fee of $44,167, payable in advance. For so long as he is providing advisory services to the Company under this paragraph 13, the
Company will make available appropriate office and parking space to the Employee and will provide appropriate administrative services available to him. The Company will reimburse the Employee for all business expenses reasonably incurred by the
Employee in connection with the services provided. Either the Company or the Employee may, upon thirty (30) days prior written notice, terminate this arrangement at any time and for any reason. 

  

	 	14.	Except for the rights created by this Agreement, the Employee hereby irrevocably releases, acquits, and forever discharges the Company and its representatives, parent and affiliate
corporations (as the case may be), successors, affiliates, officers, directors, agents, assigns, attorneys, current and former employees, heirs and administrators, releasing them from any and all claims, rights, expenses, debts, demands, costs,
contracts, liabilities, obligations, actions, and causes of action of every nature, known or unknown, whether in law or equity, which the Employee had, now has, or may have which are in any way connected with, or arise out of the Employee’s
employment, compensation, and termination of employment with the Company, except for (i) claims for enforcement of this Agreement, (ii) the Indemnification Rights, (iii) claims under any directors and officers liability policy, and
(iv) claims as a shareholder. The Employee specifically releases and discharges, by way of illustration but not by way of limitation, any obligation, claim, demand, or cause of action based on, or arising out of, any alleged wrongful
termination, breach of employment contract, misrepresentation, promissory estoppel, interference with advantageous relations or economic expectancies, defamation, invasion of privacy, breach of implied covenant of good faith and fair dealing,
workers’ compensation, intentional or negligent infliction of emotional distress or discrimination based on race, national origin, gender, religion, or handicap. The Employee also specifically releases and discharges any and all claims rights
and/or remedies under the following: the National Labor Relations Act; Title VII of the Civil Rights Act; the Civil Rights Act of 1991; Sections 1981 through 1988 of Title 42 of the United States Code; the Employee Retirement
Income Security Act; the Equal Employment Opportunity Act; the Fair Credit Reporting Act; the Immigration Reform Control Act; the Americans with Disabilities Act; the Rehabilitation Act; the Occupational Safety and Health
Act; the Family and Medical Leave Act, to the extent allowed by law; the Equal Pay Act; the Uniformed Services Employment and Reemployment Rights Act; Worker Adjustment and Retraining Notification Act; Employee Polygraph
Protection Act; the Sarbanes-Oxley Act of 2002; and any other federal, state or local statute, ordinance, regulation or common law which relates to Employee’s employment or termination of employment. 

  

	 	15.	The Employee represents and warrants that the Employee has not filed any complaints, charges, claims for relief, suits or other actions against the Company, its officers, directors,
stockholders, agents, employees or former employees with any local, state or federal court or administrative agency which currently are outstanding, and that the Employee has no knowledge of such filings having been made on the Employee’s
behalf. 

  

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	 	16.	The Employee represents and warrants that the Employee has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity, any claim against the
Company or portion thereof or interest therein. 

  

	 	17.	Employee affirms that Employee has been granted any leave to which the Employee was entitled under the Family and Medical Leave Act or related state or local leave or disability
accommodation laws. The Employee further affirms that the Employee has no known workplace injuries or occupational diseases. The Employee further affirms that the Employee is not aware of any facts that would support an allegation that the
Employee’s terms and conditions of employment have been adversely affected in retaliation for reporting allegations of wrongdoing by the Company or its officers, including any allegations of corporate fraud. Both Parties acknowledge that this
Agreement does not limit either Party’s right, where applicable, to file or participate in an investigative proceeding of any federal, state or local governmental agency. 

  

	 	18.	The Employee affirms that the Employee has not divulged any proprietary or confidential information of the Company and will continue to maintain the confidentiality of such
information consistent with the Company’s current written policies and the Employee’s agreement(s) with the Company and/or common law. 

  

	 	19.	Employee agrees that for a period of 12 months from the Departure Date, the Employee shall not knowingly, directly or indirectly, alone or in association with others
(i) solicit, or permit any organization directly or indirectly controlled by the Employee to solicit, any employee of the Company to leave the Company, or (ii) solicit for employment, hire or engage as an independent contractor, or permit
any organization directly or indirectly controlled by the Employee to solicit for employment, hire or engage as an independent contractor, any person who was employed by the Company at any time during the Employee’s employment with the Company;
provided, that this clause (ii) shall not apply to the solicitation of any individual whose employment with the Company has been terminated for a period of ninety days or longer, or to the solicitation of any employee whose earnings while
employed by the Company did not exceed fifty thousand dollars ($50,000) per year or to any solicitation through a publication of mass circulation not directed at any Company employee. 

  

	 	20.	The Employee and the Company each agrees to refrain from publicly making any derogatory or defamatory remarks, written or oral, that may disparage the other (and in the case of the
Employee any of the Company’s officers, directors, or employees), or that have the intended or foreseeable effect of harming the other’s personal or business reputation (and in the case of the Employee, of any of the Company’s
officer, directors or employees. 

  

	 	21.	The Employee agrees and acknowledges that for a period of 12 months from the Departure Date, the Employee shall not directly or indirectly, whether or not for compensation,
participate in the ownership, management, operation or control of, or render services of any kind to (collectively, “Control”), any company or person other than the Company, primarily engaged in the construction, development, ownership,
leasing or management of wireless communications towers, broadcast towers, rooftop sites and distributed antenna systems (collectively, the “Business”) or entering joint ventures or partnerships or other transactions with respect to the
Business; provided, that such restriction shall not prohibit the Employee from engaging in (i) the Control of a company that has a subsidiary or affiliate engaged in the Business, so long as such Control does not primarily relate to the
Business and (ii) the ownership of three percent (3%) or less of the outstanding securities of any class of any issuer whose securities are registered under the Securities Exchange Act of 1934, as amended be prohibited by this paragraph
21. The restriction contained in this paragraph 21 shall apply to such activities in the United States, Mexico, Brazil and India. In the event that this paragraph 21 shall be determined by any court of competent jurisdiction to be unenforceable by
reason of its extending for too great a period of time, over too large a geographic area, or over too great a range of activities, it shall be interpreted to extend over the maximum period of time, geographic area or range of activities as to which
it may be enforceable. 

  

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	 	22.	With respect to the restrictive covenants set forth in paragraphs 18, 19, 20 and 21, the Parties acknowledge and agree that: (i) (A) each of the restrictive covenants
shall be construed as a separate covenant with respect to each geographic area and each activity to which it applies, (B) if, in any judicial proceeding, a court shall deem any of the restrictive covenants invalid, illegal or unenforceable
because its scope is considered excessive, such restrictive covenant shall be modified so that the scope of the restrictive covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable, and
(C) if any restrictive covenant (or portion thereof) is deemed invalid, illegal or unenforceable in any jurisdiction, as to that jurisdiction such restrictive covenant (or portion thereof) shall be ineffective to the extent of such invalidity,
illegality or unenforceability, without affecting in any way the remaining restrictive covenants (or portion thereof) in such jurisdiction or rendering that or any other restrictive covenant (or portion thereof) invalid, illegal, or unenforceable in
any other jurisdiction and (ii) it is impossible to measure in money the damages that will accrue to the Company in the event that the Employee breaches any of the restrictive covenants provided in paragraphs 18, 19, 20 and 21. In the event
that the Employee breaches any of the restrictive covenants in paragraphs 18, 19, 20 and 21, the Company shall be entitled to seek to obtain an injunction, restraining order or such other equitable relief, including, but not limited to, specific
performance (without the requirement to post bond) restraining such Employee from violating such restrictive covenant. If the Company shall institute any action or proceeding to enforce the restrictive covenant, the Employee hereby waives the claim
or defense that the Company does not have an adequate remedy at law and agrees not to assert in any such action or proceeding the claim or defense that the Company has an adequate remedy at law. The remedies provided for in this paragraph 22 are
cumulative and in addition to any other rights and remedies the Company may have under law or in equity. The restrictive covenants provided in paragraphs 18, 19, 20 and 21 shall be in addition to any restrictions imposed on the Employee by statute
or at common law. 

  

	 	23.	In addition to all other remedies available to the Company under this Agreement or otherwise, in the event that the Employee materially breaches any of the restrictive covenants
provided in paragraphs 18, 19, 20 and 21, the Company shall be entitled to immediately halt all Severance Payments to the Employee hereunder, and thereafter the Employee shall not be entitled to any further Severance Payments.

  

	 	24.	From the date the Employee receives this Agreement, the Employee shall have seven (7) to consider it. Should the Employee decide to sign the Agreement, the Employee has seven
(7) days following the signing to revoke the Agreement by delivering written notice to the Senior Vice President, Human Resources of American Tower Corporation. The Agreement will not become effective or enforceable until seven (7) days
after the Employee signs it. Should the Employee either decide not to sign this Agreement or should the Employee sign this Agreement and elect to revoke it during the seven (7) day period, then this Agreement shall be null and void and Employee
shall not receive the Severance Payment or the other benefits to be provided to the Employee after the Departure Date as contemplated by this Agreement. 

  

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	 	25.	It is the Company’s desire and intent to make certain the Employee fully understands the provisions and effects of this Agreement. By executing this Agreement, the Employee is
acknowledging that the Employee has been afforded sufficient time to understand the provisions and effects of this Agreement. The Employee and Company shall each be responsible for their own attorney’s fees in connection with this Agreement.

  

	 	26.	Any notice given by either party shall be in writing and shall be deemed to be given five (5) business days after deposit with the United States Postal Service, postage
prepaid, certified return receipt requested or upon actual delivery to (i) the Employee at the last known address provided in writing to the Company by Employee, and (ii) the Company at the following addresses: 

 To:      Senior Vice President, Human Resources 
             American Tower Corporation 
             116 Huntington Avenue, Boston, Massachusetts 02116 
             Fax Number 617-375-7575 
 and: 
             General Counsel, American Tower Corporation 
             116 Huntington Avenue, Boston, Massachusetts 02116 
             Fax Number 617-375-7575 
  

	 	27.	The failure of the Company to insist on strict conformance to the provisions of this Agreement shall not constitute a waiver of any of the provisions hereof. Except as expressly
stated in this Agreement, any remedies referred to herein shall be non-exclusive and in addition to any other remedies at law or in equity. Any waiver must be in writing, designated as such and signed by the Company and shall be applicable only to
the extent set forth herein. 

  

	 	28.	The parties agree that neither this Agreement nor the furnishing of the consideration for the release shall be deemed or construed at anytime for any purpose as an admission by
either party of any liability or unlawful conduct of any kind. 

  

	 	29.	Should any provision of this Agreement be declared or be determined by any court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or
provisions, shall not be affected thereby and said illegal or invalid, part, term or provision shall be deemed not to be a part of this Agreement. 

  

	 	30.	This Agreement shall be binding upon the Parties, their heirs, successors and assigns, and may not be abandoned, supplemented, changed or modified in any manner, orally or
otherwise, except by an instrument in writing of concurrent or subsequent date signed by a duly authorized representative of the Parties hereto. 

  

	 	31.	This Agreement contains and constitutes the entire understanding and Agreement between the Parties hereto and cancels all previous oral and written negotiations, agreements,
commitments, understandings and writings in connection herewith, with the exception of any agreements that provide additional rights to the Company pertaining to non-competition, non-solicitation of customers and/or employees, and/or non-disclosure
of confidential and/or proprietary information. 

  

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	 	32.	This Agreement may be executed in counterparts, all of which taken together shall constitute one and the same instrument. 

  

	 	33.	This Agreement shall be governed by and interpreted and construed in accordance with the laws of the Commonwealth of Massachusetts. 

 Witness to the execution hereof, effective as of the date first written above: 
 /s/    Nathaniel Sisitsky                         
 Witness 
 /s/    Steven
Moskowitz                                     
 Steven Moskowitz (“Employee”) 
 Date:  February 25,
2009                                 
  
 American Tower Corporation 
 /s/    Michael
Powell                             
 Witness 
 /s/    Edmund
DiSanto                                     
 By: Edmund DiSanto 
 Its: Executive Vice President 
 Date:  February 25,
2009                                 
  

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 Schedule A 
  

																
	 Equity Award
Type
	  	Shares
Subject to
Grant	  	Grant Price /
Exercise Price	  	Grant Date	  	Original Vesting
Schedule	  	Vested as of
April 3, 2009	  	Subject to
Vesting
Continuation*	  	Revised 
Expiration Date**
								
	 Stock option
	  	60,000	  	$	53.62	  	November 11, 1999	  	20% yr.,
 initial vest on 11/11/00
	  	60,000	  	—  	  	November 11, 2009
								
	 Stock option
	  	100,000	  	$	30.63	  	September 21, 2000	  	25% yr.,
 initial vest on 9/21/01
	  	100,000	  	—  	  	September 21, 2010
								
	 Stock option
	  	10,000	  	$	15.40	  	April 9, 2001	  	25% yr.,
 initial vest 4/9/02
	  	10,000	  	—  	  	April 9, 2011
								
	 Stock option
	  	157,000	  	$	12.11	  	March 4, 2004	  	100%
 vest on 3/4/05
	  	157,000	  	—  	  	April 3, 2012
								
	 Stock option
	  	28,000	  	$	12.11	  	March 4, 2004	  	50% yr.,
 initial vest on 3/4/05
	  	28,000	  	—  	  	April 3, 2012
								
	 Stock option
	  	350,000	  	$	18.15	  	April 1, 2005	  	25% yr.,
 initial vest 4/1/06
	  	350,000	  		  	April 3, 2012
								
	 Stock option
	  	100,000	  	$	22.20	  	August 8, 2005	  	50% yr.,
 initial vest 8/8/06
	  	100,000	  	—  	  	April 3, 2012
								
	 Stock option
	  	400,000	  	$	31.50	  	March 1, 2006	  	25% year,
 initial vest 3/1/07
	  	300,000	  	100,000	  	April 3, 2012
								
	 Stock option
	  	200,000	  	$	37.52	  	March 15, 2007	  	25% yr.,
 initial vest 3/15/08
	  	100,000	  	100,000	  	April 3, 2012
								
	 Stock option
	  	112,500	  	$	37.70	  	March 17, 2008	  	25% yr.,
 initial vest 3/17/09
	  	28,125	  	84,375	  	April 3, 2012
								
	 Restricted stock unit
	  	32,140	  	$	37.70	  	March 17, 2008	  	25% yr.,
 initial vest 3/17/09
	  	8,035	  	—  	  	April 3, 2009

  

	*	Reflects portion of stock option subject to continued vesting during the period ended April 3, 2012. 

	**	Reflects the earlier of the expiration date of the option grant and April 3, 2012.Letter Agreement between the Company and Reed Watson

 Exhibit 10.1 
 

 
 February 25, 2009 
 Mr. Reed A. Watson 
 4465 Vinewood Lane North 
 Plymouth, MN 55442 
 Dear Reed: 
 As we have discussed,
yesterday the Compensation Committee of the Company’s Board of Directors approved revised compensation terms for you in your new role as Vice President of Differentiation Strategy, reporting to Steve Shank. The Compensation Committee has
authorized management to enter into a letter agreement, reflecting these revised terms. In light of your new position, the Board of Directors has also formally removed you from our list of Section 16 officers. 
 Except as specifically provided below, this letter agreement supersedes and replaces your initial employment arrangement, as reflected in your letter agreement with the
Company, dated June 6, 2006 (the “Offer Letter”). 
 Salary. Commencing immediately, you will be paid an annualized salary of $150,000,
payable on the Company’s normal payroll cycle. This position is classified as exempt. 
 Work Expectations. For any period in which you remain an
employee of the Company, you will be expected to work on a full-time basis. The Company is an “at-will employer;” this means that either you or the Company may terminate your employment at any time for any reason, without advance notice,
except as otherwise set forth in this letter. 
 Management Incentive Plan. In your new position, you will not be eligible to participate in the 2009
Management Incentive Plan. The payout schedule under the 2008 Management Incentive Plan (“2008 MIP”) has been finalized, and you will receive payout under the 2008 MIP, based on your 2008 total base compensation, at the same time as other
2008 MIP participants (scheduled for early March 2009). 
 Stock Options. The stock options that were granted to you on June 26, 2006 will
continue to be governed by the terms of the Stock Option Grant Agreement between you and the Company. 
 Employee Benefits. Except as provided below,
you will be eligible to participate in the employee benefit plans generally available to full-time employees of the Company, including our 401(k) plan and health, dental and disability plans, subject to the terms and conditions of such plans. In
addition, through June 30, 2009, the Company will continue to provide you with parking benefits in our building and pay the same portion of your premiums as we have paid in the past. 
 Paid Time Off (PTO). You will continue to accrue PTO for any period in which you remain an employee of the Company. Any PTO that you use from this date forward
will be drawn on a pro rata basis from the PTO that you currently have accrued and any PTO that you will accrue in the future. Upon any termination of your employment, you will be paid for accrued PTO in accordance with our PTO policy, except that
the payout for remaining PTO, if any, accrued prior to this date will be based on your annualized base salary in effect prior to the modifications described in this letter. 
 

 

 Severance Benefits. If prior to June 30, 2009, your employment is terminated without Cause (as defined in the
Offer Letter) or you resign for good reason (as defined in the Offer Letter), then you will be eligible to receive severance pay equal to 12 months of your base salary, notwithstanding any contrary provision in the Company’s Senior Executive
Severance Plan. “Base salary” for this purposes will equal $262,000 (your annualized base salary as in effect prior to the modifications described in this letter). You will be able to receive this severance pay regardless whether you find
other employment during that time and no amounts of replacement income will be set off. The Company will require any successor to assume its obligations in this letter or will remain obligated after any sale. 
 In addition, you would also be eligible for up to 12 months of outplacement assistance, and the Company will pay the regular employer portion toward continued coverage
for you, your spouse and dependent children under the Company’s group health, dental and basic life insurance plans for up to 12 months. After that time, you must pay the entire cost of continuation coverage if you wish to continue coverage. To
receive this continuation coverage benefit, you must elect continuation coverage in accordance with the documents you receive. If you are not eligible for continuation coverage at the time of termination or if you do not properly elect continuation
coverage, you will not receive any payments in lieu of this subsidized continuation coverage. If you lose eligibility for COBRA or other continuation coverage, as described in the COBRA documents you will receive, the Company will stop paying its
portion of the premiums for your continuation coverage. 
 Due to the reduction in your base salary, a resignation by you prior to June 30, 2009, would
generally qualify as a good reason termination (as defined in the Offer Letter). Please note, however, that to satisfy the requirements of the Senior Executive Severance Plan and Internal Revenue Code section 409A, you must provide Capella with a
30-day notice of your intent to terminate for good reason, so if you wish to exercise such right, notice should be given to Capella not later than May 31, 2009. If you provide such notice between May 27, 2009 and May 29, 2009 (last
business day preceding May 31, 2009), the Company agrees that it will not terminate your employment prior to June 30, 2009. 
 Continued
Employment After June 30, 2009. If you remain employed by the Company after June 30, 2009, you will no longer be a participant in (or eligible for any severance benefits under) the Company’s Senior Executive Severance Plan. Unless
otherwise mutually agreed, you would not be entitled to any severance payments or benefits upon subsequent termination of employment, except as may be required by law (for example COBRA continuation coverage). Except as required by law, you must pay
the entire cost of continuation coverage if you wish to continue coverage. 
 Attorneys’ Fees. If either party breaches its obligations under
this letter and the referenced documents, the prevailing party will be entitled to its costs and reasonable attorneys’ fees incurred in enforcing its rights. 
  

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 Please let me know if you have any questions. 
  

	
	Sincerely,
	
	 /s/ Gregory W. Thom

	Gregory W. Thom
	Vice President, General Counsel

 Enclosure 
 Please
sign and date below your acceptance of the terms set forth in this correspondence and return to my attention. Please retain the additional copy for your records. 
  

							
	 /s/ Reed A. Watson
	 		  	 2/25/09
	  	
	Signed	 		  	Dated	  	

  

 3

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