Exhibit 10.2
EMPLOYMENT CONTRACT
THIS AGREEMENT made by and between DAVEL COMMUNICATIONS GROUP, INC., an Illinois
Corporation, hereinafter called "Employer" or "Davel," and Xxxxx Xxxx,
hereinafter called "Employee". In consideration of the mutual covenants and
agreements set forth below, the parties agree as follows:
1. Term of Employment: Employee has been employed under previous
contractual agreements as Chairman of the Board and Chairman of the Executive
Committee of the Board. Employer and Employee have determined to terminate all
prior contractual agreements regarding employment and to enter into this
Agreement. Employer hereby employs Employee and Employee hereby agrees to be so
employed as Chairman of the Board and Chairman of the Executive Committee of the
Board of Employee and to work at such places as directed by Employer. The
prior contract of the Employee is hereby extended through December 31, 1996.
Except as specifically provided herein, the terms of this Agreement shall apply
to all periods after December 31, 1996 and shall continue through December 31st,
2002 or until terminated by one of the parties as hereinafter provided, or until
the Employee's death, retirement or permanent disability. At the end of the term
this Agreement shall continue for consecutive one year terms unless either party
gives written notice of its intent not to renew the Agreement at least 60 days
prior to the expiration of the original term or any renewal or extended term.
2. Duties:
a. The Employee agrees to accept the duties commonly involved in carrying
out the position for which employed and any other duties as may be
required by Employer. The Employer shall have the right at any time
during the term of this Agreement to change the duties of Employee or
assign duties different from the duties originally assigned.
b. The Employee will not engage in any employment or enterprise
inconsistent with his duties hereunder. Employee shall travel as
reasonably required in the performance of his duties hereunder.
c. The Employee as Chairman of the Board and Chairman of the Executive
Committee of the Board, and in such other offices as
from time to time assigned in Davel or associated enterprises, shall
perform the duties of Chairman of the Board and Chairman of the
Executive Committee of the Board which shall consist of the duties
normally associated with such positions and such other duties as shall
be from time to time assigned. The Employee shall report to and be
responsible to the Board of Directors in the regular conduct of his
duties.
3. Base Compensation: The Employee shall be paid a base salary of
$400,000.00 per annum during the term of this Agreement. The Employee's base
compensation shall be payable in accordance with Employer's payroll practices.
Employee shall be reimbursed for his reasonable expenses incurred in the
performance of his duties hereunder upon presentation of proper evidence thereof
as required by Employer.
4. Bonus. In addition to the base compensation, the Employee shall receive
an annual bonus to be determined as a percentage of the Employee's base salary.
The range of percentages to be applied to the Employee's base salary for the
computation of bonus shall be based on the percentage by which the Annual Before
Tax Profit (ABTP) of the Company exceeds the Annual Before Tax Profit for 1996
("ABTP Increase"). For the purposes of this Agreement the ABTP shall be adjusted
for extraordinary and non-recurring items of Employer. From within the
percentage range so established, the Compensation Committee, shall determine the
specific percentage to be applied based on the performance and contribution of
the Employee. The range of percentages shall be established in accordance with
the following table:
If the ABTP the range of percentages
Increase is for determining bonus shall be
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0 to 17% 5% to 15%
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(Greater-than) 17% to 22% 10% to 20%
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(Greater-than) 22% to 27% 15% to 25%
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(Greater-than) 27% to 32% 20% to 35%
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(Greater-than) 32% 30% to 45%
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5. Stock Options and Grants:
a) On September 1, 1996 Employee shall be granted 200,000 fully
vested Options in accordance with the terms of the Stock Option Plan
of the Company to purchase common stock of the Company
at an exercise price equal to the closing price of the Common Stock on
September 1, 1996 or, if no such price is available, on the last day
prior to September 1, 1996 for which a closing market price is
available. Further, options to purchase stock of the Employer shall be
awarded to the Employee annually pursuant to the terms of this
Employment Contract and otherwise in accordance with the terms and
conditions of the Employer's Stock Option Plan based upon the
percentage by which the Annual Before Tax Profit (ABTP) of the Company
exceeds the Annual Before Tax Profit for 1996 ("ABTP Increase"). For
the purposes of this Agreement the ABTP shall be adjusted for
extraordinary and non-recurring items of Employer. The actual number
of options awarded shall be determined by multiplying the Employee's
base salary, as set forth at (P)3, above, times a percentage, selected
by the Compensation Committee based upon the performance and
contribution of the Employee, from the range of percentages applicable
to the ABTP Increase as set forth in the following table:
If the Percentage ABTP the range of percentages
Growth for Year is for determining option awards shall be
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0 to 17% 10% to 20%
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(Greater-than) 17% to 22% 21% to 40%
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(Greater-than) 22% to 27% 41% to 80%
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(Greater-than) 27% to 32% 81% to 160%
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(Greater-than) 32% 161% to 240%
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The dollar amount so determined shall be divided by the exercise price
of the options awarded to determine the actual number of options. The
exercise price shall be determined in accordance with the terms and
conditions of the Employer's Stock Option Plan. Except as otherwise
accelerated, options so awarded shall vest one- third when awarded,
one-third twelve months after the date of the award and the balance 24
months after the date of the award. All options shall be exercisable
when vested.
b. The Employee shall be eligible for annual stock grants valued at
$100,000. One-half of the shares constituting each annual grant shall
not be transferred for six months following such grant; the remaining
one-half of such shares shall not be transferred for eighteen months
following such grant. Each annual grant shall be deemed to be issued
on the first business day of each calendar year from 1997 through
2002.
6. Other Benefits and Vacation:
a. Employer has established a 401(k) Profit Sharing Plan to provide
for voluntary Employee before and after tax contributions. The Profit
Sharing Plan may also provide for Employer contributions as may be
from time to time determined by the Employer consistent with and
subject to the terms of the plan as established by the Employer.
Employee may participate in such plan provided he is otherwise
qualified under the terms and conditions of any such Profit Sharing
Plan.
b. The Employee shall be entitled to vacations in accordance with
the regular policies of the employer as in effect from time to time.
Vacation shall be scheduled at the convenience of the Employer.
c. The Employer shall maintain an IRC (S)125 plan, or similar
arrangement as from time to time permitted by the Internal Revenue
Code as then in effect, for health insurance premiums and other
permitted (S)125 benefits and the Employee shall be permitted to
divert compensation for such premiums and other benefits.
d. The Employee shall be entitled to participate in the regular
Health Insurance plan of the Employer as from time to time in effect
on the terms and conditions as provided for employees generally.
e. The Employer shall provide reasonable transportation for Employee
for business use to be accounted for by the Employee consistent with
the normal business practices of Employer as from time to time
established.
7. Nondisclosure and Noncompetition: The Employee hereby agrees as a
condition of Employment to
a. At all times while this Agreement is in force and after its
termination or expiration for whatever reason, the Employee agrees to
refrain from disclosing, either directly or indirectly, the Employer's
customer lists, trade secrets, or other confidential material.
Employee agrees to take reasonable security measures to prevent
accidental disclosure of such information. All files, records,
documents, drawings, specifications, equipment and similar items
relating to Employer's business, whether prepared by the Employee or
otherwise coming into his possession, shall remain the exclusive
property of the Employer.
b. During the term of this Agreement, the Employee shall not,
directly or indirectly, either as an employee, employer, consultant,
agent, principal, partner, stockholder, corporate officer, director or
in any other individual or representative capacity, engage or
participate in any business of any nature which is in competition in
any way with the business of the Employer except by permission of the
Employer.
c. For a period of one (1) year after the expiration or termination
of this Agreement, except in the case of a termination by the Employer
for any reason other than the causes set forth at (P)8(c) below, the
Employee shall not, directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or
representative capacity, engage or participate in any business of any
nature which is in competition with the Employer in the business of
telecommunications within the existing market areas of the Employer
for which Employee had significant responsibility and in which
Employee materially participated in the management and operation of
the Employer.
d. Employer shall be entitled to injunctive and/or other equitable
relief to prevent or remedy a breach of the provisions of the
Agreement and to secure their enforcement, in addition to any other
remedies or damages which may be available to Employer.
8. Termination:
a. Upon a change in control of the ownership of Employer all stock
options previously awarded to the Employee shall vest and be
immediately exercisable. Further, the term of this Agreement shall be
revised to eighteen months from the date of such change in control if
at the time of such change of control the remaining term of this
Agreement, or any extended or renewal term, is less than eighteen
months. If the Employer, after a change in control, elects to
terminate this Agreement in accordance with the terms of (P)8(a) the
amount of severance pay then due, in addition to all salary and bonus
pro-rated through the date of termination, shall be equal to the
greater of six months base compensation or the remaining base
compensation due under this Agreement in lieu of the amount otherwise
due under (P)8(a). A change of control shall be deemed to have
occurred at anytime Xxxxx Xxxx (the principal shareholder) or his
descendants own less than 30% of the issued and outstanding voting
shares of the Employer.
b. Any other provision of this Agreement notwithstanding, the
Employer may terminate this Agreement without notice if the
termination is based on a violation by the Employee of paragraph 7 of
this Agreement, or on fraud, embezzlement, securities law violation,
sexual harassment of other employees, criminal indictment or
conviction, or other conduct involving crimes, misdemeanors or moral
turpitude. In the event of termination pursuant to this paragraph the
Employee shall be entitled only to the base compensation provided for
herein earned prior to the date of termination computed pro rata up to
and including the date of termination.
c. The death or permanent disability of the Employee shall terminate
this Agreement and the employment of the Employee. Upon the death or
permanent disability of the Employee, all previously awarded options
shall vest and become immediately exercisable by the estate of the
employee.
9. Severability: In the event any one or more of the provisions of this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
10. Assignment: This Agreement shall not be assignable, in whole or in
part, by the Employee but shall inure to the benefit of and bind the successors
and any assigns of Employer.
11. Fees and Costs: If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the party substantially
prevailing shall be entitled to its costs incurred in such action, including
reasonable attorney fees, in addition to any other relief that may be proper
hereunder or at law or in equity.
12. Notices: All notices hereunder shall be given in writing by personal
service or certified mail, return receipt requested, postage prepaid, addressed
to the
parties at the following respective addresses, or at such other address as may
be designated:
Employer Employee
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Davel Communications Group, Inc. Xxxxx Xxxx
000 X. Xxxxxx 0000 Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000 Xxxxxxxxxxxx, XX 00000
13. Entire Agreement: This Agreement constitutes the entire Agreement of
the parties. No modification, variance or change in any of its terms or
provisions shall be valid unless in writing and signed by both parties.
14. Governing Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.
15. Waiver: The failure of either party at any time to require
performance by the other party of any provision hereunder shall in no way affect
the right of that party thereafter to enforce the same or any other provision of
this Agreement; nor shall the waiver by either party of the breach of any
provision hereof be a waiver of any subsequent breach of such provision or of
the provision itself.
IN WITNESS WHEREOF, the parties have executed this Agreement in triplicate
originals on this 12th day of September, 1996
DAVEL COMMUNICATIONS GROUP, INC.
______________________________________
Xxxxxx X. Xxxxxx,
Chairman of the Compensation Committee
EMPLOYEE
______________________________________
Xxxxx Xxxx, Chairman of the Board
