EXHIBIT 10.2
EMPLOYMENT AGREEMENT, DATED OCTOBER 17, 1997, BETWEEN COMMUNICATIONS BUYING
GROUP, INC. AND XXXXXX XXXX.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of the 17th day of
October, 1997 by and between Communications Buying Group, Inc. ("Employer" or
the "Company") and Xxxxxx Xxxx ("Employee").
R E C I T A L S
WHEREAS, Employer desires to hire and employ Employee as President of
Employer, or in such other position with an affiliate corporation of Employer as
Employer may from time-to-time decide, as provided herein; and
WHEREAS, Employee desires to be employed by Employer as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. EMPLOYMENT. The Company agrees to employ Employee and Employee hereby
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agrees to be employed by the Company or by such of its subsidiary corporations
as determined by the Company, on a full-time basis, for the period and upon the
terms and conditions hereinafter set forth.
2. CAPACITY AND DUTIES. Employee shall be employed as President of
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Employer. During his employment, Employee shall perform the duties and bear the
responsibilities commensurate with his position and shall serve the Employer
faithfully and to the best of his ability. Employee shall devote 100% of his
working time to carrying out his obligations hereunder. Notwithstanding the
foregoing, Employee shall be entitled to serve as director or trustee of other
corporations or organizations provided that his responsibilities to the Company
are not compromised by any such position and provided further that he obtains
the prior written consent of the Company (not to be unreasonably withheld)
before taking any such position.
3. COMPENSATION AND BENEFITS.
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3.1 The Company shall pay Employee during the Term of this Agreement
an annual base salary, payable semi-monthly in arrears. The annual base salary
shall be Two Hundred Thousand Dollars ($200,000.00).
3.2 In addition to the base salary, Employee shall be eligible for an
annual performance bonus in an exact amount to be determined by the Board of
Directors of the Company or the Compensation Committee of the Board. The annual
bonus will be determined in accordance with the bonus plan of the Company's
parent, ICG Telecom Group, Inc., and will be based on objectives and goals set
for the Company in consultation with Employee (the annual bonus is expected to
be approximately 30% of annual base salary if all objectives and goals are met).
3.3 In addition to salary and bonus payments as provided above, the
Company shall provide Employee, during the Term of this Agreement, with the
benefits of such insurance plans, hospitalization plans, stock plans, retirement
plans and other employee fringe benefits (including sick leave and four (4)
weeks vacation time) as shall be generally provided to executive officers of the
Company and for which Employee may be eligible under the terms and conditions
thereof.
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3.4 Throughout the Term of this Agreement, the Company shall
reimburse Employee for all out-of-pocket automobile expenses incurred by him in
traveling between Cincinnati and Cleveland (estimated to be approximately
$1,400.00 per month).
3.5 Throughout the Term of this Agreement, the Company shall
reimburse Employee for all reasonable out-of-pocket expenses incurred by
Employee in connection with the business of the Company and the performance of
his duties under this Agreement, upon presentation to the Company by Employee of
an itemized accounting of such expenses with reasonable supporting data.
3.6 The Company shall provide to Employee stock options relating to
the stock of the Company's ultimate parent, ICG Communications, Inc., pursuant
to and subject to the terms and conditions of (including vesting schedule) the
ICG Incentive Stock Option Plan. Employee will receive a grant of 25,000 stock
options upon employment with an exercise price equal to the closing price of ICG
common stock on the date of this Agreement.
4. TERM. The initial term of this Agreement shall be for two (2) years,
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commencing on October 17, 1997 ("Term"). Upon completion of the first twelve
(12) months of the Term, this Agreement will automatically renew from month-to-
month such that there will always be twelve (12) months remaining in the Term,
unless and until either party shall give at least thirty (30) days notice to the
other of his or its intention to terminate this Agreement. The applicable
provisions of Section 6, 7, 8, 9 and 10 shall remain in full force and effect as
provided and for the time periods specified in such Sections notwithstanding the
termination of this Agreement; all other obligations of either party to the
other under this Agreement shall terminate at the end of the Term.
5. TERMINATION.
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5.1 If Employee dies during the Term of this Agreement, the Company
shall pay his estate the compensation that would otherwise be payable to him for
the remaining term of this Agreement.
5.2 If, during the Term of this Agreement, Employee is prevented from
performing his duties by reason of illness or incapacity for one hundred forty
(140) days in any one hundred eighty (180) day period, the Company may terminate
this Agreement, upon thirty (30) days prior notice thereof to Employee or his
duly appointed legal representative.
5.3 Pursuant to and subject to the provisions of Section 4 hereof,
the Company may terminate this Agreement upon at least thirty (30) days prior
notice to Employee upon the happening of any of the following events:
5.3.1 The sale by the Company of substantially all of its
assets to a single purchaser or associated group of purchasers who are not
affiliates of the Company.
5.3.2 The sale, exchange or other disposition in one or more
related transactions resulting in a change of ownership of fifty percent (50%)
or more of the outstanding voting stock of the Company to or with a person, firm
or corporation not then an affiliate of the Company.
5.3.3 The merger or consolidation of the Company in a
transaction not involving an affiliate of the Company in which the shareholders
of the Company receive less than fifty (50%) of the outstanding voting stock of
the new continuing corporation.
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5.3.4 A bona fide decision by the Company to terminate its
business and liquidate its assets (but only if such liquidation is not part of a
plan to carry on the Company's business through its shareholders).
For the purpose of this Agreement, the term "affiliate" means a person, firm or
corporation that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with the Company.
5.4 Pursuant to and subject to the provisions of Section 4 hereof,
the Company may terminate this Agreement at any time for gross negligence or
intentional misconduct by the Employee.
5.5 The Company may terminate this Agreement immediately upon the
conviction of Employee of theft, fraud, embezzlement or other felony, or for a
material breach by Employee of any obligation or covenant created by or under
this Agreement.
5.6 Employee may terminate this Agreement upon at least thirty (30)
days prior notice to the Company upon the happening of any of the events
described in Section 5.3 above.
5.7 If this Agreement is terminated by the Company under Section 4 or
Subsections 5.2, 5.3 or 5.4 above, or by Employee under Subsection 5.6 above,
during the Term hereof, the Company shall pay Employee a Termination Fee equal
to Employee's then current monthly base salary for the number of months
remaining in the Term. Such Termination Fee will be paid in a lump sum within
thirty (30) days from the date of termination.
6. COVENANT NOT TO COMPETE.
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6.1 During the Term of this Agreement (or, if longer, during the term
of Employee's employment with the Company or any of its affiliates) and for a
period of twelve (12) months after termination of this Agreement (or, if later,
termination of Employee's employment with the Company or any of its affiliates),
Employee shall not, directly or indirectly, own, manage, operate, control, be
employed by, or participate in the ownership, management, operation or control
of a business that is engaged in the same business as the Company within any
area or at any location constituting, during the term of Employee's employment
and/or at the time Employee's employment is terminated, a Relevant Area. For the
purposes of this Section 6, including all subsections of this Section 6, the
business in which the Company is engaged is the business commonly known as the
competitive access and network services business and all other services the
Company provides during the term of Employee's employment ("Services"). The
"Relevant Area" shall be defined for the purposes of this Agreement as any area
located within, or within fifty (50) miles of, the legal boundaries or limits of
any city within which the Company or any affiliate thereof is providing
Services, has commenced the acquisition of any authorizations, rights of way or
facilities or has commenced the construction of facilities for the purpose of
providing Services, or in which the Company has publicly announced or privately
disclosed to Employee that it plans to provide Services.
6.2 During the Term of this Agreement (or, if longer, during the term
of Employee's employment with the Company or any of its affiliates) and for a
period of twelve (12) months after termination of this Agreement (or, if later,
termination of Employee's employment with the Company or any of its affiliates),
Employee shall not (i) directly or indirectly cause or attempt to cause any
employee of the Company or any of its affiliates to leave the employ of the
Company or any affiliate, (ii) in any way interfere with the relationship
between the Company and any employee or between an affiliate and any employee of
the affiliate, or (iii) interfere or attempt to interfere with any transaction
in which the Company or
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any of its affiliates was involved during the Term of this Agreement or
Employee's employment, whichever is longer.
6.3 Employee agrees that, because of the nature and sensitivity of
the information to which he will be privy and because of the nature and scope of
the Company's business, the restrictions contained in this Section 6 are fair
and reasonable.
7. CONFIDENTIAL INFORMATION.
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7.1 The relationship between the Company and Employee is one of
confidence and trust. This relationship and the rights granted and duties
imposed by this Section shall continue until a date ten (10) years from the date
Employees employment is terminated.
7.2 As used in this Agreement (i) "Confidential Information" means
information disclosed to or acquired by Employee about the Companys plans,
products, processes and services including the Services and any Relevant Area,
including information relating to research, development, inventions,
manufacturing, purchasing, accounting, engineering, marketing, merchandising,
selling, pricing and tariffed or contractual terms, customer lists and prospect
lists or other market information, with respect to any of the Companys then
current business activities; and (ii) "Inventions" means any inventions,
discoveries, concepts and ideas, whether patentable or not, including, without
limitation, processes, methods, formulas, and techniques (as well as related
improvements and knowledge) that are based on or related to Confidential
Information, that pertain in any manner to the Companys then currently used
technology, expertise or business and that are made or conceived by Employee,
either solely or jointly with others, and while employed by the Company or
within six (6) months thereafter, whether or not made or conceived during
working hours or with the use of the Companys facilities, materials or
personnel.
7.3 Employee agrees that he shall at no time during the term of his
employment or at any time thereafter disclose any Confidential Information or
component thereof to any person, firm or corporation to any extent or for any
reason or purpose or use any Confidential Information or component thereof for
any purpose other than the conduct of the Companys business.
7.4 Any Confidential Information or component thereof that is
directly or indirectly originated, developed or perfected to any degree by
Employee during the term of his employment by the Company shall be and remain
the sole property of the Company and shall be deemed trade secrets of the
Company.
7.5 Upon termination of Employee's employment pursuant to any of the
provisions herein, Employee or his legal representative shall deliver to the
Company all originals and all duplicates and/or copies of all documents,
records, notebooks, and similar repositories of or containing Confidential
Information then in his possession, whether prepared by him or not.
7.6 Employee agrees that the covenants and agreements contained in
this Section 7 are fair and reasonable and that no waiver or modification of
this Section or any covenant or condition set forth herein shall be valid unless
set forth in writing and duly executed by the parties hereto. Employee agrees
to execute such separate and further confidentiality agreements embodying the
provisions of this Section 7 as the Company may reasonably request.
8. INJUNCTIVE RELIEF. Upon a material breach or threatened material
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breach by Employee of any of the provisions of Sections 6 and 7 of this
Agreement, the Company shall be entitled to an injunction restraining Employee
from such breach. Nothing herein shall be
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construed as prohibiting the Company from pursuing any other remedies for such
breach or threatened breach, including recovery of damages from Employee.
9. NO WAIVER. A waiver by the Company of a breach of any provision of
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this Agreement by Employee shall not operate or be construed as a waiver of any
subsequent or other breach by Employee.
10. SEVERABILITY. It is the desire and intent of the parties that the
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provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision or portion of
this Agreement shall be adjudicated to be invalid or unenforceable, this
Agreement shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of such Section in the particular jurisdiction in which
such adjudication is made.
11. NOTICES. All communications, requests, consents and other notices
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provided for in this Agreement shall be in writing and shall be deemed given if
mailed by first class mail, postage prepaid, certified or return receipt
requested to the last known address of the recipient.
12. GOVERNING LAW. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of Colorado.
13. ASSIGNMENT. The Company may assign its rights and obligations under
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this Agreement to any affiliate of the Company or, subject to the provisions of
Section 5.3, to any acquirer of substantially all of the business of the
Company, and all covenants and agreements hereunder shall inure to the benefit
of and be enforceable by or against any such assignee. Neither this Agreement
nor any rights or duties hereunder may be assigned or delegated by Employee.
14. AMENDMENTS. No provision of this Agreement shall be altered, amended,
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revoked or waived except by an instrument in writing, signed by each party to
this Agreement.
15. BINDING EFFECT. Except as otherwise provided herein, this Agreement
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shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs, successors and assigns.
16. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
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number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
17. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
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understanding of the parties and supersedes all prior understandings, agreements
or representations by or between the parties, whether written or oral, which
relate in any way to the subject matter hereof (including without limitation the
Employment Agreement dated as of January 19, 1995 and any other existing
employment agreements). Employer does not have, and shall not have, any
obligations to Employee pursuant to the Employment Agreement dated January 19,
1995. Without limitation of the foregoing, Employer has no obligations to
Employee under or in connection with Paragraphs 5 and 13 of such Employment
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
/s/ Xxxxxx Xxxx
______________________________________
XXXXXX XXXX
COMMUNICATIONS BUYING GROUP, INC.
By: /s/ Xxxx Xxxxxx
___________________________________
Name: XXXX XXXXXX
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