EXHIBIT 10.2
EXECUTIVE RETENTION BONUS AGREEMENT
THIS EXECUTIVE RETENTION BONUS AGREEMENT (this "Agreement") is by and
between Allegiance Telecom Company Worldwide (the "Company") and Xxxxxxx X. Xxxx
(the "Employee"), effective as of the date set forth under the signature of the
Company below.
WHEREAS, Employee is an employee of the Company or an Affiliate of the
Company; and WHEREAS, the Compensation Committee of Allegiance Telecom, Inc.'s
Board of Directors recognizes the uncertainty and questions that may arise in
the context of a recapitalization transaction which could result in the
departure or distraction of key employee personnel to the detriment of
Allegiance Telecom, Inc., its Affiliates and its stakeholders; and WHEREAS, the
Company has determined that it is in the best interests of the Company, its
Affiliates and its stakeholders to incentivize key employees to remain at the
Company or its Affiliates during the process of, and for a reasonable time
after, the recapitalization transaction.
NOW, THEREFORE, in consideration for the promises and mutual covenants
herein contained, it is hereby agreed by the parties as follows:
1. RETENTION PAYMENT. Employee will be entitled to an aggregate retention
bonus equal to $500,000 (the "Retention Payment"), payable in installments
set forth below, provided that Employee has been continuously employed by
the Company or any Affiliate through December 31, 2003 and subject to the
other terms and conditions of this Agreement:
o 25% of the Retention Payment will be made on or about March 14, 2003;
o 25% of the Retention Payment will be made on or about September 8,
2003; and
o 50% of the Retention Payment will be made on or about December 31,
2003.
2. TERMINATION OF EMPLOYMENT.
(a) TERMINATION DUE TO DEATH, DISABILITY OR BY COMPANY WITHOUT CAUSE.
Notwithstanding anything herein to the contrary, if, prior to December
31, 2003, Employee's employment with the Company and all Affiliates is
terminated because of (i) death of Employee, (ii) Disability of
Employee or (iii) termination by the Company or any Affiliate without
Cause, then Employee will be entitled to the FULL AMOUNT of the
Retention Payment.
(b) TERMINATION BY COMPANY FOR CAUSE OR EMPLOYEE RESIGNATION FOR ANY
REASON. If, prior to December 31, 2003, Employee's employment with the
Company and all Affiliates is terminated (i) by the Company or any
Affiliate for Cause or (ii) because of Employee's resignation for any
reason, then Employee will (A) immediately repay all Net Retention
Payment received and (B) not have any rights to any Retention Payment.
3. NO SPECIAL EMPLOYMENT RIGHTS. Nothing in this Agreement will (a) be deemed
to confer on Employee any right to employment or continued employment with
the Company or any Affiliate, or (b) affect any right that the Company or
any Affiliate may have to terminate the employment of Employee at any time.
4. OTHER EMPLOYEE BENEFITS. No payments made hereunder shall be includible as
an annual or long-term bonus or other compensation in creditable
compensation in computing benefits under any employee benefit plan of the
Company or any Affiliate.
5. WITHHOLDINGS. The Company may withhold from all payments due to Employee
(or his/her beneficiary or estate) hereunder all taxes or other amounts
which, by applicable federal, state, local or other law, the Company is
required to withhold therefrom.
6. OBLIGATIONS TO THE COMPANY; RIGHT TO WITHHOLD FROM PAYCHECK. If Employee
becomes entitled to payment of any installment of a Retention Payment
hereunder, and if at such time Employee has outstanding any debt,
obligation, or other liability representing an amount owed to the Company
or any Affiliate, any amount of such indebtedness, obligation or other
liability may, at the Company's option, to the extent lawful, be deducted
by the Company from the amount of the Net Retention Payment then payable to
Employee or Employee's beneficiary pursuant to this Agreement. In the event
Employee is required to repay any Net Retention Payment, Employee
authorizes the
1
Company and its Affiliates to deduct any amount of such payment from any
salary, bonus, vacation pay, commissions or any other compensation earned
by Employee and Employee specifically authorizes the Company and its
Affiliates to deduct any amount of such payment from Employee's
paycheck(s), including Employee's final paycheck (to the extent lawful).
Any such deductions shall not relieve Employee of his/her obligation to pay
any remaining amounts owing under this Agreement or any other agreement.
CONSENT TO SUCH DEDUCTION(S) SHALL BE EVIDENCED BY EMPLOYEE'S SIGNATURE ON
THIS AGREEMENT.
7. LETTER OF CREDIT. The Company shall use its reasonable efforts to support
its obligations under this Agreement with a letter of credit in a form
acceptable to the Company.
8. CONFIDENTIAL INFORMATION. Employee shall keep the existence and contents of
this Agreement in strictest confidence and shall not disclose it to anyone
other than Employee's tax and financial advisors, attorneys and immediate
family members, provided that Employee advises such persons that the
information is confidential. Employee may discuss this Agreement with the
Company's Human Resources or Legal departments or the head of Employee's
department.
9. DEFINITIONS. As used in this Agreement, the following terms shall have the
respective meanings set forth below:
(a) "Affiliate" means any entity that directly or indirectly is controlled
by, controls or is under common control with the Company.
(b) "Cause" means (i) embezzlement or misappropriation of funds of the
Company, any of its Affiliates or their successors; (ii) use of illegal
drugs or alcohol that materially impairs Employee's ability to fulfill
his duties as an employee; (iii) willful disclosure of trade secrets or
confidential information of or any material violation of any other
material published policy of the Company, any of its affiliates or
their successors; or (iv) conviction or confession of a criminal
felony.
(c) "Company" means Allegiance Telecom Company Worldwide, a Delaware
corporation and the successor to, or transferee of all or substantially
all of the assets of, the Company.
(d) "Disability" means "disability" as defined in the Company's Long-Term
Disability Insurance Plan.
(e) "Net Retention Payment" means the Retention Payment less any
withholdings taken by the Company or any Affiliate for taxes and other
governmental charges.
10. SUCCESSORS; BINDING AGREEMENT. (a) This Agreement is personal to Employee
and without the prior written consent of the Company, shall not be
assignable by Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by Employee's legal representatives. (b) This Agreement shall
inure to the benefit of and be binding upon the Company and its successors.
The Company agrees that, for so long as it has any obligations under this
Agreement, it will cause any successor or transferee (if other than the
Company) to unconditionally assume, by written instrument delivered to
Employee (or his/her beneficiary or estate), all of the obligations of the
Company hereunder.
11. NOTICES. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be
in writing and shall be deemed to have been given when personally delivered
or on the fifth day after being sent via U.S. certified or registered mail,
return receipt requested:
TO THE COMPANY:
Allegiance Telecom Company Worldwide,
Attn: Xxxx Xxxxxx, Human Resources Department
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
TO EMPLOYEE: at Employee's office location or primary
residence listed in the Company's records
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
Notwithstanding anything herein to the contrary, the Company may provide
Employee with written notice by sending Employee an email.
12. GOVERNING LAW; VALIDITY. The validity, interpretation, and enforcement of
this Agreement shall be governed by the laws of the State of Texas as to
all matters, including, but not limited to, matters of validity,
construction and performance, without regard to principles of conflict of
laws. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal
or unenforceable in any respect under any applicable law or rule in any
2
jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained
herein.
13. CONSENT TO JURISDICTION; AGENT FOR SERVICE OF PROCESS; LIMITATION OF
LIABILITY. Employee consents to the non-exclusive jurisdiction and venue in
the state and federal courts located in Dallas County, Texas and waives any
defense of forum non conveniens. Service of legal process on the Company
with respect to a claim under this Agreement shall be made upon the General
Counsel of Allegiance Telecom, Inc. IN NO EVENT SHALL THE COMPANY OR ANY
AFFILIATE BE LIABLE UNDER OR RELATING TO THIS AGREEMENT FOR ANY AMOUNT IN
EXCESS OF THE RETENTION PAYMENT. NOTWITHSTANDING ANY OTHER PROVISION
HEREOF, THE COMPANY SHALL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES.
14. INTEREST; PAYMENT OF COLLECTION FEES. Employee agrees to repay all amounts
due under this Agreement to the Company within ten (10) days of Employee's
termination date. Any amounts due to the Company under this Agreement and
not paid shall accrue interest at 1.5% per month (or if less, the maximum
rate permissible under law) starting from the 11th day after Employee's
termination date until paid. Employee agrees to pay all of Company's costs
of collection relating to or in connection with this Agreement, including
reasonable attorneys' fees.
15. WAIVER. Employee's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right Employee or the Company may
have hereunder shall not be deemed to be a waiver of such provision or
right or any other provision or right of this Agreement.
16. ENTIRE AGREEMENT; NO AMENDMENT. This Agreement contains the entire
agreement and supersedes all prior and contemporaneous oral or written
communications and agreements between the parties relating to the subject
matter of this Agreement. Neither this Agreement, nor any of its terms, may
be changed, added to, amended, waived or varied except in writing signed by
Employee and by either the CEO of the Company, the General Counsel of the
Company or the General Counsel of Allegiance Telecom, Inc.
17. COUNTERPARTS; DELIVERY BY FACSIMILE. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument. This Agreement
any amendments hereto to the extent signed and delivered by means of a
facsimile machine, will be treated in all manner and respects as an
original agreement and will be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in
person. At the request of any party, each other party hereto will reexecute
original forms thereof and deliver them to all other parties. No party
hereto will raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforceability of a contract and each such party forever
waives any such defense.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
dates set forth below.
BY SIGNING BELOW, EMPLOYEE ACKNOWLEDGES THAT HE/SHE HAS (A) READ THIS AGREEMENT;
AND (B) UNDERSTANDS THE TERMS AND CONDITIONS OF THIS AGREEMENT.
ALLEGIANCE TELECOM COMPANY WORLDWIDE
By: ________________________
Name: Xxxxx X. Xxxxxxx
Its: Chairman and Chief Executive Officer
Effective Date: ______________________
EMPLOYEE: ___________________________
Printed Name : __________________________
Date: __________________________________
3
