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FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: June 30, 1998 Commission File Number: 0-22610
DAVEL COMMUNICATIONS GROUP, INC.
--------------------------------
(Exact name of registrant as specified in its charter)
ILLINOIS 37-1064777
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) I.D. No.)
1429 MASSARO BOULEVARD, TAMPA, FLORIDA 33619
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (813) 623-3545
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Indicate by check mark whether the Registrant has (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
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As of August 18, 1998, the number of shares outstanding of the Registrant's
Common Stock was 5,772,209.
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This Form 10-Q/A is being filed solely for the purpose of including certain
exhibits which were inadvertently omitted from the Form 10-Q of Davel
Communications Group, Inc. filed on August 14, 1998.
PART II - OTHER INFORMATION
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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Exhibit No. Item
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10.11 Investment Agreement, dated June 29, 1998, among Davel
Communications Group, Inc., Samstock, L.L.C. and David R.
Hill.
10.12 Shareholders Agreement, dated as of June 29, 1998, among
Samstock, L.L.C., David R. Hill and, solely for purposes of
Section 2(a), 2(b), 3, 4, 6 and 8 through 19 thereof, Davel
Communications Group, Inc.
10.13 Employment Agreement, dated as of June 1, 1998, between
Davel Communications Group, Inc. and Robert D. Hill.
10.14 Employment Agreement, dated as of June 1, 1998, between
Davel Communications Group, Inc. and Theodore C. Rammelkamp,
Jr.
10.15 Employment Agreement, dated as of June 1, 1998, between
Davel Communications Group, Inc. and Michael E. Hayes.
10.16 Employment Agreement, dated as of June 1, 1998, between
Davel Communications Group, Inc. and Paul B. Demirdjian.
10.17 Employment Agreement, dated as of June 1, 1998, between
Davel Communications Group, Inc. and Marlin E. Turnipseed.
10.18 Third Amendment to Credit Agreement, dated as of July 3,
1998, by and among Davel Communications Group, Inc. and the
lenders party thereto.
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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 thereunto duly authorized.
DAVEL COMMUNICATIONS GROUP, INC.
Date: August 18, 1998 /s/ Michael E. Hayes
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Michael E. Hayes
Senior Vice President and Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No. Item
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10.11 Investment Agreement, dated June 29, 1998, among Davel
Communications Group, Inc., Samstock, L.L.C. and David R. Hill.
10.12 Shareholders Agreement, dated as of June 29, 1998, among
Samstock, L.L.C., David R. Hill and, solely for purposes of
Section 2(a), 2(b), 3, 4, 6 and 8 through 19 thereof, Davel
Communications Group, Inc.
10.13 Employment Agreement, dated as of June 1, 1998, between Davel
Communications Group, Inc. and Robert D. Hill.
10.14 Employment Agreement, dated as of June 1, 1998, between Davel
Communications Group, Inc. and Theodore C. Rammelkamp, Jr.
10.15 Employment Agreement, dated as of June 1, 1998, between Davel
Communications Group, Inc. and Michael E. Hayes.
10.16 Employment Agreement, dated as of June 1, 1998, between Davel
Communications Group, Inc. and Paul B. Demirdjian.
10.17 Employment Agreement, dated as of June 1, 1998, between Davel
Communications Group, Inc. and Marlin E. Turnipseed.
10.18 Third Amendment to Credit Agreement, dated as of July 3, 1998, by
and among Davel Communications Group, Inc. and the lenders party
thereto.
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EXHIBIT 10.11
INVESTMENT AGREEMENT
--------------------
Investment Agreement dated June 29, 1998 (this "Agreement"), among Davel
Communications Group, Inc., an Illinois corporation (the "Company"), Samstock,
L.L.C., a Delaware limited liability company ("Investor"), and David R. Hill, an
individual residing in the State of Illinois ("Shareholder").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Investor and the Company are parties to a Stock Purchase Agreement
dated May 14, 1998 (the "Company Stock Purchase Agreement") pursuant to which,
among other things, the Company has agreed to issue and sell, and Investor has
agreed to purchase from the Company, 1,000,000 shares of common stock, no par
value, of the Company ("Common Stock");
WHEREAS, Investor and Shareholder are parties to a Stock Purchase agreement
dated May 14, 1998 (the "Shareholder Stock Purchase Agreement") pursuant to
which, among other things, Shareholder has agreed to sell, and Investor has
agreed to purchase from Shareholder, 500,000 shares of Common Stock;
WHEREAS, Investor and certain directors and members of management of the
Company (the "Management Shareholders") are parties to a Stock Purchase
Agreement pursuant to which, among other things, the Management Shareholders
have agreed to sell, and Investor has agreed to purchase from the Management
Shareholders, 123,900 shares of Common Stock (such Stock Purchase Agreement,
together with the Company Stock Purchase Agreement and the Shareholder Stock
Purchase Agreement, the "Stock Purchase Agreements");
WHEREAS, the closing of the transactions contemplated by each of the Stock
Purchase Agreements is occurring concurrently with the execution and delivery of
this Agreement;
WHEREAS, concurrently herewith, Investor and Shareholder have executed and
delivered a Shareholders Agreement of even date herewith (the "Shareholders
Agreement");
WHEREAS, the Company Stock Purchase Agreement and the Shareholder Stock
Purchase Agreement require that this Agreement be executed and delivered by the
Company, Investor and Shareholder at or prior to the closing of the transactions
contemplated by such agreements.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
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ARTICLE I
DEFINITIONS
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As used in this Agreement, the following terms shall have the following
meanings:
1.1 "Affiliate" means, with respect to any person, any other person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with such first person. As used in
this definition "control" (including, with correlative meanings, "controlled by"
and "under common control with") shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of management or
policies, whether through the ownership of securities or partnership or other
ownership interests, by contract or otherwise.
1.2 The terms "beneficial ownership," "person" and "group" shall have the
respective meanings ascribed to such terms pursuant to Regulation 13D-G adopted
by the Securities and Exchange Commission (the "SEC") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date
hereof. The term "affiliate" shall have the meaning ascribed to such term
pursuant to Rule 12b-2 under the Exchange Act, as in effect on the date hereof.
1.3 The "Combined Voting Power" at any measurement date shall mean the
total number of votes which could have been cast in an election of directors
of the Company had a meeting of the shareholders of the Company been duly held
based upon a record date as of the measurement date if all Company Voting
Securities then outstanding and entitled to vote at such meeting were present
and voted to the fullest extent possible at such meeting.
1.4 "Company Voting Securities" shall mean, collectively, Common Stock
(or any other security into which Common Stock is exchanged or converted), any
preferred stock of the Company (or any successor to the Company) that is
entitled to vote generally for the election of directors, any other class or
series of Company securities (or securities of any successor to the Company)
that is entitled to vote generally for the election of directors and any other
securities, warrants, options or rights of any nature (whether or not issued by
the Company or any successor to the Company) that are convertible into,
exchangeable for, or exercisable for the purchase of, or otherwise give the
holder thereof any rights in respect of, Common Stock (or any other security
into which Common Stock is exchanged or converted), preferred stock of the
Company (or any successor to the Company) that is entitled to vote generally for
the election of directors of the Company or any successor thereto, or any other
class or series of Company securities that is entitled to vote generally for the
election of directors of the Company or any successor thereto.
1.5 "Disinterested Director" means Independent Directors who, with
respect to any contract or transaction being considered or voted upon by the
Company's Board of Directors, have no financial interest in such contract or
transaction, either directly or by virtue of serving as an officer or director
of any other corporation, partnership, association or other organization that is
a party to such contract or transaction; provided, however, an Independent
Director shall not
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be deemed to have a financial interest in any contract or transaction by virtue
of holding Common Stock or options to acquire Common Stock.
1.6 "Effective Date" means the date of this Agreement.
1.7 "Independent Director" means a director of the Company who (i) is not
a current or former employee or officer of the Company, (ii) is not serving as a
designee of Investor or Shareholder pursuant to Section 4.3 or 4.4 hereof, and
(iii) does not beneficially own 5% or more of any class of capital stock of the
Company.
1.8 "Investor Group" means (i) Investor, (ii) any member of Investor and
Investor; provided, however, that publicly-held entities that would otherwise
fall within this definition (a "Public Investor Affiliate") shall not be treated
as members of the Investor Group hereunder unless any member of the Investor
Group (which, for purposes hereof, shall exclude such publicly-held entity) took
any action, directly or indirectly, to assist, encourage or induce such entity
in taking the relevant action to be attributed to the Investor Group hereunder.
1.9 "Shareholder Group" means (i) Shareholder and (ii) any Affiliate or
Shareholder Family Entity (as defined in the Shareholder's Agreement) of
Shareholder (other than the Company).
1.10 "Shares" means all shares of Company Voting Securities, whether now
owned or hereafter acquired.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
2.1 Investor represents and warrants to the Company and Shareholder as
follows:
(a) Investor is a limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized. Investor has the requisite power and authority to enter into this
Agreement and perform its obligations hereunder.
(b) This Agreement has been duly authorized by all necessary action on the
part of Investor, duly executed and delivered by Investor and constitutes the
legal, valid and binding obligation of Investor, enforceable against it in
accordance with its terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance by Investor of its obligations hereunder will conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under (i) the organizational documents of Investor, or (ii) any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Investor or its properties or assets, other than, in the case of clause (ii),
any such conflicts, violations or defaults that, individually or in the
aggregate, would not prevent Investor from performing its obligations under this
Agreement in any material respect.
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(d) As of the date hereof, no Shares are beneficially owned by Investor.
2.2 Shareholder represents and warrants to the Company and Investor as
follows:
(a) This Agreement has been duly authorized by all necessary action on the
part of Shareholder, duly executed and delivered by Shareholder and constitutes
a valid and binding obligation of Investor, enforceable against him in
accordance with its terms.
(b) Neither the execution and delivery of this Agreement nor the
performance by Shareholder of his obligations hereunder will conflict with, or
result in any violation of, or default (with or without notice or lapse or time,
or both) under any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Shareholder or his properties or assets, other than any
such conflicts, violations or defaults that, individually or in the aggregate,
would not prevent Shareholder from performing his obligations under this
Agreement in any material respect.
(c) As of the date hereof (and giving effect to the closing of the
transactions contemplated by the Shareholder Stock Purchase Agreement),
Shareholder beneficially owns 2,585,729 Shares (including 234,196 Shares that
may be acquired pursuant to outstanding options either currently, within the
next 60 days or at any time thereafter).
2.3 The Company represents and warrants to Investor and Shareholder as
follows:
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is organized. The
Company has the requisite power and authority to enter into this Agreement and
perform its obligations hereunder.
(b) This Agreement has been duly authorized by all necessary action on the
part of the Company, duly executed and delivered by the Company and constitutes
a valid and binding obligation of the Company, enforceable against it in
accordance with its terms.
(c) Neither the execution and delivery of this Agreement nor the
performance by the Company of its obligations hereunder will conflict with, or
result in any violation of, or default (with or without notice or lapse or time,
or both) under any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or its properties or assets, other than any
such conflicts, violations or defaults that, individually or in the aggregate,
would not prevent the Company from performing its obligations under this
Agreement in any material respect.
ARTICLE III
STANDSTILL AGREEMENT
--------------------
3.1 Acquisition of Company Voting Securities. Except as the same may be
approved by a majority of the Disinterested Directors in a specific resolution
to that effect adopted prior to the taking of such action, prior to the third
anniversary of the Effective Date, neither the Investor Group nor the
Shareholder Group shall, directly or indirectly, acquire, offer to acquire,
agree to
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acquire, make any proposal to acquire, become the beneficial owner of or obtain
any rights in respect of any Company Voting Securities, by purchase or
otherwise, or take any action in furtherance thereof, if the effect of such
acquisition, agreement or other action would be (either immediately or upon
consummation of any such acquisition, agreement or other action, or expiration
of any period of time provided in any such acquisition, agreement or other
action) to increase the aggregate beneficial ownership of Company Voting
Securities by the Investor Group or the Shareholder Group to such number of
Company Voting Securities that represents or possesses greater than 33.7 percent
of the Combined Voting Power, in the case of the Investor Group, and 37.0
percent of the Combined Voting Power of all Company Voting Securities, in the
case of the Shareholder Group. Notwithstanding the foregoing maximum
limitations, (a) no member of the Investor Group or the Shareholder Group shall
be obligated to dispose of any Company Voting Securities beneficially owned that
exceed such maximum limitations if, and solely to the extent that, its
beneficial ownership is or will be increased solely as a result of (i) a
repurchase of any Company Voting Securities by the Company or any of its
subsidiaries if such repurchase was approved by a majority of the Disinterested
Directors or (ii) in the case of any member of the Investor Group, the purchase
of Company Voting Securities by any Public Investor Affiliate unless any member
of the Investor Group took any action, directly or indirectly, to assist,
encourage or induce such Public Investor Affiliate to make such purchase and (b)
the foregoing shall not prohibit any purchase of Company Voting Securities
directly from the Company pursuant to the exercise of any rights,
oversubscription rights or standby purchase obligations in connection with
rights offerings by the Company or exercise of any stock options granted by the
Company or pursuant to any rights set forth in the Shareholders Agreement. For
purposes of calculating the maximum limitations specified above, all Company
Voting Securities that are the subject of an agreement, arrangement or
understanding pursuant to which the Investor Group (or any member thereof) or
the Shareholder Group (or any member thereof) has the right to obtain beneficial
ownership of such securities in the future shall also be deemed to be
outstanding and beneficially owned by the Investor Group (or the applicable
member thereof) or the Shareholder Group (or the applicable member thereof),
respectively.
3.2 Proxy Solicitations, Etc. Prior to the third anniversary of the
Effective Date, no member of the Investor Group or the Shareholder Group shall,
in any way, participate in, directly or indirectly, any "solicitation" of
"proxies" (as such terms are used in Regulation 14A promulgated under the
Exchange Act) to vote or consent with respect to any Company Voting Securities
or become a "participant" in an "election contest" (as such terms are used in
Rule 14a-11 under the Exchange Act) with respect to the Company, except, in each
case, with the prior approval of the Disinterested Directors; provided, however,
that members of the Shareholder Group may participate in the solicitation of
proxies with respect to matters recommended by the Company's Board of Directors.
3.3 No Groups, Voting Trusts, Etc. Except as the same may be approved by a
majority of the Disinterested Directors in a specific resolution to that effect
adopted prior to the taking of such action, prior to the third anniversary of
the Effective Date, neither the Investor Group nor the Shareholder Group shall
(a) form, join in or participate in the formation of a group with respect to any
Company Voting Securities, other than (i) in the case of the Investor Group, a
group consisting solely of the members of the Investor Group, (ii) in the case
of the Shareholder
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Group, a group consisting solely of the members of the Shareholder Group and
(iii) any group that may be deemed to exist by virtue of the Shareholders
Agreement; or (b) deposit any Company Voting Securities into a voting trust or
subject any Company Voting Securities to any arrangement or agreement with
respect to the voting thereof, other than (i) the Shareholders Agreement, (ii)
in the case of the Investor Group, any such trust, arrangement or agreement the
only parties to, or beneficiaries of, which are members of the Investor Group or
Permitted Transferees (as defined in the Shareholders Agreement) of Investor and
(iii) in the case of the Shareholder Group, any such trust, arrangement or
agreement the only parties to, or beneficiaries of, which are members of the
Shareholder Group or Permitted Transferees of Shareholder.
3.4 No Solicitation of Bidders. Prior to the third anniversary of the
Effective Date, neither the Investor Group nor the Shareholder Group shall,
directly or indirectly, assist, encourage or induce any other person to bid for
or acquire outstanding Company Voting Securities in any transaction or series of
related transactions, unless the consummation of such transaction or series of
related transactions requires approval of a majority of the Board of Directors.
3.5 Non-Circumvention. Except as the same may be approved by a majority of
the Disinterested Directors in a specific resolution to that effect adopted
prior to the taking of such action, prior to the third anniversary of the
Effective Date, neither the Investor Group nor the Shareholder Group shall take
any action, alone or in concert with any other person to circumvent the
limitations set forth in Sections 3.1, 3.2, 3.3 and 3.4 of this Agreement.
3.6 Investor Nominees. If, for any reason, (i) any person designated by
Investor as a director of the Company pursuant to Article IV hereof is not
nominated by the Company's Board of Directors for election to the Company's
Board of Directors or the Company's Board of Directors does not recommend such
person to serve as a director of the Company, or (ii) the Board of Directors of
the Company shall change the size of the Board of Directors of the Company from
seven directors at such time as Investor is entitled to designate two directors
of the Company's Board of Directors in accordance with the provisions of Section
4.3 hereof or Shareholder is entitled to designate three directors of such Board
in accordance with Section 4.4 hereof, then, upon the happening of such event,
all of the provisions of this Article III shall lapse and no longer be of any
force or effect; provided, however, that the obligations of a party under this
Article III shall not lapse and cease to be of any force or effect with respect
to either the Investor Group or the Shareholder Group if any of its respective
members shall have breached any provision of this Agreement and as a result
thereof, one of the events described in clause (i) or (ii) above shall have
occurred.
3.7 Shareholder Nominees. If, for any reason, (i) any person designated by
Shareholder as a director of the Company pursuant to Article IV hereof is not
nominated by the Company's Board of Directors for election to the Company's
Board of Directors or the Company's Board of Directors does not recommend such
person to serve as a director of the Company, or (ii) the Board of Directors of
the Company shall change the size of the Board of Directors of the Company from
seven directors at such time as Investor is entitled to designate two directors
of the Company's Board of Directors in accordance with the provisions of Section
4.3 hereof or
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Shareholder is entitled to designate three directors of such Board in accordance
with Section 4.4 hereof, then, upon the happening of such event, all of the
provisions of this Article III shall lapse and no longer be of any force or
effect; provided, however, that the obligations of a party under this Article
III shall not lapse and cease to be of any force or effect with respect to
either the Investor Group or the Shareholder Group if any of its respective
members shall have breached any provision of this Agreement and as a result
thereof, one of the events described in clause (i) or (ii) above shall have
occurred.
3.8 Acquisitions by Investor. Prior to the later of (i) such time as
Investor no longer has any rights under Section 4.3 or (ii) the third
anniversary of the Effective Date, the Investor Group shall not solicit,
encourage, enter into substantive discussions or negotiations with respect to,
or effect any acquisition of any entity the principal business of which is the
operation of a network of payphones or of any material amount of assets of any
such entity; provided, however, that (i) the Investor Group may solicit,
encourage or enter into discussions or negotiations of which the Company is
generally aware with respect to any such acquisition with the intent of
effecting such acquisition through the Company and (ii) the Investor Group shall
not be prohibited from purchasing and owning equity securities of any such
entity so long as such securities in the aggregate represent no more than five
percent of the outstanding equity securities of such entity. Investor
represents and warrants that from May 14, 1998 through the Effective Date, the
Investor Group has not solicited, encouraged or entered into substantive
discussions or negotiations with respect to any such acquisition except with the
intent of effecting such acquisition through the Company.
ARTICLE IV
VOTING OF COMPANY VOTING SECURITIES AND RELATED MATTERS
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4.1 Shareholder Meetings. So long as Shareholder is entitled to designate
three directors of the Company's Board of Directors in accordance with Section
4.4 hereof, each member of the Investor Group that is a holder of record of
Company Voting Securities shall be present, and each member of the Investor
Group that is a beneficial owner of Company Voting Securities shall cause the
holder of record of such Company Voting Securities to be present, in person or
by proxy, at all meetings of shareholders of the Company so that all Company
Voting Securities owned of record or beneficially by the Investor Group may be
counted for the purpose of determining the presence of a quorum at such
meetings. So long as Investor is entitled to designate two directors of the
Company's Board of Directors in accordance with Section 4.3 hereof, each member
of the Shareholder Group that is a holder of record of Company Voting Securities
shall be present, and each member of the Shareholder Group that is a beneficial
owner of Company Voting Securities shall cause the holder of record of such
Company Voting Securities to be present, in person or by proxy, at all meetings
of shareholders of the Company so that all Company Voting Securities owned of
record or beneficially by the Shareholder Group may be counted for the purpose
of determining the presence of a quorum at such meetings.
4.2 Election of Board of Directors. (a) So long as Investor is entitled
to designate two directors of the Company's Board of Directors in accordance
with the provisions of Section 4.3
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hereof, except to the extent otherwise provided herein, the Company shall take
all reasonably necessary or appropriate action to assist in the nomination and
election as directors of the two individuals designated by Investor to be
elected as directors of the Company.
(b) So long as Shareholder is entitled to designate three directors
of the Company's Board of Directors in accordance with the provisions of Section
4.4 hereof, except to the extent otherwise provided herein, the Company shall
take all reasonably necessary or appropriate action to assist in the nomination
and election as directors of the three individuals specified in Section 4.4
below designated by Shareholder to be elected as directors of the Company.
(c) So long as Investor is entitled to designate two directors of the
Company's Board of Directors in accordance with the provisions of Section 4.3
hereof or Shareholder is entitled to designate three directors of such Board
pursuant to Section 4.4 hereof, none of Investor, Shareholder or the Company
shall take any action to decrease the size of such Board to less than seven
directors or to increase the size of such Board to more than seven directors.
(d) So long as Shareholder, individually, or Shareholder and
Investor, acting jointly, are entitled to designate two Independent Directors in
accordance with the provisions of Section 4.5 hereof, except to the extent
otherwise provided herein, the Company shall take all necessary or appropriate
action to assist in the nomination and election as directors of the two persons
designated by Shareholder or Shareholder and Investor, as the case may be, to be
elected as Independent Directors.
(e) So long as Investor is entitled to designate two directors of the
Company's Board of Directors in accordance with the provisions of Section 4.3
hereof (each such director, an "Investor Designee") and Shareholder is entitled
to designate three directors of the Company's Board of Directors in accordance
with Section 4.4 hereof (each such director, a "Shareholder Designee"), each
committee of the Board of Directors shall consist of at least three directors,
and (other than any committee consisting entirely of Independent Directors and
other than the Executive Committee) shall include no more than one Investor
Designee and no more than one Shareholder Designee. The Executive Committee
shall include no more than one Investor Designee, but may include more than one
Shareholder Designee.
4.3 Investor Board Nominees. So long as the Investor Group beneficially
owns at least 10% of the Combined Voting Power of all Company Voting Securities,
Investor shall have the right to designate two directors of the Company;
provided, however, that at such time as the Investor Group shall no longer
beneficially own at least 10% of the Combined Voting Power of all Company Voting
Securities, (i) Investor shall cease to have the right to designate any
directors of the Company, (ii) Investor's rights under this Article IV shall
terminate and (iii) Investor shall cause its two designees to resign from the
Board of Directors of the Company.
4.4 Shareholder Board Nominees. So long as the Shareholder Group
beneficially owns at least 10% of the Combined Voting Power of all Company
Voting Securities, Shareholder shall have the right to designate three directors
of the Company; provided, however, that at such time as the Shareholder Group
shall no longer beneficially own at least 10% of the Combined Voting Power of
all Company Voting Securities, (i) Shareholder shall cease to have the right to
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designate any directors of the Company, (ii) Shareholder's rights under this
Article IV shall terminate and (iii) Shareholder shall cause its three designees
to resign from the Board of Directors of the Company.
4.5 Independent Directors. Prior to the first anniversary of the Effective
Date, Shareholder shall be entitled to designate two persons to be elected as
Independent Directors, provided that such designees are reasonably acceptable to
Investor (it being understood that at least one non-employee director of the
Company holding such position as of May 14, 1998 shall be acceptable to
Investor). Following the first anniversary of the Effective Date, Investor and
Shareholder shall jointly designate the two persons to be elected as Independent
Directors. Investor and Shareholder shall cause their designees on the Board of
Directors of the Company to take all reasonably necessary or appropriate action
to assist in the nomination and election as directors of all such nominees as
may be selected to serve as Independent Directors in the manner described above.
ARTICLE V
REGISTRATION RIGHTS
-------------------
5.1 Definitions. For purposes of this Article V:
(a) The term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Act").
(b) The term "Registrable Securities" means shares of Common Stock held,
from time to time, by any member of the Investor Group.
(c) The term "Holder" means any member of the Investor Group or (other than
for purposes of Section 5.2) the Shareholder Group that owns of record
Registrable Securities.
(d) The term "Rule 415 Offering" means an offering on a delayed or
continuous basis pursuant to Rule 415 (or any successor rule to similar effect)
promulgated under the Act.
(e) The term "Shelf Registration Statement" means a registration statement
intended to effect a shelf registration in connection with a Rule 415 Offering.
5.2 Shelf Registrations. No later than ninety (90) days after the Company
becomes eligible to use Form S-3 under the Act to register Shares for resale by
shareholders, the Company shall, upon the written request of Investor, prepare
and file with the SEC a Shelf Registration Statement (which shall include
pledgees of any selling shareholder under the caption "plan of distribution"
contained in such Shelf Registration Statement) with respect to all Shares
acquired by Investor pursuant to the Purchase Agreements and use its reasonable
efforts to cause such Shelf Registration Statement to become effective and keep
such registration statement effective until such time as such Shares have been
sold or disposed of thereunder or sold, transferred or otherwise disposed of
(other than pursuant to a pledge of such Registrable
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Securities) to a person that is not a Holder. Notwithstanding the foregoing, if
the Company shall furnish to Investor a certificate signed by the Chief
Executive, Chief Operating, or Chief Financial Officer of the Company stating
that, in the good faith judgment of a majority of the Disinterested Directors,
it would be materially detrimental to the Company for such registration
statement to be filed, the Company shall have the right to defer such filing for
a period of not more than 120 days after receipt of Investor's request;
provided, however, that the Company may not utilize this right more than once in
any 12-month period.
5.3 Incidental Registration. If the Company proposes to register any of
its voting securities ("Other Securities") for public sale under the Securities
Act, on a form and in a manner which would permit registration of Registrable
Securities for sale to the public under the Securities Act, it will give prompt
written notice to each Holder of its intention to do so, and upon the written
request of a Holder delivered to the Company within fifteen Business Days after
the giving of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such Holder and the intended method of
disposition thereof) the Company will use its best efforts to effect, in
connection with the registration of the Other Securities, the registration under
the Securities Act of all Registrable Securities which the Company has been so
requested to register by such Holder, to the extent required to permit the
disposition (in accordance with the intended method or methods thereof as
aforesaid) of the Registrable Securities so to be registered, provided that:
(a) if, at any time after giving such written notice of its intention
to register any Other Securities and prior to the effective date of the
registration statement filed in connection with such registration, the
managing underwriters of such offering or offerings determine that the
aggregate amount of shares to be registered by the Holders of the
Registrable Securities could materially and adversely affect such offering,
then the Company may reduce the number of Registrable Securities of such
Holders to be included in such offering; provided, that such Holders will
be entitled to register the maximum number of Registrable Securities,
together with those shares of Common Stock held by any other person
exercising registration rights, which the underwriters deem advisable and
the Company will allocate the number of Registrable Shares to be registered
for each such Holder on a pro rata basis in accordance with the number of
shares each Holder initially requested to be sold;
(b) the Company shall not be required to effect any registration of
Registrable Securities under this Section 5.3 incidental to the
registration of any of its securities in connection with mergers,
acquisitions, exchange offers, dividend reinvestment plans or stock option
or other employee benefit plans; and
(c) Holder, cumulatively, shall have the right to exercise
registration rights pursuant to this Section 5.3 without limit during the
term hereof.
No registration of Registrable Securities effected under this Section 5.3 shall
relieve the Company of its obligation to effect registrations of Registrable
Securities pursuant to Section 5.2.
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5.4 Additional Obligations of the Company. Whenever the Company is
required to effect a registration statement pursuant to Section 5.2 or 5.3, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered thereby.
(b) 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 covered by such
registration statement owned by them.
(c) Use its reasonable best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such states or other 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 where it is not so subject.
(d) 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 of the happening of any event as a result
of which the prospectus included in such 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, and then
use its best efforts to promptly correct such statement or omission.
Notwithstanding the foregoing and anything to the contrary set forth in this
Section 5.4, each Holder acknowledges that the Company shall have the right to
suspend the use of the prospectus forming a part of a registration statement if
such offering would interfere with a pending corporate transaction or for other
reasons until such time as an amendment to the registration statement has been
filed by the Company and declared effective by the SEC, or until such time as
the Company has filed an appropriate report with the SEC pursuant to the
Exchange Act. Each Holder hereby covenants that it will (a) keep any such notice
strictly confidential, and (b) not sell any shares of Common Stock pursuant to
such prospectus during the period commencing at the time at which the Company
gives the Holder notice of the suspension of the use of such prospectus and
ending at the time the Company gives the Holder notice that it may thereafter
effect sales pursuant to such prospectus. The Company shall only be able to
suspend the use of such prospectus for periods aggregating no more than 90 days
in respect of any registration.
5.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Article V with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities and as may be required from time to time to keep such registration
current.
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5.6 Expenses of Registration. All expenses incurred by or on behalf of
the Company in connection with registrations, filings or qualifications pursuant
to Section 5.3 including, without limitation, all registration, filing and
qualification fees, printers' and accounting fees, and fees and disbursements of
counsel for the Company, shall be borne by the Company. In no event shall the
Company be obligated to bear any underwriting discounts or commissions or
brokerage fees or commissions relating to Registrable Securities or the fees and
expenses of counsel to the selling Holders.
5.7 Indemnification. In the event registration of any Registrable
Securities hereunder:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder and the affiliates of such Holder, and their respective
directors, officers, general and limited partners, agents and representatives
(and the directors, officers, affiliates and controlling persons thereof), and
each other person, if any, who controls such Holder within the meaning of the
Act, against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Act, the Exchange 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 upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus (but only if
such statement is not corrected in the final prospectus) contained therein or
any amendments or supplements thereto, (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 (but only if such omission is not
corrected in the final prospectus), or (iii) any violation or alleged violation
by the Company in connection with the registration of Registrable Securities
under the Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Act, the Exchange Act or any state securities
law; and the Company will pay to each such Holder, affiliate 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 Section 5.7(a) 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
a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
or on behalf of any such Holder or its Affiliates or controlling person. Each
indemnified party shall furnish such information regarding itself or the claim
in question as an indemnifying party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
(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
12
<PAGE>
several) to which any of the foregoing persons may become subject, under the
Act, the Exchange 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 any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
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 Section 5.7(b) in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 5.7(b) 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 such Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this Section 5.7(b) exceed the gross proceeds from the offering received
by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 5.7
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 5.7, 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. The
failure to deliver written notice to the indemnifying party within a reasonable
time after the commencement of any such action, if materially prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 5.7 to the extent of such
prejudice, 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 5.7. The indemnified party shall have
the right, but not the obligation, to participate in the defense of any action
referred to above through counsel of its own choosing and shall have the right,
but not the obligation, to assert any and all separate defenses, cross claims or
counterclaims which it may have, and the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of such
counsel has been specifically authorized in advance by the indemnifying party,
(ii) there is a conflict of interest that prevents counsel for the indemnifying
party from adequately representing the interests of the indemnified party or
there are defenses available to the indemnified party that are different from,
or additional to, the defenses that are available to the indemnifying party,
(iii) the indemnifying party does not employ counsel that is reasonably
satisfactory to the indemnified party within a reasonable period of time, or
(iv) the indemnifying party fails to assume the defense or does not reasonably
contest such action in good faith, in which case, if the indemnified party
notifies the indemnifying party that it elects to employ separate counsel, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party and the reasonable fees and expenses of such
separate counsel shall be borne by the indemnifying party; provided, however,
that, the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm (in addition to, to the extent
reasonably necessary to employ local counsel, one firm acting as local counsel)
for all indemnified parties.
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(d) The obligations of the Company and the Holders under this Section 5.7
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Article V.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement (if
any) entered into in connection with any underwritten public offering of the
Registrable Securities are in conflict with the foregoing provisions, the
provisions in such underwriting agreement shall control.
5.8 Reports Under the Exchange Act. With a view to making available to the
holders the benefits of Rule 144 and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of the Company to the
public without registration or pursuant to a registration on Form S-3, the
Company agrees to:
(a) use its reasonable best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144;
(b) use its reasonable best efforts to file with the SEC in a timely manner
all reports and other documents required under the Act and the Exchange Act; and
(c) furnish to any Holder forthwith upon request (i) a written statement by
the Company as to its compliance with the reporting requirements of Rule 144, or
as to whether it qualifies as a registrant whose securities may be resold
pursuant to Form S-3, (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 (and the Company shall take such action) 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.
5.9 Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Article V may only be assigned
by a Holder to a transferee or assignee of any Registrable Securities if such
transferee or assignee is a member of the Investor Group or the Shareholder
Group, as the case may be.
5.10 Waiver Procedures. The observance by the Company of any provision
of this Article V may be waived (either generally or in a particular instance
and either retroactively or prospectively) with the written consent of the
Holders of a majority of the Registrable Securities, and any waiver effected in
accordance with this paragraph shall be binding upon each Holder of Registrable
Securities.
5.11 "Market Stand-off" Agreement. Any Holder of Registrable Securities,
if requested by an underwriter of any registered public offering of Company
securities being sold in a firm commitment underwriting, agrees not to sell or
otherwise transfer or dispose of any Common Stock (or other Company Voting
Securities) held by such Holder other than shares of Registrable Securities
included in the registration during the seven days prior to, and during a period
of up to 180 days following, the effective date of the registration statement.
Such agreement shall be in writing in a form reasonably satisfactory to the
Company and such underwriter. The Company
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<PAGE>
may impose stop-transfer instructions with respect to the securities subject to
the foregoing restriction until the end of the required stand-off period.
ARTICLE VI
MISCELLANEOUS
-------------
6.1 Term of Agreement; Certain Provisions Regarding Termination. Unless
this Agreement specifically provides for earlier or later termination with
respect to any particular right or obligation, this Agreement shall terminate
(a) in the case of the Investor Group, if the Investor Group beneficially owns
Company Voting Securities in the aggregate representing less than 5% of the
Combined Voting Power of all Company Voting Securities, and (b) in the case of
the Shareholder Group, if the Shareholder Group beneficially owns Company Voting
Securities in the aggregate representing less than 5% of the Combined Voting
Power of all Company Voting Securities.
6.2 Legend and Stop Transfer Order. To assist in effectuating the
provisions of this Agreement, each of Investor and Shareholder hereby consents
to the placement, in connection with the transactions contemplated by the
Purchase Agreement or otherwise within 10 business days after any Company Voting
Securities become subject to the provisions of this Agreement, of the legend set
forth below on all certificates representing ownership of Company Voting
Securities owned of record or beneficially by any member of the Investor Group
or the Shareholder Group, until such shares are sold, transferred or disposed in
a manner permitted hereby to a person who is not then a member of either such
group:
"The shares represented by this certificate have not been registered under
the Federal Securities Act of 1933, as amended (the "Act") or any state
securities laws of any jurisdiction. No sale, offer to sell, assignment,
pledge, hypothecation, gift, transfer or other disposition of the shares
represented by this certificate may be made unless a registration statement
under the Act with respect to such shares is then in effect or an exemption
from the registration requirements of the Act is available with respect to
said transfer and the requirements of applicable state laws are satisfied.
The sale, assignment, pledge, hypothecation, gift, transfer or other
disposition of the shares represented by this certificate is subject to
certain restrictions pursuant to an Investment Agreement dated June 29,
1998 and a Shareholders Agreement dated June 29, 1998, in each case, by and
among the Company and certain of its shareholders, copies of which may be
obtained from the Company upon request."
The Company agrees to remove promptly all legends and stop transfer orders with
respect to the transfer of Company Voting Securities being made to a person who
is not then a member of the Investor Group or the Shareholder Group in
compliance with the provisions of this Agreement.
6.3 Remedies.
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(a) Each party recognizes and acknowledges that a breach by it of Article
III, Article IV or Article V of this Agreement would cause the other parties to
sustain damages for which they would not have an adequate remedy at law for
money damages, and therefore each party agrees that in the event of any such
breach any of the other parties shall be entitled to seek the remedy of specific
performance of such Article III, Article IV or Article V and injunctive relief
and other equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
(b) In addition to any other remedy the Company may have under this
Agreement or in law or equity, if any member of the Investor Group or the
Shareholder Group, as the case may be, shall acquire or transfer any Company
Voting Securities in violation of this Agreement, such Company Voting Securities
which are in excess of the number permitted to be owned or controlled by the
Investor Group or Shareholder Group, as the case may be, or which have been
transferred by a member of the Investor Group or the Shareholder Group in
violation of the provisions of this Agreement, will not be voted with respect to
any matter by such member either in person or by proxy.
6.4 Additional Investor Group Parties; Several Obligations. Each member of
the Investor Group or the Shareholder Group that shall become or have the right
to become the record owner of Company Voting Securities shall, promptly upon
becoming such record owner, execute and deliver to the Company a joinder
agreement, agreeing to be legally bound by the terms of this Agreement to the
same extent as if it had signed this Agreement as an original signatory as
Investor or Shareholder, as the case may be; provided that failure to execute
such an agreement shall not excuse such member's non-compliance with any
provision of this Agreement. No member of the Investor Group or the Shareholder
Group shall transfer securities to another member of its group unless the
transferee shall agree to be bound by this Agreement in the manner specified
above in this Section 7.4.
6.5 Notices. All notices, and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, telecopy, to
the appropriate address or telecopy number set forth below (or at such other
address or telecopy number for a party as shall be specified by like notice):
if to Investor:
Samstock, L.L.C.
Two N. Riverside Plaza
Chicago, IL 60606
Attention: F. Philip Handy
Telecopy Number: (312) 454-1671
with a copy to:
Rosenberg & Liebentritt, P.C.
Two N. Riverside Plaza
Chicago, IL 60606
Attention: Walter S. Lowry
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Telecopy Number: (312) 454-0335
if to the Company:
Davel Communications Group, Inc.
1429 Massaro Boulevard
Tampa, Florida 33619
Attention: Robert D. Hill
Telecopy Number: (813) 626-9610
with a copy to:
Kirkland & Ellis
200 E. Randolph Drive
Chicago, IL 60601
Attention: R. Scott Falk
Telecopy Number: (312) 861-2200
17
<PAGE>
with an additional copy to:
Davel Communications Group, Inc.
1429 Massaro Boulevard
Tampa, Florida 33619
Attention: Theodore C. Rammelkamp, Jr.
Telecopy Number: (813) 626-9610
If to Shareholder:
David R. Hill
601 West Morgan
Jacksonville, IL 62650
Telecopy Number: (217) 243-6016
6.6 Severability. Any provision hereof which is invalid or unenforceable
shall be ineffective to the extent of such invalidity or unenforceability,
without affecting in any way the remaining provisions hereof.
6.7 Amendments; Waivers. (a) This Agreement may not be modified or amended
except by an instrument or instruments in writing signed by each party hereto.
(b) The failure of any party hereto to comply with any representation,
warranty, covenant or agreement contained in this Agreement may be waived only
by a written instrument signed by the party granting such waiver. No action
taken pursuant to this Agreement, including any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representation, warranty, covenant or agreement
contained in this Agreement, and no failure by any party to take any action with
respect to any breach of this Agreement or default by any other party shall
constitute a waiver of such party's right to enforce any provision hereof or to
take any such action. The waiver by any party hereto of a breach of any
provision hereunder shall not operate as a waiver of any prior or subsequent
breach of the same or any other provision hereunder.
6.8 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Illinois regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
6.9 Interpretation. The headings contained in this Agreement are inserted
for convenience of reference only and shall not affect in anyway the meaning or
interpretation of this Agreement. All references to a Section, Article,
Schedule or Exhibit contained herein mean Sections, Articles, Schedules or
Exhibits of this Agreement unless otherwise stated. All capitalized terms
defined herein are equally applicable to both the singular and plural forms of
such terms.
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Whenever the words "include", includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation".
6.10 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same Agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
6.11 Assignability. Neither this Agreement nor any of the rights,
interest or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, except that Investor may assign any of or
all of its rights and obligations under this Agreement to any person that is an
Affiliate of Samuel Zell or an Affiliate of any one or more trusts established
for the benefit of Samuel Zell and/or members of his family without the consent
of any other party and Shareholder may assign any or all of his rights and
obligations under this Agreement to one or more Affiliates of Shareholder
(including any Shareholder Family Entity) without the consent of any other
party; provided that, in each case, such person or persons shall have executed
and delivered a joinder to this Agreement and agreed to be bound by the terms
and conditions hereof. Subject to the preceding sentence, this Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.
6.12 Consent to Jurisdiction. Each party hereto irrevocably submits to
the nonexclusive jurisdiction of (a) the state courts of the State of Illinois
and (b) any federal district court located in the State of Illinois for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby.
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IN WITNESS WHEREOF, each of Investor, Shareholder and the Company have
executed this Investment Agreement as of the date first above written.
INVESTOR:
SAMSTOCK, L.L.C.
_______________________________
By:
SHAREHOLDER:
_______________________________
David R. Hill, individually
COMPANY:
DAVEL COMMUNICATIONS GROUP, INC.
_______________________________
By:
<PAGE>
EXHIBIT 10.12
SHAREHOLDERS AGREEMENT
----------------------
This SHAREHOLDERS AGREEMENT ("Agreement") is dated as of June 29, 1998, by
and among Samstock, L.L.C., a Delaware limited liability company ("Investor"),
David R. Hill, an individual residing in the State of Illinois ("Shareholder"),
and, solely for purposes of Sections 2(a), 2(b), 3, 4, 6 and 8 through 19 of
this Agreement, Davel Communications Group, Inc., an Illinois corporation (the
"Company").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Investor and the Company are parties to a Stock Purchase Agreement
dated May 14, 1998 (the "Company Stock Purchase Agreement") pursuant to which,
among other things, the Company has agreed to issue and sell, and Investor has
agreed to purchase from the Company, 1,000,000 shares of common stock, no par
value, of the Company ("Common Stock");
WHEREAS, Investor and Shareholder are parties to a Stock Purchase Agreement
dated May 14, 1998 (the "Shareholder Stock Purchase Agreement") pursuant to
which, among other things, Shareholder has agreed to sell, and Investor has
agreed to purchase from Shareholder, 500,000 shares of Common Stock;
WHEREAS, Investor and certain directors and members of management of the
Company (the "Management Shareholders") are parties to a Stock Purchase
Agreement pursuant to which, among other things, the Management Shareholders
have agreed to sell, and Investor has agreed to purchase from the Management
Shareholders, 123,900 shares of Common Stock (such Stock Purchase Agreement,
together with the Company Stock Purchase Agreement and the Shareholder Stock
Purchase Agreement, the "Stock Purchase Agreements");
WHEREAS, the closing of the transactions contemplated by each of the Stock
Purchase Agreements is occurring concurrently with the execution and delivery of
this Agreement;
WHEREAS, it is a condition to the obligations of Investor to effect the
transactions contemplated by the Company Stock Purchase Agreement that this
Agreement be executed and delivered by Investor and Shareholder;
WHEREAS, giving effect to the closing of the transactions contemplated by
each of the Stock Purchase Agreements, each of Investor and Shareholder
beneficially owns the number of shares of Common Stock, and options to purchase
shares of Common Stock, set forth opposite its name on Exhibit A hereto; and
<PAGE>
WHEREAS, capitalized terms used and not otherwise defined herein shall have
the meanings assigned thereto in the Investment Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows: Section 1. Certain Definitions. 8.Certain Definitions Section
8.Certain Definitions.
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with such first Person. As used in this
definition "control" (including, with correlative meanings, "controlled by" and
"under common control with") shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management or policies, whether
through the ownership of securities or partnership or other ownership interests,
by contract or otherwise.
"business day" means any day that is not a Saturday, a Sunday or a legal
holiday on which banking institutions in the State of Illinois are not required
to be open.
"Investment Agreement" means the Investment Agreement dated as of the date
hereof among the Company, Investor and Shareholder.
"Market Price" means the average of the closing prices of the Common Stock
on the Nasdaq Stock Market (or, if not trading on the Nasdaq Stock Market, such
other securities exchange or over the counter market on which the Common Stock
is then trading) on the 20 consecutive Trading Days immediately preceding the
date of determination.
"Permitted Transferee" means:
--------------------
(i) with respect to the Transfer of Shares by Investor, any person
that is an Affiliate of Samuel Zell or an Affiliate of any one or more
trusts established for the benefit of Samuel Zell and/or members of his
family; and
(ii) with respect to any Transfer of Shares by Shareholder, (A) any
Shareholder Family Entity, (B) any charitable organization as defined under
Section 501(c)(3) of the Internal revenue Code of 1986, as amended, and (C)
any other charitable organization(s), provided Shareholder does not
Transfer to any such other charitable organization(s) in the aggregate over
the term of this Agreement more than ten percent (10%) of the Shares in any
single Transfer or series (related or unrelated) of Transfers.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, governmental entity or other entity.
"Public Sale" means a bona fide sale of Shares either (i) in "broker's
transactions" within the meaning of Section 4(4) of the Securities Act of 1933,
as amended (the "Securities Act"), (ii) in transactions directly with a "market
maker" as that term in defined in Section 3(a)(38) of the Securities Exchange
Act of 1934, as amended,
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(iii) otherwise pursuant to Rule 144 of the Securities Act, or (iv) through a
registered offering pursuant to an effective registration statement under the
Securities Act.
"Shares" means all shares of Company Voting Securities, whether now owned
or hereafter acquired.
"Shareholder Family Entity" means Shareholder's spouse and descendants and
any corporation, partnership, limited liability company, trust, or other legal
entity controlled by Shareholder and wholly owned beneficially and of record by
Shareholder and/or Shareholder's spouse, children, grandchildren, parents,
siblings, in-laws, nieces and/or nephews or a trust established for any of their
benefit, provided such trust is controlled by Shareholder or Shareholder's
representative, or principal heir or legatee.
"Trading Day" means any day on which the Nasdaq Stock Market is open for
trading.
"Transfer" means any voluntary or involuntary, direct or indirect,
transfer, sale, assignment, donation, pledge, hypothecation, issuance, grant of
a security interest in or other disposition or attempted disposition of Shares
or any right or interest whatsoever therein, including, without limitation, by
operation of law or otherwise, whether with or without consideration or value,
and whether for cash, other securities or other property and specifically
including any share for share or similar exchange; provided, however, that:
(i) any pledge or hypothecation of or grant of security interest in
Shares by Shareholder which is either approved by Investor in writing prior
to the pledge, hypothecation or grant of security interest or is effected
by Investor or any Affiliate of Investor shall not constitute a "Transfer"
of Shares for any purpose under this Agreement; and
(ii) any Transfer effected as a result of Shareholder's death,
pursuant to the laws of descent and distribution, by operation of law or
otherwise, to Shareholder's spouse, children, grandchildren, parents,
siblings, in-laws, nieces and/or nephews or a trust established for any of
their benefit, shall not constitute a "Transfer" of Shares for any purpose
under this Agreement, provided each transferee of Shares executes a
counterpart to this Agreement, whereupon such transferee shall hold such
Shares subject to all of the provisions of this Agreement, as if the
transferor were the holder of Shares held by the transferee.
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Section 2. Restrictions on Transfer and Related Matters / Permitted
Transferees
(a) Neither Investor nor Shareholder shall Transfer any Shares except
for a Transfer to a Permitted Transferee pursuant to Section 2(b) or, subject to
Section 6, a Transfer pursuant to Section 3, 4, or 5, as applicable, or pursuant
to the exercise of registration rights under Section 5.3 of the Investment
Agreement. If any Transfer is made or attempted contrary to the provisions of
this Agreement, such purported Transfer shall be void ab initio; and the Company
shall refuse to recognize any such purported transferee of Shares as a holder of
such Shares for any purpose. Notwithstanding anything to the contrary in this
Agreement, the rights of Investor and Shareholder to acquire any Shares pursuant
to their respective rights in Section 3 and 4 shall be subject to compliance
with their respective obligations under Article III of the Investment Agreement.
(b) Notwithstanding anything to the contrary in Section 2(a) hereof,
for purposes of this Agreement, Shareholder and Investor may Transfer Shares to
a Permitted Transferee of Shareholder and Investor, respectively, without
complying with the provisions of Sections 3, 4, 5 or 6. As a condition to the
effectiveness of any Transfer of Shares to a Permitted Transferee, the Permitted
Transferee shall execute a counterpart to this Agreement, whereupon the
Permitted Transferee shall hold Shares subject to all of the provisions of this
Agreement, as if the Permitted Transferee was the Person who transferred the
Shares actually held by the Permitted Transferee.
Section 3. Right of First Offer on Private Transfer. In the event either
Shareholder or Investor (in either case, the "Offeror") wishes to sell for cash
in a bona fide transaction with an independent third party, whether or not any
third party has made an offer to purchase any of the Offeror's Shares, all or
any portion of the Shares now owned or hereafter acquired by the Offeror, other
than in a Public Sale, the Offeror shall first notify Investor or Shareholder,
as the case may be (in either case, the "Offeree") and the Company in writing
(the "Notice of Intended Sale") of the number of Shares for sale by the Offeror
(the "Offered Shares") and the terms of sale other than the purchase price. The
Offeree shall promptly engage in discussions with the Offeror, for a period not
to exceed ten (10) business days from the date of receipt by the Offeree and the
Company of the Notice of Intended Sale, to mutually agree on a purchase price
for the Offered Shares. No later than the end of such ten (10) business day
period, the Offeree shall notify the Offeror in writing of the price the Offeree
proposes to pay for all, but not less than all, of the Offered Shares (the
"Offeree Proposed Price"). Within two (2) business days of the receipt of notice
of the Offeree Proposed Price, the Offeror shall notify the Offeree in writing
whether it or he will sell the Offered Shares to the Offeree at the Offeree
Proposed Price in cash and on the other proposed terms of sale. If, within three
(3) business days of receipt by the Offeree and the Company of the Notice of
Intended Sale, the Offeree notifies the Offeror and the Company that it or he
does not wish to purchase the Offered Shares, then the Company shall promptly
(i) notify the Offeror that it does not wish to purchase the Offered Shares, or
(ii) engage in discussions with the Offeror, for a period not to exceed ten (10)
business days from the date of receipt of such notice from the Offeree, to
mutually agree on a purchase price for the Offered Shares. No later than the end
of such ten (10) business day period, the Company shall notify the Offeror in
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<PAGE>
writing of the price the Company proposes to pay for all, but not less than all,
of the Offered Shares (the "Company Proposed Price"). Within two (2) business
days of the receipt of notice of the Company Proposed Price, the Offeror shall
have the right to notify the Company in writing whether it or he will sell the
Offered Shares to the Company at the Company Proposed Price in cash and on the
other proposed terms of sale. If the Company notifies the Offeror that it does
not wish to purchase the Offered Shares or if the Company does wish to purchase
the Offered Shares, and the Offeror does not wish to sell all (and not less than
all) of the Offered Shares to the Company at the Company Offered Price, the
Offeror shall be free for a period of ninety (90) days thereafter to complete a
sale of all (but not less than all) of the Offered Shares to any Person at a
price that exceeds either the Offeree Proposed Price or the Company Proposed
Price, as the case may be, if any, in cash and on substantially the same terms
as set forth in the Offeror's Notice of Intended Sale. If such a sale is not
consummated within such ninety (90) day period by the Offeror, the Offered
Shares shall again be subject to a right of first offer by the Offeree and the
Company under the provisions of this Section 3. Except as provided herein,
Investor and Shareholder shall be bound by the restrictions and limitations
imposed by this Agreement after any Notice of Intended Sale is given and whether
or not any sale pursuant thereto actually occurs. In the event any Offeree
exercises its or his rights to purchase shares of Common Stock pursuant to any
Notice of Intended Sale, the Offeree and the Offeror shall, as promptly as
practicable and as a condition to their respective obligations hereunder, enter
into such agreements and deliver such documents to one another as shall be
necessary for the sale of Shares as contemplated hereby.
Section 4. Right of First Offer on Public Sale. In the event that either
Investor or Shareholder (in either case, the "Offeror") wishes to sell for cash
in a Public Sale all or any portion of the Shares now owned or hereafter
acquired by the Offeror, whether or not any third party has made an offer to
purchase any of the Offeror's Shares, the Offeror shall first notify Investor or
Shareholder, as the case may be (the "Offeree"), and the Company in writing (the
"Notice of Intended Sale") of the number of Shares for sale by the Offeror (the
"Offered Shares"). The Offeree thereupon shall have the right to purchase all or
any part of the Offered Shares for cash at their Market Price determined as of
the last Trading Day immediately prior to the date of the Offeree's receipt of
the Notice of Intended Sale. In order to exercise the purchase rights, within
three (3) business days (one (1) business day in the event of a proposed Public
Sale of no more than 10,000 Shares in the aggregate) after receiving the Notice
of Intended Sale from the Offeror, the Offeree shall deliver to the Offeror and
the Company a written election ("Election Notice") to purchase so many of the
Offered Shares as it or he may desire to purchase. If the Offeree does not
exercise the purchase rights with respect to all of the Offered Shares within
the time period as provided herein or fails to deliver the Election Notice
within the time period provided, the Company shall have the right to purchase
all (but not less than all) of the Offered Shares at the proposed price in cash
and on the other proposed terms of sale. In order to exercise its purchase
rights, within three (3) business days (one (1) business day in the event of a
proposed sale of no more than 10,000 Shares
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<PAGE>
in the aggregate) after the expiration of the time period applicable to the
Offeree, the Company shall deliver to the Offeror a written election (the
"Election Notice") to purchase all of the Offered Shares. If the Company does
not exercise its purchase rights with respect to all (and not less than all) of
the Offered Shares within the time period as provided herein with respect to all
of the Offered Shares, or fails to deliver the Election Notice within the time
period provided, the Offeror shall be free for a period of twenty (20) Trading
Days thereafter to complete a Public Sale of that number of Offered Shares with
respect to which the Offeree and the Company failed to exercise their purchase
rights. If such Public Sale is not consummated within such twenty (20) Trading
Day period by the Offeror, the Offered Shares shall again be subject to a right
of first offer by the Offeree and the Company under the provisions of this
Section 4. Except as provided herein, Investor and Shareholder shall be bound by
the restrictions and limitations imposed by this Agreement after any Notice of
Intended Sale is given and whether or not any sale pursuant thereto actually
occurs. In the event any Offeree exercises its or his rights to purchase shares
of Common Stock pursuant to any Notice of Intended Sale, the Offeree and the
Offeror shall, as promptly as practicable and as a condition to their respective
obligations hereunder, enter into such agreements and deliver such documents to
one another as shall be necessary for the sale of Shares as contemplated hereby.
Notwithstanding anything to the contrary in this Section 4, in the event that
after the Offeree's receipt of the Notice of Intended Sale and prior to the
earlier of (i) the Offeror's receipt of the Election Notice or (ii) 5:00 p.m.
Eastern Time on the fourth (4th) day following the Offeree's receipt of the
Notice of Intended Sale, the Market Price of the Shares increases or decreases
by ten percent (10%) or more as compared to the Market Price on the last Trading
Day immediately prior to the date of the Offeree's receipt of the Notice of
Intended Sale, the Offeror shall have the right to withdraw its Notice of
Intended Sale by written notice to the Offeree and the Company, in which event
the Notice of Intended Sale actually delivered by the Offeror to the Offeree and
the Company shall be deemed for all purposes under this Section 4 as never
having been delivered to the Offeree and the Company.
Section 5. Co-Sale Rights. In addition to the rights of Investor,
Shareholder and the Company set forth in Section 3 above, in the event that
either Investor or Shareholder (in either case, the "Selling Holder") enters
into an agreement to sell to any person other than a Permitted Transferee (and
other than with the Company pursuant to Section 3 or Section 4) or group of any
such persons, in a single transaction or related series of transactions, other
than a Public Sale, such number of Shares as equals or exceeds more than ten
percent (10%) of the Shares held by the Selling Holder as of the date hereof
(giving effect to the closing of the transactions contemplated by the Stock
Purchase Agreements), the Selling Holder shall first notify Investor or
Shareholder, as the case may be (the "Tag-Along Holder"), in writing, of the
identity of the proposed purchaser(s), the number of Shares proposed to be sold,
the proposed purchase price and terms of sale and an estimate of the Transaction
Costs (as defined below) (which estimate shall be a reasonably determined
estimate but otherwise shall not be binding on the Selling Holder and shall have
no effect on Investor's or Shareholder's rights or obligations under this
Section 5). The Tag-Along Holder thereupon shall have the right to participate
in the proposed sale at the same net price per share and other terms and
conditions of sale as offered to the Selling Holder. In order to exercise the
co-sale rights,
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<PAGE>
the Tag-Along Holder, within ten (10) business days after receiving notice from
the Selling Holder, shall deliver to the Selling Holder a written election to
participate in the sale to the extent allowed by this Section 5. If the Tag-
Along Holder has elected to participate in the proposed sale, the Tag-Along
Holder shall be entitled to sell in the proposed sale a number of Shares equal
to the product of (i) the quotient (the "Co-Sale Fraction") determined by
dividing the number of Shares owned by the Tag-Along Holder by the aggregate
number of Shares owned by the Selling Holder and the Tag-Along Holder multiplied
by (ii) the total number of Shares to be sold by them in the proposed sale.
Notwithstanding anything to the contrary in this Section 5, the sale proceeds to
which the Tag-Along Holder would otherwise be entitled by reason of its or his
participation in a sale pursuant to this Section 5 shall be reduced by an amount
equal to the product of the Tag-Along Holder's Co-Sale Fraction multiplied by
the sum of any costs, fees and expenses, including, without limitation,
attorneys', accountants' and investment bankers' fees and expenses
(collectively, "Transaction Costs"), reasonably incurred by the Selling Holder
in connection with the sale or the exercise of the Tag-Along Holder's rights
under this Section 5. The Tag-Along Holder shall, as promptly as practicable and
as a condition to its or his participation, enter into such agreements as shall
be reasonably requested by the Selling Holder for the sale of its or his Shares
in the proposed sale; provided that the Selling Holder shall use reasonable
efforts to negotiate indemnities on a several, and not joint, basis, and that in
all events any indemnity by the Tag-Along Holder will be limited to the net
proceeds received by the Tag-Along Holder (it being understood that if either or
both of these points are not successfully negotiated, the Tag-Along Holder may
withdraw its notice of its election to participate in the sale).
Section 6. Transfers of Company Voting Securities. (a) Except as the same
may be approved by a majority of the Disinterested Directors in a specific
resolution to such effect adopted prior to the taking of such action, no member
of the Investor Group shall, directly or indirectly, sell, transfer or otherwise
dispose of any Company Voting Securities to any person or group (other than to
another member of the Investor Group) prior to the third anniversary of the
Effective Date in a transaction that would, to the knowledge of the Investor
Group, upon consummation of such sale, transfer or disposition, result in such
person or group beneficially owning Company Voting Securities that would
represent 5% or more of the Combined Voting Power of all Company Voting
Securities; provided, however, that any member of the Investor Group shall be
entitled to pledge or hypothecate any number of Company Voting Securities to any
bank or other financial institution in connection with any bona fide financing
transaction involving any member of the Investor Group or any of its Affiliates
and, upon any realization of the collateral represented by such pledge or
hypothecation, the pledgee shall take and own such Company Voting Securities
free and clear of, and not subject to any of the restrictions set forth in, this
agreement. Notwithstanding the foregoing, on and after the eleventh business day
following commencement of a tender or exchange offer made by a person who is not
a member of the Investor Group for outstanding Company Voting Securities, any
member of the Investor Group may tender or
7
<PAGE>
exchange any Company Voting Securities beneficially owned by it pursuant to such
tender or exchange offer if such tender or exchange offer shall have been
approved or recommended by a majority of the Disinterested Directors.
(b) Except as the same may be approved by a majority of the
Disinterested Directors in a specific resolution to such effect adopted prior to
the taking of such action, no member of the Shareholder Group shall, directly or
indirectly, sell, transfer or otherwise dispose of any Company Voting Securities
to any person or group (other than to another member of the Shareholder Group)
prior to the third anniversary of the Effective Date in a transaction that
would, to the knowledge of the Shareholder Group, upon consummation of such
sale, transfer or disposition, result in such person or group beneficially
owning Company Voting Securities that would represent 5% or more of the Combined
Voting Power of all Company Voting Securities; provided, however, that any
member of the Shareholder Group shall be entitled to pledge or hypothecate any
number of Company Voting Securities to any bank or other financial institution
in connection with any bona fide financing transaction involving any member of
the Shareholder Group or any of its Affiliates and, upon any realization of the
collateral represented by such pledge or hypothecation, the pledgee shall take
and own such Company Voting Securities free and clear of, and not subject to any
of the restrictions set forth in, this Agreement. Notwithstanding the foregoing,
on and after the eleventh business day following commencement of a tender or
exchange offer made by a person who is not a member of the Shareholder Group for
outstanding Company Voting Securities, any member of the Shareholder Group may
tender or exchange any Company Voting Securities beneficially owned by it
pursuant to such tender or exchange offer if such tender or exchange offer shall
have been approved or recommended by a majority of the Disinterested Directors.
Section 7. Board Seats. So long as Shareholder is entitled to designate
directors in accordance with the provisions of Section 4.5 of the Investment
Agreement, Investor shall vote all Company Voting Securities owned of record by
Investor or with respect to which Investor has voting control in favor of the
election of Shareholder's nominees to the Company's Board of Directors and the
Independent Director nominees chosen in accordance with the terms of the
Investment Agreement. So long as Investor is entitled to designate directors in
accordance with the provisions of Section 4.4 of the Investment Agreement,
Shareholder shall vote all Company Voting Securities owned of record by
Shareholder or with respect to which Shareholder has voting control in favor of
the election of Investor's nominees to the Company's Board of Directors and the
Independent Director nominees chosen in accordance with the terms of the
Investment Agreement.
Section 8. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, telecopy, to
the appropriate address or telecopy number set forth below (or at such other
address or telecopy number for a party as shall be specified by like notice):
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<PAGE>
if to Investor:
Samstock, L.L.C.
Two N. Riverside Plaza
Chicago, IL 60606
Attention: F. Philip Handy
Telecopy Number: (312) 454-1671
with a copy to:
Rosenberg & Liebentritt, P.C.
Two N. Riverside Plaza
Chicago, IL 60606
Attention: Walter S. Lowry
Telecopy Number: (312) 454-0335
if to the Company:
Davel Communications Group, Inc.
1429 Massaro Boulevard
Tampa, Florida 33619
Attention: Robert D. Hill
Telecopy Number: (813) 626-9610
with a copy to:
Kirkland & Ellis
200 E. Randolph Drive
Chicago, IL 60601
Attention: R. Scott Falk
Telecopy Number: (312) 861-2200
with an additional copy to:
Davel Communications Group, Inc.
1429 Massaro Boulevard
Tampa, Florida 33619
Attention: Theodore C. Rammelkamp, Jr.
Telecopy Number: (813) 626-9610
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If to Shareholder:
Mr. David R. Hill
601 West Morgan
Jacksonville, IL 62650
Telecopy Number: (217) 243-6016
Section 9. Termination. Unless this Agreement specifically provides for
earlier or later termination with respect to any particular right or obligation,
this Agreement shall terminate and be of no further force and effect (i) in the
case of Investor, if Investor and its Permitted Transferees shall, at any time,
cease to own in the aggregate Company Voting Securities representing at least
five percent (5%) of all Company Voting Securities outstanding or (ii) in the
case of Shareholder, if Shareholder and its Permitted Transferees shall, at any
time, cease to own in the aggregate Company Voting Securities representing at
least five percent (5%) of all Company Voting Securities outstanding.
Section 10. Remedies. Any party having rights under this Agreement may
enforce such rights specifically to recover damages caused by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law. The parties agree and acknowledge that money damages may not be
an adequate remedy for any breach of the provisions of this Agreement and,
accordingly, in addition to all other remedies available to any party, such
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce, or prevent any violation of, the provisions of this Agreement.
Section 11. Entire Agreement. This Agreement (including the documents
referred to herein) (a) constitutes the entire agreement, and supersedes all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter of this Agreement and (b) is not intended to
confer upon any Person other than the parties rights or remedies.
Section 12. Amendments; Waivers. (a) This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by each party
hereto.
(b) The failure of any party hereto to comply with any
representation, warranty, covenant or agreement contained in this Agreement may
be waived only by a written instrument signed by the party granting such waiver.
No action taken pursuant to this Agreement, including any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party taking
such action of compliance with any representation, warranty, covenant or
agreement contained in this Agreement, and no failure by any party to take any
action with respect to any breach of this Agreement or default by any other
party shall constitute a waiver of such party's right to enforce any provision
hereof or to take any such action. The waiver by any party hereto of a breach of
any provision hereunder shall not operate
10
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as a waiver of any prior or subsequent breach of the same or any other provision
hereunder.
Section 13. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same Agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 14. Severability. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
Section 15. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof.
Section 16. Binding Effect; Benefit, Non-circumvention. This Agreement
shall inure to the benefit of and be binding upon the parties hereto, and their
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer on any Person other than the parties hereto, and their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement. No shareholder shall take any
action, alone or in concert with any other Person, to circumvent any of the
provisions of this Agreement.
Section 17. Assignment. Neither this Agreement nor any of the rights,
interest or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, except that Investor may assign any of or
all of its rights and obligations under this Agreement to any person that is an
Affiliate of Samuel Zell or an Affiliate of any one or more trusts established
for the benefit of Samuel Zell and/or members of his family without the consent
of any other party, and Shareholder may assign any of or all of his rights and
obligations under this Agreement to one or more Affiliates of Shareholder
(including any Shareholder Family Entity) without the consent of any other
party; provided that, in each case, such person or persons shall have executed
and delivered a joinder to this Agreement and agreed to be bound by the terms
and conditions hereof. Subject to the preceding sentence, this Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.
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Section 18. Interpretation. The headings contained in this Agreement are
inserted for convenience of reference only and shall not affect in anyway the
meaning or interpretation of this Agreement. All references to a Section,
Article, Schedule or Exhibit contained herein mean Sections, Articles, Schedules
or Exhibits of this Agreement unless otherwise stated. All capitalized terms
defined herein are equally applicable to both the singular and plural forms of
such terms.
Whenever the words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation".
Section 19. Consent to Jurisdiction. Each party hereto irrevocably submits
to the nonexclusive jurisdiction of (a) the state courts of the State of
Illinois and (b) any federal district court in the State of Illinois for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby.
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IN WITNESS WHEREOF, the undersigned have executed this Shareholders
Agreement as of the day and year first above written.
SAMSTOCK, L.L.C.
____________________________________
By:
____________________________________
David R. Hill, individually
DAVEL COMMUNICATIONS GROUP, INC.
_______________________________
By:
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EXHIBIT A
---------
OWNERSHIP OF DAVEL COMMUNICATIONS GROUP, INC.
COMMON STOCK AND OPTIONS
------------------------
Investor Shares:
Shareholder Shares:
Shareholder Options Schedule
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Options Date Exp. Date Option Price Shares Shares
- -------------- --------- ------------ Outstanding Exercisable
----------- -----------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
Exhibit 10.13
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into effective the first
day of June, 1998 by and between Davel Communications Group, Inc. ("Company" or
"Employer") and Robert Hill ("Executive" or "Employee").
WHEREAS, the Executive desires to serve as Chief Executive Officer of the
Company; and
WHEREAS, the Company desires to employ the Executive as Chief Executive
Officer of the Company upon the terms and conditions specified in this Agreement
and the Executive desires to serve as Chief Executive Officer upon the terms and
conditions specified in this Agreement; and
NOW WHEREFORE in consideration of the mutual covenants herein, the parties
state and agree as follows:
1. Employment. The Company hereby agrees to employee the Executive and the
Executive hereby agrees to remain in the employ of the Company upon the
terms and conditions herein set forth.
2. Term. Employment shall be for a term commencing on the effective date
hereof and, subject to termination as provided herein, expiring on December
31, 2000. Upon expiration, this Agreement shall renew for consecutive one
year terms unless either party gives the other party written notice of its
intent not to renew at least sixty days prior to the expiration of the
original or any successive or extended term.
3. Duties.
a. Assignments. 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.
b. Best Efforts. The Employee shall devote his best efforts, on a full-
time basis, to the Employer's business, and will not engage in any
employment or enterprise detracting from this goal. Employee shall
travel as reasonably required in the performance of his duties
hereunder.
c. Reporting. The Employee as Chief Executive Officer, and in such other
offices as from time to time assigned in Davel or associated
enterprises, shall perform the duties of Chief Executive Officer which
shall consist of the duties normally associated with such positions
and such other duties as shall be from time to time assigned. In the
regular conduct of his duties the Employee shall report to and be
responsible to the Chairman of the Board and the Board of Directors.
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d. Place of Performance. In connection with his employment by the
Company, the executive shall be based at the principal executive
offices of the Company which as of the date of this Agreement are in
Tampa, Florida or at such other location as the Chief Executive
Officer may specify.
4. Compensation.
a. Base Salary. During the term of this Agreement, the Company shall pay
to the Executive a base salary ("Base Pay") of not less than $250,000
per annum which Base Salary shall be reviewed annually by the Chairman
of the Board, the Board of Directors and the Compensation Committee
and may be increased, or decreased (but not below the aforementioned
amount) upon recommendation of the Chairman of the Board and the Board
of Directors to the Compensation Committee. Further, the Compensation
Committee upon recommendation of the Board of Directors or the
Chairman of the Board may in its sole discretion determine to pay the
Executive additional compensation in cash or property as may be
determined from time to time. Base Pay will be paid in accordance with
the normal payroll practices of the Company, but not less frequently
than monthly.
b. Incentive Bonus. The Executive shall be eligible for an annual
incentive bonus ("Incentive Bonus") of up to 120% of the Executive's
Base Pay ("Maximum Incentive Bonus") and is assigned a target
incentive bonus ("Target Incentive Bonus") of 60% of the Executive's
Base Pay for such year. The Executive's actual Incentive Bonus will be
paid within 90 days of the end of the Company's fiscal year computed
and determined by the Compensation Committee upon recommendation of
the Chief Executive Officer in respect of the Executive's performance
measured relative to Company, departmental and individual objectives
as follows:
i. Company Objectives. Up to 70% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
company objectives ("Company Objectives") which shall be
determined by reference to growth in earnings per share ("EPSG")
and growth in earnings before interest, taxes, depreciation and
amortization ("EBITDAG") of the Company.
(1) Up to 35% of the Executive's annual Maximum Incentive Bonus
shall be determined by reference to EPSG ("EPSG Objectives")
which shall be determined consistently with the manner in
which the Company reports such earnings for financial
purposes adjusted for extraordinary items and shall be
determined as a function of EPSG, computed as follows:
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(a) If EPSG is less than 10%, there shall be no award of
the portion of any Incentive Bonus attributable to the
attainment of EPSG Objectives.
(b) If EPSG is 10% or more, but not greater than 20%, then
the portion of the Incentive Bonus awarded for
attainment of EPSG Objectives shall be computed in
accordance with the following formula: [EPSG * 5] * 35%
of the Target Incentive Bonus.
(c) If EPSG is more than 20%, but not greater than 25%,
then the portion of the Incentive Bonus awarded for
attainment of EPSG Objectives shall be computed in
accordance with the following formula: [EPSG *6] * 25%
of the Target Incentive Bonus.
(d) If EPSG is more than 35%, then the portion of the
Incentive Bonus awarded for attainment of EPSG
Objectives shall be not more than 15% of the
Executive's Base Pay and shall be computed in
accordance with the following formula: [EPSG * 6.66667]
* 35% of the Target Incentive Bonus.
(2) Up to 35% of the Executive's annual Maximum Incentive Bonus
shall be determined by reference to EBITDAG ("EBITDAG
Objectives") which shall be determined consistently with the
manner in which the Company reports earnings before
interest, taxes, depreciation and amortization for financial
purposes adjusted for extraordinary items and shall be
determined as a function of EBITDAG, computed as follows:
(a) If EBITDAG is less than 10%, there shall be no award of
the portion of any Incentive Bonus attributable to the
attainment of EBITDAG Objectives.
(b) If EBITDAG is 10% or more, but not greater than 20%,
then the portion of the Incentive Bonus awarded for
attainment of EBITDAG Objectives shall be computed in
accordance with the following formula: [EBITDAG * 5] *
35% of the Target Incentive Bonus.
(c) If EBITDAG is more than 20%, but not greater than 35%,
then the portion of the Incentive Bonus awarded for
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attainment of EBITDAG Objectives shall be computed in
accordance with the following formula: [EBITDAG *6] *
35% of the Target Incentive Bonus.
(d) If EBITDAG is more than 35%, then the portion of the
Incentive Bonus awarded for attainment of EBITDAG
Objectives shall be not more than 15% of the
Executive's Base Pay and shall be computed in
accordance with the following formula: [EBITDAG *
6.66667] * 35% of the Target Incentive Bonus.
ii. Personal Objectives. Up to 30% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
personal objectives ("Personal Objectives") which shall be
defined in a writing provided to the Executive by the Board of
Directors after January 1/st/ and prior to January 30/th/ of each
year this Agreement is in effect except that in the year the
Executive executes this Agreement such writing shall be provided
within 60 days of the date of execution by the Executive. Based
upon the Board of Director's evaluation of the Executive's
attainment of the Personal Objectives, the Board of Director's
and the Chairman of the Board shall recommend to the Compensation
Committee an award of Incentive Bonus of up to 36% of the
Executive's Base Pay.
c. Stock Options. On or before March 31 of the year following each year
this contract is in effect the Executive shall be awarded a minimum of
5,000 options, or such greater number as shall be determined by the
Compensation Committee upon consideration of the recommendation of the
Chief Executive Officer. Said options shall have an exercise price not
to exceed the closing price of the Company's stock on the last date
for which a closing price is available prior to the date on which the
Compensation Committee approves such award and shall otherwise be
issued subject to and in accordance with the Company's Stock Option
Plan.
5. Benefits.
a. 401K Plan. Employer has established a 401(k) Profit Sharing Plan to
provide for voluntary before and after tax contributions by the
employees of the Company. 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. The Executive may participate in such
plan provided he is otherwise qualified under the terms and conditions
of any such Profit Sharing Plan.
b. Vacation. The Executive shall receive 20 days of paid vacation per
year accruing
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at a rate of 1 2/3 vacation days per month. Any vacation days accrued
but not used in the calendar year earned shall carry over for use in
future years except in no event shall the Executive accumulate more
than 40 days of vacation time.
c. Cafeteria Plan. 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. Health Insurance. 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. Disability. The Employer shall maintain an executive disability plan
for the benefit of the Executive which shall provide a minimum benefit
of 50% of the Executive's base salary in the event of disability.
f. Automobile. The Employer shall provide an automobile to 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.
g. Expenses. The Company shall reimburse Employee for reasonable expenses
incurred in the performance of his duties hereunder upon presentation
of proper evidence thereof as required by Employer.
h. Moving Expenses. The Company shall pay reasonable moving expenses (as
determined by the Employer) to the Executive if the Employer requires
the Executive to be based at any office or location other than the
current Tampa, Florida headquarters which change of location would
require the Executive to commute a distance from his primary residence
in excess of the greater of 50 miles or 125 percent of the distance of
such commute prior to the change of location.
i. Other Benefits. The Executive shall be entitled to participate in such
other employee benefit and welfare plans as the Company may from time
to time establish subject to the terms, conditions and eligibility
requirements as the Company shall prescribe.
6. Termination.
a. Involuntary Termination. The Executive will be treated for the
purposes of this Agreement as having been involuntarily terminated
("Involuntary Termination") by the Company if his employment is
terminated under any of the following
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circumstances:
i. the Company has breached any material provision of this Agreement
and within 30 days after written notice thereof from the
Executive the Company fails to cure such breach; or
ii. at the expiration of the term of employment hereunder the Company
has notified the Executive pursuant to (P) 2 that the Company
intends not to renew the term of employment; or
iii. the Board of the Company gives the Executive notice of
termination pursuant to this paragraph ((P) 6-a-iii).
iv. The Board fails to appoint the Executive as Chief Executive
Officer.
b. Voluntary Termination. The Executive's employment shall be deemed to
have been voluntarily terminated if Executive's employment is
terminated in any of the following circumstances:
i. Upon sixty (60) days' written notice to the Company of the
Executive's intent to terminate this Agreement; or
ii. The termination of the Executive's employment upon the death of
the Employee.
c. Termination for Cause. The Executive shall be deemed to have been
terminated for Cause if the employment of the Executive is terminated
by written notice in any of the following circumstances:
i. the willful and continued failure by the Executive to perform
substantially his duties hereunder (other than from any such
failure due to the Executive's Disability) which failure shall
continue for 30 days after notice for such substantial
performance is provided to the Executive specifying the manner in
which the Company believes the Executive has not substantially
performed; or
ii. the willful misconduct of the Executive which is materially
injurious to the Company either financially or otherwise; or
iii. the breach of the Confidentiality and Nonsolicitation provisions
of this Agreement set forth at (P) 8; or
iv. the Executive terminates his employment without giving the notice
required by (P)6-b-i.
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d. Termination for Disability. The Executive shall be deemed to have been
terminated for Disability if the employment of the Executive is
terminated for his incapacity due to physical or mental illness to
substantially perform his duties on a full-time basis for six (6)
consecutive months and, within thirty (30) days after a notice of
termination is thereafter given by the Company, the Executive shall
not have returned to the full-time performance of the Executive's
duties; provided, however, if the Executive shall not agree with a
determination to terminate him because of Disability, the question of
Executive's disability shall be subject to the certification of a
qualified medical doctor agreed to by the Company and the Executive
or, in the event of the Executive's incapacity to designate a doctor,
the Executive's legal representative. In the absence of agreement
between the Company and the Executive, each party shall nominate a
qualified medical doctor and the two doctors shall select a third
doctor, who shall make the determination as to Disability.
e. Termination Upon a Change of Control. The Executive shall be deemed to
have been terminated upon a "Change of Control" (as hereafter defined)
if a Change of Control occurs while the Executive is an employee of
the Company and within two years of such Change in Control either the
Company terminates the Executive for any reason except the death of
the Executive or the Executive elects to terminate his employment for
any reason. A Change in Control shall occur upon any person other than
David Hill or his descendants or Samstock, L.L.C. and its permitted
transferees becoming the owner, either directly or indirectly, of 25%
or more of the combined voting power of the Company's then outstanding
securities.
7. Termination Benefits and Payments.
a. Involuntary Termination and Termination for Disability. In the event
of the termination of the Executive's employment pursuant to the
provisions of (P) 6-a or (P)6-d then all previously awarded options
shall be fully vested and exercisable in accordance with their terms
when issued and all previously granted shares of stock shall be fully
vested and shall remain subject to such restrictions on transfer in
place as of the date of the Executive's termination and the Executive
shall be entitled to the following benefits and termination payments:
i. Unpaid Amounts. All accrued but unpaid Base Pay including credit
for unused vacation days limited in accordance with (P) 5-b
payable within 10 days of the date of termination, plus
ii. Base Pay. Payable within 10 days of the date of termination the
greater of one year's Base Pay or the remaining amount of Base
Pay due to the Executive through the end of the term hereof both
computed at the Executive's highest annualized rate of Base Pay
during the three year
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period prior to termination, plus
iii. Bonus. Payable within 10 days of the date of termination the
greater of the Executive's Target Incentive Bonus or the
Executive's average, annualized Incentive Bonus, if any, during
the three year period prior to the Executive's termination, plus
iv. Benefits. For the balance of the remaining term of this Agreement
at the date of Termination of the Executive's employment
("Termination Period") the Company shall maintain in full force
and effect for the continued benefit of the Executive all
employee welfare benefit plans and prerequisite programs in which
the Executive was entitled to participate immediately prior to
the Executive's termination or shall arrange to make available to
the Executive benefits substantially similar to those which the
Executive would otherwise have been entitled to receive if his
employment had not been terminated. Such benefits shall be
provided to the Executive on the same terms and conditions
(including employee contributions and premium payments) under
which the Executive was entitled to participate immediately prior
to the Executive's termination. Notwithstanding the foregoing for
the purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("Cobra") the Executive's "qualifying event" shall be
his date of termination from the Company. During the first thirty
days of the Termination Period, the Company shall provide to the
Executive at the Company's expense office space and staff support
similar to that provided immediately prior to termination.
v. Reduction of Termination Payments. In the event termination of
the Executive's employment is pursuant to the provisions of (P)
6-d, then any amounts otherwise payable to the Executive pursuant
to the terms of (P) 7-a-ii shall be payable monthly during the
Termination Period and shall be subject to offset for any after
tax amounts received by the Executive pursuant to a plan
maintained by the Employer as described at (P) 5-f.
b. Voluntary Termination and Termination for Cause. In the event of the
termination of the Executive's employment pursuant to the provisions
of (P) 6-b or (P) 6-c, then the Executive shall be entitled to all
accrued but unpaid Base Pay including credit for unused vacation days
limited in accordance with (P) 5-b payable within 10 days of the date
of termination.
c. Termination Upon a Change in Control. In the event of the termination
of the Executive's employment pursuant to the provisions of (P) 6-e,
then all previously awarded options shall vest and become immediately
exercisable and all previously granted shares of stock shall be fully
vested with all restrictions on transfer of such shares removed and
the Executive shall be entitled to the
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following benefits and termination payments:
i. Unpaid Amounts. All accrued but unpaid Base Pay including credit
for unused vacation days limited in accordance with (P) 5-b
payable within 10 days of the date of termination, plus
ii. Severance Payment. A severance payment, subject to the
limitations of (P) 7-c-iv payable within 10 days of the date of
termination which shall be the product of three (3) times the sum
of the Executive's Base Salary and Target Incentive Bonuses for
the year in which the Change in Control occurred.
iii. Benefits. For the balance of the remaining term of this
Agreement at the date of Termination of the Executive's
employment ("Termination Period") the Company shall maintain in
full force and effect for the continued benefit of the Executive
all employee welfare benefit plans and prerequisite programs in
which the Executive was entitled to participate immediately prior
to the Executive's termination or shall arrange to make available
to the Executive benefits substantially similar to those which
the Executive would otherwise have been entitled to receive if
his employment had not been terminated. Such benefits shall be
provided to the Executive on the same terms and conditions
(including employee contributions and premium payments) under
which the Executive was entitled to participate immediately prior
to the Executive's termination. Notwithstanding the foregoing for
the purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("Cobra") the Executive's "qualifying event" shall be
his date of termination from the Company. During the first thirty
days of the Termination Period, the Company shall provide to the
Executive at the Company's expense office space and staff support
similar to that provided immediately prior to termination.
iv. Limitation on Severance Payment. In the event that the total
amount of the Severance Payment due to the Executive pursuant to
(P) 7-f-ii together with all other payments and the value of any
benefit received or to be received by the Executive in the
connection with termination upon a Change in Control constitutes
a "Parachute Payment" within the meaning of (S)280G(b)(2) of the
Internal Revenue Code of 1986, as amended ("IRC") and such
Parachute Payment would result in all or a portion of such
payments being subject to the excise tax imposed by (S) 4999 IRC
then the amount due to the Executive on termination after a
Change in Control shall be either the amount determined in
accordance with (P) 7-f-ii or such lesser amount which would not
result in any portion of the Severance Pay being subject to an
excise tax under (S)4999 IRC, whichever amount, taking into
account the applicable Federal, state and local income taxes and
the
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excise tax imposed by (S)4999 IRC results in the receipt by the
Executive, on an after-tax basis, of the greatest amount of
Severance Pay under this section, notwithstanding that all or
some portion of the Severance Pay may be subject to excise tax
under (S)4999 IRC.
8. Confidentiality and Nonsolicitation Agreement
a. Confidentiality. The Executive acknowledges that in the course of his
employment by the Company, he will or may have access to and become
informed of confidential and secret information which is a competitive
asset of the Company ("Confidential Information"), including , without
limitation, (i) the terms of any agreement between the Company and any
employee, customer, or supplier, (ii) pricing strategy, (iii)
merchandising and marketing methods, (iv) product ideas and
strategies, (v) personnel training and development programs, (vi)
financial results, (vii) strategic systems software, and (viii) any
non-public information concerning the Company, its employees,
suppliers or customers. The Executive agrees that he will keep all
Confidential Information in strict confidence during the term of his
employment by the Company and thereafter and will not directly or
indirectly make known, divulge, reveal, furnish, make available, or
use any Confidential Information (except in the course of his regular
authorized duties on behalf of the Company). The Executive agrees that
the obligations of confidentiality hereunder shall survive termination
of his employment at the Company regardless of any actual or alleged
breach by the Company of this Agreement and shall continue for two
years following such termination provided that such obligation shall
terminate earlier (i) as to specific information that shall have
become, through no fault of the Executive, generally known to the
public or (ii) as to the Confidential Information which the executive
is required by law to disclose (after giving the Company notice and an
opportunity to contest such requirement). The Executive's obligation
under this (P) 8 are in addition to, and not in limitation or
preemption of , all other obligations of confidentiality which the
executive may have to the Company under general legal or equitable
principles.
b. Documents. Except in the ordinary course of the Company's business,
the Executive shall not at any time following the date of this
Agreement, make or cause to be made, any copies, pictures, duplicates,
facsimiles or other reproductions or recordings or any abstracts or
summaries including or reflecting Confidential Information. All such
documents and other property furnished to the Executive by the Company
or otherwise acquired or developed by the Company shall at all times
be the property of the Company. Upon termination of the Executive's
employment by the Company, the Executive will return to the Company
any such documents or other property of the Company which are in the
possession, custody or control of the Executive.
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c. Nonsolicitation. In the event of the Executive's termination of
employment for any reason, the Executive agrees that he will not in
any capacity, on his own behalf or on behalf of any other firm, person
or entity, for a period of two years, solicit, or assist in the
solicitation of, any employee of the Company to terminate his or her
employment with the Company.
d. Injunctive Relief. The Executive acknowledges and agrees that a
violation of the foregoing provisions of this (P) 8 (referred to
collectively as the Confidentiality and Nonsolicitation Agreement)
that results in material detriment to the Company would cause harm to
the Company, and that the Company's remedy at law for any such
violation would be inadequate. In recognition of the foregoing, the
executive agrees that, in addition to any other relief afforded by law
or this Agreement, including damages sustained by a breach of this
Agreement and any other forfeitures under (P) 8, and without any
necessity or proof of actual damages, the Company shall have the right
to enforce this permanent injunction, it being the understanding of
the undersigned parties hereto that damages, the forfeitures described
above and injunctions shall all be proper models of relief and are not
to be considered as alternative remedies.
9. Covenant Not to Compete.
a. 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.
b. For a period of one year after the expiration or termination of this
Agreement, except in the case of a termination upon a Change in
Control as set forth at (P) 6-e in which case the period shall be two
years, 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.
c. 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 a vailable to Employer.
10. Miscellaneous.
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a. Arbitration. Any dispute between the Executive and the Company under
this Agreement shall be resolved (except as provided below) through
arbitration by an arbitrator selected under the rules of the American
Arbitration Association and the arbitration shall be conducted in
Tampa, Florida under the rules of said association. Each party shall
each be entitled to present evidence and argument to the arbitrator.
The arbitrator shall have the right only to interpret and apply the
provisions of this Agreement and may not change any of its provisions.
The arbitrator shall permit reasonable pre-hearing discovery of facts,
to the extent necessary to establish a claim or a defense to a claim,
subject to supervision by the arbitrator. The determination of the
arbitrator shall be conclusive and binding upon the parties and
judgement upon the same may be entered in any court having
jurisdiction thereof. The arbitrator shall give written notice to the
parties stating his or their determination, and shall furnish to each
party a signed copy of such determination. Notwithstanding the
foregoing, the Company shall not be required to seek or participate in
arbitration regarding any breach of the Executive's Confidentiality
and Nonsolicitation Agreement contained in (P) 8, but may pursue its
remedies for such breach in a court of competent jurisdiction. The
party failing to substantially prevail in any proceeding arising out
of this Agreement shall bear the reasonable expenses of the other
including, but not limited to, preparation and attending the
proceeding, the reasonable attorney fees and allocable cost of in-
house counsel and any other expenses incurred by the other party. This
Agreement shall be governed and construed in accordance with the laws
of the State of Florida, excluding principles of conflict of laws.
b. Agreement. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
the subject matter hereof and contains all of the covenants and
agreements between the parties with respect to such subject matter.
Prior to the Execution hereof the Company shall have paid the
Executive all salary, bonus, options and stock grants due pursuant to
prior agreements the receipt whereof is acknowledged by the Executive.
Each party to this Agreement acknowledges that no representation,
inducements, promises, or other agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party,
pertaining to the subject matter hereof, which are not embodies
herein, and that no other agreement, statement, or promise pertaining
to the subject matter hereof that is not contained in this Agreement
shall be valid or binding on either party.
c. No Obligation to Mitigate. After termination the Executive is under
no obligation to mitigate damages or the amount of any payment
provided for hereunder by seeking other employment or otherwise. The
Executive shall notify the Company within thirty (30) days after the
commencement of any such benefits.
d. Withholding of Taxes. The Company may withhold from any amounts
payable
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under this Agreement all federal, state, city or other taxes as the
Company is required to withhold pursuant to any law or government
regulation or ruling.
e. Post-termination Assistance. The Executive agrees that after his
employment with the Company has terminated he will provide, upon
reasonable notice from the Company, such information and assistance to
the Company as may reasonably requested by the Company in connection
with any litigation in which it or any of its affiliates is or may
become a party; provided, however, that the Company agrees to
reimburse the executive for any related expenses, including travel
expenses. Further, if requested by the Employer, the Employee agrees
to cooperate in training his successor following notice of termination
of this Agreement.
f. Successors and Binding Agreement.
i. This Agreement will be binding upon and inure to the benefit
reorganization or otherwise(and such successor shall thereafter
be deemed the "Company" for the purpose of this Agreement), but
will not otherwise be assignable, transferable or delegable by
the Company.
ii. This Agreement will inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, and legatees.
iii. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer
or delegate this Agreement.
g. Notices. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests, or
approvals, required or permitted to be given hereunder will be in
writing and will be deemed to have been duly given when within five
days of posting by registered or certified United States mail, return
receipt requested, postage prepaid, addressed to the Company ( to the
attention of the Secretary of the Company) at its principal executive
office and to the Executive at his principal residence, or to such
other address as any party may have furnished to the other in writing
and in accordance herewith, except that notices of changes shall be
effective only upon receipt.
h. Validity. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement
and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the
extent (and only to the extent) necessary to make it enforceable,
valid or legal.
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i. Modification. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto or compliance with any condition or provision of this Agreement
to be performed by such other party will be deemed a waiver of similar
or dissimilar provisions or conditions at that same or at any prior
subsequent time. Unless otherwise noted, references to "Sections" are
to sections of this Agreement. The captions used in this Agreement are
designed for convenient reference only and are not to be used for the
purpose of interpreting any provision of this Agreement.
j. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same agreement.
Date: ___________________, 1998
Davel Communications Group, Inc. Employee
_______________________________ ________________________________
David Hill, Chairman Robert Hill
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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into effective the first
day of June, 1998 by and between Davel Communications Group, Inc. ("Company" or
"Employer") and Theodore C. Rammelkamp, Jr. ("Executive" or "Employee").
WHEREAS, the Executive desires to serve as General Counsel, Senior Vice
President and Secretary of the Company; and
WHEREAS, the Company desires to employ the Executive as General Counsel,
Senior Vice President and Secretary of the Company upon the terms and conditions
specified in this Agreement and the Executive desires to serve as General
Counsel, Senior Vice President and Secretary upon the terms and conditions
specified in this Agreement; and
NOW WHEREFORE in consideration of the mutual covenants herein, the parties
state and agree as follows:
1. Employment. The Company hereby agrees to employee the Executive and the
Executive hereby agrees to remain in the employ of the Company upon the
terms and conditions herein set forth.
2. Term. Employment shall be for a term commencing on the effective date
hereof and, subject to termination as provided herein, expiring on December
31, 2000. Upon expiration, this Agreement shall renew for consecutive one
year terms unless either party gives the other party written notice of its
intent not to renew at least sixty days prior to the expiration of the
original or any successive or extended term.
3. Duties.
a. Assignments. 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. Best Efforts. The Employee shall devote his best efforts, on a full-
time basis, to the Employer's business, and will not engage in any
employment or enterprise detracting from this goal. Employee shall
travel as reasonably required in the performance of his duties
hereunder.
c. Reporting. The Employee as General Counsel, Senior Vice President and
Secretary, and in such other offices as from time to time assigned in
Davel or associated enterprises, shall perform the duties of General
Counsel, Senior Vice President and Secretary which shall consist of
the duties normally associated
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with such positions and such other duties as shall be from time to
time assigned. In the regular conduct of his duties the Employee shall
report to and be responsible to the Chief Executive Officer, or such
other officer of the Company, as the Chief Executive Officer may
direct.
d. Place of Performance. In connection with his employment by the
Company, the executive shall be based at the principal executive
offices of the Company which as of the date of this Agreement are in
Tampa, Florida or at such other location as the Chief Executive
Officer may specify.
4. Compensation.
a. Base Salary. During the term of this Agreement, the Company shall pay
to the Executive a base salary ("Base Pay") of not less than $170,000
per annum which Base Salary shall be reviewed annually by the Chief
Executive Officer and the Compensation Committee and may be increased,
or decreased (but not below the aforementioned amount) upon
recommendation of the Chief Executive Officer to the Compensation
Committee. Further, the Compensation Committee upon recommendation of
the Chief Executive Officer may in its sole discretion determine to
pay the Executive additional compensation in cash or property as may
be determined from time to time. Base Pay will be paid in accordance
with the normal payroll practices of the Company, but not less
frequently than monthly.
b. Incentive Bonus. The Executive shall be eligible for an annual
incentive bonus ("Incentive Bonus") of up to 60% of the Executive's
Base Pay ("Maximum Incentive Bonus") and is assigned a target
incentive bonus ("Target Incentive Bonus") of 30% of the Executive's
Base Pay for such year. The Executive's actual Incentive Bonus will be
paid within 90 days of the end of the Company's fiscal year computed
and determined by the Compensation Committee upon recommendation of
the Chief Executive Officer in respect of the Executive's performance
measured relative to Company, departmental and individual objectives
as follows:
i. Company Objectives. Up to 50% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
company objectives ("Company Objectives") which shall be
determined by reference to growth in earnings per share ("EPSG")
and growth in earnings before interest, taxes, depreciation and
amortization ("EBITDAG") of the Company.
(1) Up to 25% of the Executive's annual Maximum Incentive Bonus
shall be determined by reference to EPSG ("EPSG Objectives")
which shall be determined consistently with the manner in
which
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the Company reports such earnings for financial purposes
adjusted for extraordinary items and shall be determined as
a function of EPSG, computed as follows:
(a) If EPSG is less than 10%, there shall be no award of
the portion of any Incentive Bonus attributable to the
attainment of EPSG Objectives.
(b) If EPSG is 10% or more, but not greater than 20%, then
the portion of the Incentive Bonus awarded for
attainment of EPSG Objectives shall be computed in
accordance with the following formula: [EPSG * 5] * 25%
of the Target Incentive Bonus.
(c) If EPSG is more than 20%, but not greater than 25%,
then the portion of the Incentive Bonus awarded for
attainment of EPSG Objectives shall be computed in
accordance with the following formula: [EPSG *6] * 25%
of the Target Incentive Bonus.
(d) If EPSG is more than 25%, then the portion of the
Incentive Bonus awarded for attainment of EPSG
Objectives shall be not more than 15% of the
Executive's Base Pay and shall be computed in
accordance with the following formula: [EPSG * 6.66667]
* 25% of the Target Incentive Bonus.
(2) Up to 25% of the Executive's annual Maximum Incentive Bonus
shall be determined by reference to EBITDAG ("EBITDAG
Objectives") which shall be determined consistently with the
manner in which the Company reports earnings before
interest, taxes, depreciation and amortization for financial
purposes adjusted for extraordinary items and shall be
determined as a function of EBITDAG, computed as follows:
(a) If EBITDAG is less than 10%, there shall be no award of
the portion of any Incentive Bonus attributable to the
attainment of EBITDAG Objectives.
(b) If EBITDAG is 10% or more, but not greater than 20%,
then the portion of the Incentive Bonus awarded for
attainment of EBITDAG Objectives shall be computed in
accordance with the following formula: [EBITDAG * 5] *
25% of the Target Incentive Bonus.
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(c) If EBITDAG is more than 20%, but not greater than 25%,
then the portion of the Incentive Bonus awarded for
attainment of EBITDAG Objectives shall be computed in
accordance with the following formula: [EBITDAG *6] *
25% of the Target Incentive Bonus.
(d) If EBITDAG is more than 25%, then the portion of the
Incentive Bonus awarded for attainment of EBITDAG
Objectives shall be not more than 15% of the
Executive's Base Pay and shall be computed in
accordance with the following formula: [EBITDAG *
6.66667] * 25% of the Target Incentive Bonus
ii. Department Objectives. Up to 30% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
departmental objectives ("Departmental Objectives") which shall
be defined in a writing provided to the Executive by the Chief
Executive Officer after January 1/st/ and prior to January 30/th/
of each year this Agreement is in effect except that in the year
the Executive executes this Agreement such writing shall be
provided within 60 days of the date of execution by the
Executive. Based upon the Chief Executive Officer's evaluation of
the Executive's attainment of the Departmental Objectives, the
Chief Executive Officer shall recommend to the Compensation
Committee an award of Incentive Bonus of up to 18% of the
Executive's Base Pay.
iii. Personal Objectives. Up to 20% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
personal objectives ("Personal Objectives") which shall be
defined in a writing provided to the Executive by the Chief
Executive Officer after January 1/st/ and prior to January 30/th/
of each year this Agreement is in effect except that in the year
the Executive executes this Agreement such writing shall be
provided within 60 days of the date of execution by the
Executive. Based upon the Chief Executive Officer's evaluation of
the Executive's attainment of the Personal Objectives, the Chief
Executive Officer shall recommend to the Compensation Committee
an award of Incentive Bonus of up to 12% of the Executive's Base
Pay.
c. Stock Options. On or before March 31 of the year following each year
this contract is in effect the Executive shall be awarded a minimum of
5,000 options, or such greater number as shall be determined by the
Compensation Committee upon consideration of the recommendation of the
Chief Executive Officer. Said options shall have an exercise price not
to exceed the closing price of the
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Company's stock on the last date for which a closing price is
available prior to the date on which the Compensation Committee
approves such award and shall otherwise be issued subject to and in
accordance with the Company's Stock Option Plan.
5. Benefits.
a. 401K Plan. Employer has established a 401(k) Profit Sharing Plan to
provide for voluntary before and after tax contributions by the
employees of the Company. 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. The Executive may participate in such
plan provided he is otherwise qualified under the terms and conditions
of any such Profit Sharing Plan.
b. Vacation. The Executive shall receive 20 days of paid vacation per
year accruing at a rate of 1 2/3 vacation days per month. Any vacation
days accrued but not used in the calendar year earned shall carry over
for use in future years except in no event shall the Executive
accumulate more than 40 days of vacation time.
c. Cafeteria Plan. 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. Health Insurance. 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. Disability. The Employer shall maintain an executive disability plan
for the benefit of the Executive which shall provide a minimum benefit
of 50% of the Executive's base salary in the event of disability.
f. Automobile. The Employer shall provide an automobile to 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.
g. Expenses. The Company shall reimburse Employee for reasonable expenses
incurred in the performance of his duties hereunder upon presentation
of proper evidence thereof as required by Employer.
h. Moving Expenses. The Company shall pay reasonable moving expenses (as
determined by the Employer) to the Executive for the Executive to move
to
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Tampa, Florida from Jacksonville, Illinois and if the Employer
requires the Executive to be based at any office or location other
than the current Tampa, Florida headquarters which change of location
would require the Executive to commute a distance from his primary
residence in excess of the greater of 50 miles or 125 percent of the
distance of such commute prior to the change of location.
i. Other Benefits. The Executive shall be entitled to participate in such
other employee benefit and welfare plans as the Company may from time
to time establish subject to the terms, conditions and eligibility
requirements as the Company shall prescribe.
6. Termination.
a. Involuntary Termination. The Executive will be treated for the
purposes of this Agreement as having been involuntarily terminated
("Involuntary Termination") by the Company if his employment is
terminated under any of the following circumstances:
i. the Company has breached any material provision of this Agreement
and within 30 days after written notice thereof from the
Executive the Company fails to cure such breach; or
ii. at the expiration of the term of employment hereunder the Company
has notified the Executive pursuant to (P) 2 that the Company
intends not to renew the term of employment; or
iii. the Board of the Company gives the Executive notice of
termination pursuant to this paragraph ((P) 6-a-iii).
b. Voluntary Termination. The Executive's employment shall be deemed to
have been voluntarily terminated if Executive's employment is
terminated in any of the following circumstances:
i. Upon sixty (60) days' written notice to the Company of the
Executive's intent to terminate this Agreement; or
ii. The termination of the Executive's employment upon the death of
the Employee.
c. Termination for Cause. The Executive shall be deemed to have been
terminated for Cause if the employment of the Executive is terminated
by written notice in any of the following circumstances:
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i. the willful and continued failure by the Executive to perform
substantially his duties hereunder (other than from any such
failure due to the Executive's Disability) which failure shall
continue for 30 days after notice for such substantial
performance is provided to the Executive specifying the manner in
which the Company believes the Executive has not substantially
performed; or
ii. the willful misconduct of the Executive which is materially
injurious to the Company either financially or otherwise; or
iii. the breach of the Confidentiality and Nonsolicitation provisions
of this Agreement set forth at (P) 8; or
iv. the Executive terminates his employment without giving the notice
required by (P)6-b-i.
d. Termination for Disability. The Executive shall be deemed to have been
terminated for Disability if the employment of the Executive is
terminated for his incapacity due to physical or mental illness to
substantially perform his duties on a full-time basis for six (6)
consecutive months and, within thirty (30) days after a notice of
termination is thereafter given by the Company, the Executive shall
not have returned to the full-time performance of the Executive's
duties; provided, however, if the Executive shall not agree with a
determination to terminate him because of Disability, the question of
Executive's disability shall be subject to the certification of a
qualified medical doctor agreed to by the Company and the Executive
or, in the event of the Executive's incapacity to designate a doctor,
the Executive's legal representative. In the absence of agreement
between the Company and the Executive, each party shall nominate a
qualified medical doctor and the two doctors shall select a third
doctor, who shall make the determination as to Disability.
e. Termination Upon a Change of Control. The Executive shall be deemed to
have been terminated upon a "Change of Control" (as hereafter defined)
if a Change of Control occurs while the Executive is an employee of
the Company and within two years of such Change in Control either the
Company terminates the Executive for any reason except the death of
the Executive or the Executive elects to terminate his employment for
any reason. A Change in Control shall occur upon any person other than
David Hill or his descendants or Samstock, L.L.C. and its permitted
transferees becoming the owner, either directly or indirectly, of 25%
or more of the combined voting power of the Company's then outstanding
securities.
7. Termination Benefits and Payments.
a. Involuntary Termination and Termination for Disability. In the event
of the
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termination of the Executive's employment pursuant to the provisions
of (P) 6-a or (P)6-d then all previously awarded options shall be
fully vested and exercisable in accordance with their terms when
issued and all previously granted shares of stock shall be fully
vested and shall remain subject to such restrictions on transfer in
place as of the date of the Executive's termination and the Executive
shall be entitled to the following benefits and termination payments:
i. Unpaid Amounts. All accrued but unpaid Base Pay including credit
for unused vacation days limited in accordance with (P) 5-b
payable within 10 days of the date of termination, plus
ii. Base Pay. Payable within 10 days of the date of termination the
greater of one year's Base Pay or the remaining amount of Base
Pay due to the Executive through the end of the term hereof both
computed at the Executive's highest annualized rate of Base Pay
during the three year period prior to termination, plus
iii. Bonus. Payable within 10 days of the date of termination the
greater of the Executive's Target Incentive Bonus or the
Executive's average, annualized Incentive Bonus, if any, during
the three year period prior to the Executive's termination, plus
iv. Benefits. For the balance of the remaining term of this Agreement
at the date of Termination of the Executive's employment
("Termination Period") the Company shall maintain in full force
and effect for the continued benefit of the Executive all
employee welfare benefit plans and prerequisite programs in which
the Executive was entitled to participate immediately prior to
the Executive's termination or shall arrange to make available to
the Executive benefits substantially similar to those which the
Executive would otherwise have been entitled to receive if his
employment had not been terminated. Such benefits shall be
provided to the Executive on the same terms and conditions
(including employee contributions and premium payments) under
which the Executive was entitled to participate immediately prior
to the Executive's termination. Notwithstanding the foregoing for
the purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("Cobra") the Executive's "qualifying event" shall be
his date of termination from the Company. During the first thirty
days of the Termination Period, the Company shall provide to the
Executive at the Company's expense office space and staff support
similar to that provided immediately prior to termination.
v. Reduction of Termination Payments. In the event termination of
the Executive's employment is pursuant to the provisions of
(P) 6-d, then any amounts otherwise payable to the Executive
pursuant to the terms of (P) 7-a-
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ii shall be payable monthly during the Termination Period and
shall be subject to offset for any after tax amounts received by
the Executive pursuant to a plan maintained by the Employer as
described at (P) 5-f.
b. Voluntary Termination and Termination for Cause. In the event of the
termination of the Executive's employment pursuant to the provisions
of (P) 6-b or (P) 6-c, then the Executive shall be entitled to all
accrued but unpaid Base Pay including credit for unused vacation days
limited in accordance with (P) 5-b payable within 10 days of the date
of termination.
c. Termination Upon a Change in Control. In the event of the termination
of the Executive's employment pursuant to the provisions of (P) 6-e,
then all previously awarded options shall vest and become immediately
exercisable and all previously granted shares of stock shall be fully
vested with all restrictions on transfer of such shares removed and
the Executive shall be entitled to the following benefits and
termination payments:
i. Unpaid Amounts. All accrued but unpaid Base Pay including credit
for unused vacation days limited in accordance with (P) 5-b
payable within 10 days of the date of termination, plus
ii. Severance Payment. A severance payment, subject to the
limitations of (P) 7-c-iv payable within 10 days of the date of
termination which shall be the product of three (3) times the sum
of the Executive's Base Salary and Target Incentive Bonuses for
the year in which the Change in Control occurred.
iii. Benefits. For the balance of the remaining term of this Agreement
at the date of Termination of the Executive's employment
("Termination Period") the Company shall maintain in full force
and effect for the continued benefit of the Executive all
employee welfare benefit plans and prerequisite programs in which
the Executive was entitled to participate immediately prior to
the Executive's termination or shall arrange to make available to
the Executive benefits substantially similar to those which the
Executive would otherwise have been entitled to receive if his
employment had not been terminated. Such benefits shall be
provided to the Executive on the same terms and conditions
(including employee contributions and premium payments) under
which the Executive was entitled to participate immediately prior
to the Executive's termination. Notwithstanding the foregoing for
the purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("Cobra") the Executive's "qualifying event" shall be
his date of termination from the Company. During the first thirty
days of the Termination Period, the Company shall provide to the
Executive at the Company's expense office space and staff
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support similar to that provided immediately prior to
termination.
iv. Limitation on Severance Payment. In the event that the total
amount of the Severance Payment due to the Executive pursuant to
(P) 7-f-ii together with all other payments and the value of any
benefit received or to be received by the Executive in the
connection with termination upon a Change in Control constitutes
a "Parachute Payment" within the meaning of (S)280G(b)(2) of the
Internal Revenue Code of 1986, as amended ("IRC") and such
Parachute Payment would result in all or a portion of such
payments being subject to the excise tax imposed by (S) 4999 IRC
then the amount due to the Executive on termination after a
Change in Control shall be either the amount determined in
accordance with (P) 7-f-ii or such lesser amount which would not
result in any portion of the Severance Pay being subject to an
excise tax under (S)4999 IRC, whichever amount, taking into
account the applicable Federal, state and local income taxes and
the excise tax imposed by (S)4999 IRC results in the receipt by
the Executive, on an after-tax basis, of the greatest amount of
Severance Pay under this section, notwithstanding that all or
some portion of the Severance Pay may be subject to excise tax
under (S)4999 IRC.
8. Confidentiality and Nonsolicitation Agreement
a. Confidentiality. The Executive acknowledges that in the course of his
employment by the Company, he will or may have access to and become
informed of confidential and secret information which is a competitive
asset of the Company ("Confidential Information"), including , without
limitation, (i) the terms of any agreement between the Company and any
employee, customer, or supplier, (ii) pricing strategy, (iii)
merchandising and marketing methods, (iv) product ideas and
strategies, (v) personnel training and development programs, (vi)
financial results, (vii) strategic systems software, and (viii) any
non-public information concerning the Company, its employees,
suppliers or customers. The Executive agrees that he will keep all
Confidential Information in strict confidence during the term of his
employment by the Company and thereafter and will not directly or
indirectly make known, divulge, reveal, furnish, make available, or
use any Confidential Information (except in the course of his regular
authorized duties on behalf of the Company). The Executive agrees that
the obligations of confidentiality hereunder shall survive termination
of his employment at the Company regardless of any actual or alleged
breach by the Company of this Agreement and shall continue for two
years following such termination provided that such obligation shall
terminate earlier (i) as to specific information that shall have
become, through no fault of the Executive, generally known to the
public or (ii) as to the Confidential Information which the executive
is required by law to disclose (after giving the Company notice and an
opportunity to contest such requirement). The Executive's obligation
under this (P)
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8 are in addition to, and not in limitation or preemption of, all
other obligations of confidentiality which the executive may have to
the Company under general legal or equitable principles.
b. Documents. Except in the ordinary course of the Company's business,
the Executive shall not at any time following the date of this
Agreement, make or cause to be made, any copies, pictures, duplicates,
facsimiles or other reproductions or recordings or any abstracts or
summaries including or reflecting Confidential Information. All such
documents and other property furnished to the Executive by the Company
or otherwise acquired or developed by the Company shall at all times
be the property of the Company. Upon termination of the Executive's
employment by the Company, the Executive will return to the Company
any such documents or other property of the Company which are in the
possession, custody or control of the Executive.
c. Nonsolicitation. In the event of the Executive's termination of
employment for any reason, the Executive agrees that he will not in
any capacity, on his own behalf or on behalf of any other firm, person
or entity, for a period of two years, solicit, or assist in the
solicitation of, any employee of the Company to terminate his or her
employment with the Company.
d. Injunctive Relief. The Executive acknowledges and agrees that a
violation of the foregoing provisions of this Paragraph 8 (referred to
collectively as the Confidentiality and Nonsolicitation Agreement)
that results in material detriment to the Company would cause harm to
the Company, and that the Company's remedy at law for any such
violation would be inadequate. In recognition of the foregoing, the
executive agrees that, in addition to any other relief afforded by law
or this Agreement, including damages sustained by a breach of this
Agreement and any other forfeitures under Paragraph 8, and without any
necessity or proof of actual damages, the Company shall have the right
to enforce this permanent injunction, it being the understanding of
the undersigned parties hereto that damages, the forfeitures described
above and injunctions shall all be proper models of relief and are not
to be considered as alternative remedies.
9. Covenant Not to Compete.
a. 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.
b. For a period of one year after the expiration or termination of this
Agreement, except in the case of a termination upon a Change in
Control as set forth at Paragraph 6-e
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in which case the period shall be two years, 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.
10. Miscellaneous.
a. Arbitration. Any dispute between the Executive and the Company under
this Agreement shall be resolved (except as provided below) through
arbitration by an arbitrator selected under the rules of the American
Arbitration Association and the arbitration shall be conducted in
Tampa, Florida under the rules of said association. Each party shall
each be entitled to present evidence and argument to the arbitrator.
The arbitrator shall have the right only to interpret and apply the
provisions of this Agreement and may not change any of its provisions.
The arbitrator shall permit reasonable pre-hearing discovery of facts,
to the extent necessary to establish a claim or a defense to a claim,
subject to supervision by the arbitrator. The determination of the
arbitrator shall be conclusive and binding upon the parties and
judgement upon the same may be entered in any court having
jurisdiction thereof. The arbitrator shall give written notice to the
parties stating his or their determination, and shall furnish to each
party a signed copy of such determination. Notwithstanding the
foregoing, the Company shall not be required to seek or participate in
arbitration regarding any breach of the Executive's Confidentiality
and Nonsolicitation Agreement contained in Paragraph 8, but may pursue
its remedies for such breach in a court of competent jurisdiction. The
party failing to substantially prevail in any proceeding arising out
of this Agreement shall bear the reasonable expenses of the other
including, but not limited to, preparation and attending the
proceeding, the reasonable attorney fees and allocable cost of in-
house counsel and any other expenses incurred by the other party. This
Agreement shall be governed and construed in accordance with the laws
of the State of Florida, excluding principles of conflict of laws.
b. Agreement. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
the subject matter hereof and contains all of the covenants and
agreements between the parties with respect to such subject matter.
Prior to the Execution hereof the Company shall have paid
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the Executive all salary, bonus, options and stock grants due pursuant
to prior agreements the receipt whereof is acknowledged by the
Executive. Each party to this Agreement acknowledges that no
representation, inducements, promises, or other agreements, orally or
otherwise, have been made by any party, or anyone acting on behalf of
any party, pertaining to the subject matter hereof, which are not
embodies herein, and that no other agreement, statement, or promise
pertaining to the subject matter hereof that is not contained in this
Agreement shall be valid or binding on either party.
c. No Obligation to Mitigate. After termination the Executive is under no
obligation to mitigate damages or the amount of any payment provided
for hereunder by seeking other employment or otherwise. The Executive
shall notify the Company within thirty (30) days after the
commencement of any such benefits.
d. Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes
as the Company is required to withhold pursuant to any law or
government regulation or ruling.
e. Post-termination Assistance. The Executive agrees that after his
employment with the Company has terminated he will provide, upon
reasonable notice from the Company, such information and assistance to
the Company as may reasonably requested by the Company in connection
with any litigation in which it or any of its affiliates is or may
become a party; provided, however, that the Company agrees to
reimburse the executive for any related expenses, including travel
expenses. Further, if requested by the Employer, the Employee agrees
to cooperate in training his successor following notice of termination
of this Agreement.
f. Successors and Binding Agreement.
i. This Agreement will be binding upon and inure to the benefit
reorganization or otherwise (and such successor shall thereafter
be deemed the "Company" for the purpose of this Agreement), but
will not otherwise be assignable, transferable or delegable by
the Company.
ii. This Agreement will inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, and legatees.
iii. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer
or delegate this Agreement.
g. Notices. For all purposes of this Agreement, all communications,
including
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without limitation notices, consents, requests, or approvals, required
or permitted to be given hereunder will be in writing and will be
deemed to have been duly given when within five days of posting by
registered or certified United States mail, return receipt requested,
postage prepaid, addressed to the Company (to the attention of the
Secretary of the Company) at its principal executive office and to the
Executive at his principal residence, or to such other address as any
party may have furnished to the other in writing and in accordance
herewith, except that notices of changes shall be effective only upon
receipt.
h. Validity. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement
and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the
extent (and only to the extent) necessary to make it enforceable,
valid or legal.
i. Modification. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto or compliance with any condition or provision of this Agreement
to be performed by such other party will be deemed a waiver of similar
or dissimilar provisions or conditions at that same or at any prior
subsequent time. Unless otherwise noted, references to "Sections" are
to sections of this Agreement. The captions used in this Agreement are
designed for convenient reference only and are not to be used for the
purpose of interpreting any provision of this Agreement.
j. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same agreement.
Date: , 1998
-----------------
Davel Communications Group, Inc. Employee
- ------------------------------------ ------------------------------------
Robert Hill, Chief Executive Officer Theodore C. Rammelkamp, Jr.
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EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into effective the first
day of June, 1998 by and between Davel Communications Group, Inc. ("Company" or
"Employer") and Michael E. Hayes ("Executive" or "Employee").
WHEREAS, the Executive desires to serve as Chief Financial Officer,
Treasurer and Senior Vice President of the Company; and
WHEREAS, the Company desires to employ the Executive as Chief Financial
Officer, Treasurer and Senior Vice President of the Company upon the terms and
conditions specified in this Agreement and the Executive desires to serve as
Chief Financial Officer, Treasurer and Senior Vice President upon the terms and
conditions specified in this Agreement; and
NOW WHEREFORE in consideration of the mutual covenants herein, the parties
state and agree as follows:
1. Employment. The Company hereby agrees to employee the Executive and the
Executive hereby agrees to remain in the employ of the Company upon the
terms and conditions herein set forth.
2. Term. Employment shall be for a term commencing on the effective date
hereof and, subject to termination as provided herein, expiring on December
31, 2000. Upon expiration, this Agreement shall renew for consecutive one
year terms unless either party gives the other party written notice of its
intent not to renew at least sixty days prior to the expiration of the
original or any successive or extended term.
3. Duties.
a. Assignments. 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. Best Efforts. The Employee shall devote his best efforts, on a full-
time basis, to the Employer's business, and will not engage in any
employment or enterprise detracting from this goal. Employee shall
travel as reasonably required in the performance of his duties
hereunder.
c. Reporting. The Employee as Chief Financial Officer, Treasurer and
Senior Vice President, and in such other offices as from time to time
assigned in Davel or associated enterprises, shall perform the duties
of Chief Financial Officer, Treasurer and Senior Vice President which
shall consist of the duties normally
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associated with such positions and such other duties as shall be from
time to time assigned. In the regular conduct of his duties the
Employee shall report to and be responsible to the Chief Executive
Officer, or such other officer of the Company, as the Chief Executive
Officer may direct.
d. Place of Performance. In connection with his employment by the
Company, the executive shall be based at the principal executive
offices of the Company which as of the date of this Agreement are in
Tampa, Florida or at such other location as the Chief Executive
Officer may specify.
4. Compensation.
a. Base Salary. During the term of this Agreement, the Company shall pay
to the Executive a base salary ("Base Pay") of not less than $170,000
per annum which Base Salary shall be reviewed annually by the Chief
Executive Officer and the Compensation Committee and may be increased,
or decreased (but not below the aforementioned amount) upon
recommendation of the Chief Executive Officer to the Compensation
Committee. Further, the Compensation Committee upon recommendation of
the Chief Executive Officer may in its sole discretion determine to
pay the Executive additional compensation in cash or property as may
be determined from time to time. Base Pay will be paid in accordance
with the normal payroll practices of the Company, but not less
frequently than monthly.
b. Incentive Bonus. The Executive shall be eligible for an annual
incentive bonus ("Incentive Bonus") of up to 60% of the Executive's
Base Pay ("Maximum Incentive Bonus") and is assigned a target
incentive bonus ("Target Incentive Bonus") of 30% of the Executive's
Base Pay for such year. The Executive's actual Incentive Bonus will be
paid within 90 days of the end of the Company's fiscal year computed
and determined by the Compensation Committee upon recommendation of
the Chief Executive Officer in respect of the Executive's performance
measured relative to Company, departmental and individual objectives
as follows:
i. Company Objectives. Up to 50% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
company objectives ("Company Objectives") which shall be
determined by reference to growth in earnings per share ("EPSG")
and growth in earnings before interest, taxes, depreciation and
amortization ("EBITDAG") of the Company.
(1) Up to 25% of the Executive's annual Maximum Incentive Bonus
shall be determined by reference to EPSG ("EPSG Objectives")
which shall be determined consistently with the manner in
which
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the Company reports such earnings for financial purposes
adjusted for extraordinary items and shall be determined as
a function of EPSG, computed as follows:
(a) If EPSG is less than 10%, there shall be no award of
the portion of any Incentive Bonus attributable to the
attainment of EPSG Objectives.
(b) If EPSG is 10% or more, but not greater than 20%, then
the portion of the Incentive Bonus awarded for
attainment of EPSG Objectives shall be computed in
accordance with the following formula: [EPSG * 5] * 25%
of the Target Incentive Bonus.
(c) If EPSG is more than 20%, but not greater than 25%,
then the portion of the Incentive Bonus awarded for
attainment of EPSG Objectives shall be computed in
accordance with the following formula: [EPSG *6] * 25%
of the Target Incentive Bonus.
(d) If EPSG is more than 25%, then the portion of the
Incentive Bonus awarded for attainment of EPSG
Objectives shall be not more than 15% of the
Executive's Base Pay and shall be computed in
accordance with the following formula: [EPSG * 6.66667]
* 25% of the Target Incentive Bonus.
(2) Up to 25% of the Executive's annual Maximum Incentive Bonus
shall be determined by reference to EBITDAG ("EBITDAG
Objectives") which shall be determined consistently with the
manner in which the Company reports earnings before
interest, taxes, depreciation and amortization for financial
purposes adjusted for extraordinary items and shall be
determined as a function of EBITDAG, computed as follows:
(a) If EBITDAG is less than 10%, there shall be no award of
the portion of any Incentive Bonus attributable to the
attainment of EBITDAG Objectives.
(b) If EBITDAG is 10% or more, but not greater than 20%,
then the portion of the Incentive Bonus awarded for
attainment of EBITDAG Objectives shall be computed in
accordance with the following formula: [EBITDAG * 5] *
25% of the Target Incentive Bonus.
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(c) If EBITDAG is more than 20%, but not greater than 25%,
then the portion of the Incentive Bonus awarded for
attainment of EBITDAG Objectives shall be computed in
accordance with the following formula: [EBITDAG *6] *
25% of the Target Incentive Bonus.
(d) If EBITDAG is more than 25%, then the portion of the
Incentive Bonus awarded for attainment of EBITDAG
Objectives shall be not more than 15% of the
Executive's Base Pay and shall be computed in
accordance with the following formula: [EBITDAG *
6.66667] * 25% of the Target Incentive Bonus
ii. Department Objectives. Up to 30% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
departmental objectives ("Departmental Objectives") which shall
be defined in a writing provided to the Executive by the Chief
Executive Officer after January 1/st/ and prior to January 30/th/
of each year this Agreement is in effect except that in the year
the Executive executes this Agreement such writing shall be
provided within 60 days of the date of execution by the
Executive. Based upon the Chief Executive Officer's evaluation of
the Executive's attainment of the Departmental Objectives, the
Chief Executive Officer shall recommend to the Compensation
Committee an award of Incentive Bonus of up to 18% of the
Executive's Base Pay.
iii. Personal Objectives. Up to 20% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
personal objectives ("Personal Objectives") which shall be
defined in a writing provided to the Executive by the Chief
Executive Officer after January 1/st/ and prior to January 30/th/
of each year this Agreement is in effect except that in the year
the Executive executes this Agreement such writing shall be
provided within 60 days of the date of execution by the
Executive. Based upon the Chief Executive Officer's evaluation of
the Executive's attainment of the Personal Objectives, the Chief
Executive Officer shall recommend to the Compensation Committee
an award of Incentive Bonus of up to 12% of the Executive's Base
Pay.
c. Stock Options. On or before March 31 of the year following each year
this contract is in effect the Executive shall be awarded a minimum of
5,000 options, or such greater number as shall be determined by the
Compensation Committee upon consideration of the recommendation of the
Chief Executive Officer. Said options shall have an exercise price not
to exceed the closing price of the
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Company's stock on the last date for which a closing price is
available prior to the date on which the Compensation Committee
approves such award and shall otherwise be issued subject to and in
accordance with the Company's Stock Option Plan.
5. Benefits.
a. 401K Plan. Employer has established a 401(k) Profit Sharing Plan to
provide for voluntary before and after tax contributions by the
employees of the Company. 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. The Executive may participate in such
plan provided he is otherwise qualified under the terms and conditions
of any such Profit Sharing Plan.
b. Vacation. The Executive shall receive 20 days of paid vacation per
year accruing at a rate of 1 2/3 vacation days per month. Any vacation
days accrued but not used in the calendar year earned shall carry over
for use in future years except in no event shall the Executive
accumulate more than 40 days of vacation time.
c. Cafeteria Plan. 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. Health Insurance. 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. Disability. The Employer shall maintain an executive disability plan
for the benefit of the Executive which shall provide a minimum benefit
of 50% of the Executive's base salary in the event of disability.
f. Automobile. The Employer shall provide an automobile to 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.
g. Expenses. The Company shall reimburse Employee for reasonable expenses
incurred in the performance of his duties hereunder upon presentation
of proper evidence thereof as required by Employer.
h. Moving Expenses. The Company shall pay reasonable moving expenses (as
determined by the Employer) to the Executive to move from
Jacksonville, Illinois
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to Tampa, Florida and thereafter if the Employer requires the
Executive to be based at any office or location other than the current
Tampa, Florida headquarters which change of location would require the
Executive to commute a distance from his primary residence in excess
of the greater of 50 miles or 125 percent of the distance of such
commute prior to the change of location.
i. Other Benefits. The Executive shall be entitled to participate in such
other employee benefit and welfare plans as the Company may from time
to time establish subject to the terms, conditions and eligibility
requirements as the Company shall prescribe.
6. Termination.
a. Involuntary Termination. The Executive will be treated for the
purposes of this Agreement as having been involuntarily terminated
("Involuntary Termination") by the Company if his employment is
terminated under any of the following circumstances:
i. the Company has breached any material provision of this Agreement
and within 30 days after written notice thereof from the
Executive the Company fails to cure such breach; or
ii. at the expiration of the term of employment hereunder the Company
has notified the Executive pursuant to (P) 2 that the Company
intends not to renew the term of employment; or
iii. the Executive is required to report directly to any officer of
the Company other than the Chief Executive Officer; or
iv. the Board of the Company gives the Executive notice of
termination pursuant to this paragraph ((P) 6-a-iii).
b. Voluntary Termination. The Executive's employment shall be deemed to
have been voluntarily terminated if Executive's employment is
terminated in any of the following circumstances:
i. Upon sixty (60) days' written notice to the Company of the
Executive's intent to terminate this Agreement; or
ii. The termination of the Executive's employment upon the death of
the Employee.
c. Termination for Cause. The Executive shall be deemed to have been
terminated for Cause if the employment of the Executive is terminated
by written notice in
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any of the following circumstances:
i. the willful and continued failure by the Executive to perform
substantially his duties hereunder (other than from any such
failure due to the Executive's Disability) which failure shall
continue for 30 days after notice for such substantial
performance is provided to the Executive specifying the manner in
which the Company believes the Executive has not substantially
performed; or
ii. the willful misconduct of the Executive which is materially
injurious to the Company either financially or otherwise; or
iii. the breach of the Confidentiality and Nonsolicitation provisions
of this Agreement set forth at (P) 8; or
iv. the Executive terminates his employment without giving the notice
required by (P)6-b-i.
d. Termination for Disability. The Executive shall be deemed to have been
terminated for Disability if the employment of the Executive is
terminated for his incapacity due to physical or mental illness to
substantially perform his duties on a full-time basis for six (6)
consecutive months and, within thirty (30) days after a notice of
termination is thereafter given by the Company, the Executive shall
not have returned to the full-time performance of the Executive's
duties; provided, however, if the Executive shall not agree with a
determination to terminate him because of Disability, the question of
Executive's disability shall be subject to the certification of a
qualified medical doctor agreed to by the Company and the Executive
or, in the event of the Executive's incapacity to designate a doctor,
the Executive's legal representative. In the absence of agreement
between the Company and the Executive, each party shall nominate a
qualified medical doctor and the two doctors shall select a third
doctor, who shall make the determination as to Disability.
e. Termination Upon a Change of Control. The Executive shall be deemed to
have been terminated upon a "Change of Control" (as hereafter defined)
if a Change of Control occurs while the Executive is an employee of
the Company and within two years of such Change in Control either the
Company terminates the Executive for any reason except the death of
the Executive or the Executive elects to terminate his employment for
any reason. A Change in Control shall occur upon any person other than
David Hill or his descendants or Samstock, L.L.C. and its permitted
transferees becoming the owner, either directly or indirectly, of 25%
or more of the combined voting power of the Company's then outstanding
securities.
7. Termination Benefits and Payments.
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a. Involuntary Termination and Termination for Disability. In the event
of the termination of the Executive's employment pursuant to the
provisions of (P) 6-a or (P)6-d then all previously awarded options
shall be fully vested and exercisable in accordance with their terms
when issued and all previously granted shares of stock shall be fully
vested and shall remain subject to such restrictions on transfer in
place as of the date of the Executive's termination and the Executive
shall be entitled to the following benefits and termination payments:
i. Unpaid Amounts. All accrued but unpaid Base Pay including credit
for unused vacation days limited in accordance with (P) 5-b
payable within 10 days of the date of termination, plus
ii. Base Pay. Payable within 10 days of the date of termination the
greater of one year's Base Pay or the remaining amount of Base
Pay due to the Executive through the end of the term hereof both
computed at the Executive's highest annualized rate of Base Pay
during the three year period prior to termination, plus
iii. Bonus. Payable within 10 days of the date of termination the
greater of the Executive's Target Incentive Bonus or the
Executive's average, annualized Incentive Bonus, if any, during
the three year period prior to the Executive's termination, plus
iv. Benefits. For the balance of the remaining term of this Agreement
at the date of Termination of the Executive's employment
("Termination Period") the Company shall maintain in full force
and effect for the continued benefit of the Executive all
employee welfare benefit plans and prerequisite programs in which
the Executive was entitled to participate immediately prior to
the Executive's termination or shall arrange to make available to
the Executive benefits substantially similar to those which the
Executive would otherwise have been entitled to receive if his
employment had not been terminated. Such benefits shall be
provided to the Executive on the same terms and conditions
(including employee contributions and premium payments) under
which the Executive was entitled to participate immediately prior
to the Executive's termination. Notwithstanding the foregoing for
the purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("Cobra") the Executive's "qualifying event" shall be
his date of termination from the Company. During the first thirty
days of the Termination Period, the Company shall provide to the
Executive at the Company's expense office space and staff support
similar to that provided immediately prior to termination.
v. Reduction of Termination Payments. In the event termination of
the
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Executive's employment is pursuant to the provisions of (P) 6-d,
then any amounts otherwise payable to the Executive pursuant to
the terms of (P) 7-a-ii shall be payable monthly during the
Termination Period and shall be subject to offset for any after
tax amounts received by the Executive pursuant to a plan
maintained by the Employer as described at (P) 5-f.
b. Voluntary Termination and Termination for Cause. In the event of the
termination of the Executive's employment pursuant to the provisions
of (P) 6-b or (P) 6-c, then the Executive shall be entitled to all
accrued but unpaid Base Pay including credit for unused vacation days
limited in accordance with (P) 5-b payable within 10 days of the date
of termination.
c. Termination Upon a Change in Control. In the event of the termination
of the Executive's employment pursuant to the provisions of (P) 6-e,
then all previously awarded options shall vest and become immediately
exercisable and all previously granted shares of stock shall be fully
vested with all restrictions on transfer of such shares removed and
the Executive shall be entitled to the following benefits and
termination payments:
i. Unpaid Amounts. All accrued but unpaid Base Pay including credit
for unused vacation days limited in accordance with (P) 5-b
payable within 10 days of the date of termination, plus
ii. Severance Payment. A severance payment, subject to the
limitations of (P) 7-c-iv payable within 10 days of the date of
termination which shall be the product of three (3) times the sum
of the Executive's Base Salary and Target Incentive Bonuses for
the year in which the Change in Control occurred.
iii. Benefits. For the balance of the remaining term of this Agreement
at the date of Termination of the Executive's employment
("Termination Period") the Company shall maintain in full force
and effect for the continued benefit of the Executive all
employee welfare benefit plans and prerequisite programs in which
the Executive was entitled to participate immediately prior to
the Executive's termination or shall arrange to make available to
the Executive benefits substantially similar to those which the
Executive would otherwise have been entitled to receive if his
employment had not been terminated. Such benefits shall be
provided to the Executive on the same terms and conditions
(including employee contributions and premium payments) under
which the Executive was entitled to participate immediately prior
to the Executive's termination. Notwithstanding the foregoing for
the purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("Cobra") the Executive's "qualifying event" shall be
his date of termination from the Company.
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During the first thirty days of the Termination Period, the
Company shall provide to the Executive at the Company's expense
office space and staff support similar to that provided
immediately prior to termination.
iv. Limitation on Severance Payment. In the event that the total
amount of the Severance Payment due to the Executive pursuant to
(P) 7-f-ii together with all other payments and the value of any
benefit received or to be received by the Executive in the
connection with termination upon a Change in Control constitutes
a "Parachute Payment" within the meaning of (S)280G(b)(2) of the
Internal Revenue Code of 1986, as amended ("IRC") and such
Parachute Payment would result in all or a portion of such
payments being subject to the excise tax imposed by (S) 4999 IRC
then the amount due to the Executive on termination after a
Change in Control shall be either the amount determined in
accordance with (P) 7-f-ii or such lesser amount which would not
result in any portion of the Severance Pay being subject to an
excise tax under (S)4999 IRC, whichever amount, taking into
account the applicable Federal, state and local income taxes and
the excise tax imposed by (S)4999 IRC results in the receipt by
the Executive, on an after-tax basis, of the greatest amount of
Severance Pay under this section, notwithstanding that all or
some portion of the Severance Pay may be subject to excise tax
under (S)4999 IRC.
8. Confidentiality and Nonsolicitation Agreement
a. Confidentiality. The Executive acknowledges that in the course of his
employment by the Company, he will or may have access to and become
informed of confidential and secret information which is a competitive
asset of the Company ("Confidential Information"), including , without
limitation, (i) the terms of any agreement between the Company and any
employee, customer, or supplier, (ii) pricing strategy, (iii)
merchandising and marketing methods, (iv) product ideas and
strategies, (v) personnel training and development programs, (vi)
financial results, (vii) strategic systems software, and (viii) any
non-public information concerning the Company, its employees,
suppliers or customers. The Executive agrees that he will keep all
Confidential Information in strict confidence during the term of his
employment by the Company and thereafter and will not directly or
indirectly make known, divulge, reveal, furnish, make available, or
use any Confidential Information (except in the course of his regular
authorized duties on behalf of the Company). The Executive agrees that
the obligations of confidentiality hereunder shall survive termination
of his employment at the Company regardless of any actual or alleged
breach by the Company of this Agreement and shall continue for two
years following such termination provided that such obligation shall
terminate earlier (i) as to specific information that shall have
become, through no fault of the Executive, generally known to the
public or (ii) as to the Confidential Information which the executive
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is required by law to disclose (after giving the Company notice and an
opportunity to contest such requirement). The Executive's obligation
under this (P) 8 are in addition to, and not in limitation or
preemption of , all other obligations of confidentiality which the
executive may have to the Company under general legal or equitable
principles.
b. Documents. Except in the ordinary course of the Company's business,
the Executive shall not at any time following the date of this
Agreement, make or cause to be made, any copies, pictures, duplicates,
facsimiles or other reproductions or recordings or any abstracts or
summaries including or reflecting Confidential Information. All such
documents and other property furnished to the Executive by the Company
or otherwise acquired or developed by the Company shall at all times
be the property of the Company. Upon termination of the Executive's
employment by the Company, the Executive will return to the Company
any such documents or other property of the Company which are in the
possession, custody or control of the Executive.
c. Nonsolicitation. In the event of the Executive's termination of
employment for any reason, the Executive agrees that he will not in
any capacity, on his own behalf or on behalf of any other firm, person
or entity, for a period of two years, solicit, or assist in the
solicitation of, any employee of the Company to terminate his or her
employment with the Company.
d. Injunctive Relief. The Executive acknowledges and agrees that a
violation of the foregoing provisions of this (P) 8 (referred to
collectively as the Confidentiality and Nonsolicitation Agreement)
that results in material detriment to the Company would cause harm to
the Company, and that the Company's remedy at law for any such
violation would be inadequate. In recognition of the foregoing, the
executive agrees that, in addition to any other relief afforded by law
or this Agreement, including damages sustained by a breach of this
Agreement and any other forfeitures under (P) 8, and without any
necessity or proof of actual damages, the Company shall have the right
to enforce this permanent injunction, it being the understanding of
the undersigned parties hereto that damages, the forfeitures described
above and injunctions shall all be proper models of relief and are not
to be considered as alternative remedies.
9. Covenant Not to Compete.
a. 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.
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b. For a period of one year after the expiration or termination of this
Agreement, except in the case of a termination upon a Change in
Control as set forth at (P) 6-e in which case the period shall be two
years, 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.
10. Miscellaneous.
a. Arbitration. Any dispute between the Executive and the Company under
this Agreement shall be resolved (except as provided below) through
arbitration by an arbitrator selected under the rules of the American
Arbitration Association and the arbitration shall be conducted in
Tampa, Florida under the rules of said association. Each party shall
each be entitled to present evidence and argument to the arbitrator.
The arbitrator shall have the right only to interpret and apply the
provisions of this Agreement and may not change any of its provisions.
The arbitrator shall permit reasonable pre-hearing discovery of facts,
to the extent necessary to establish a claim or a defense to a claim,
subject to supervision by the arbitrator. The determination of the
arbitrator shall be conclusive and binding upon the parties and
judgement upon the same may be entered in any court having
jurisdiction thereof. The arbitrator shall give written notice to the
parties stating his or their determination, and shall furnish to each
party a signed copy of such determination. Notwithstanding the
foregoing, the Company shall not be required to seek or participate in
arbitration regarding any breach of the Executive's Confidentiality
and Nonsolicitation Agreement contained in (P) 8, but may pursue its
remedies for such breach in a court of competent jurisdiction. The
party failing to substantially prevail in any proceeding arising out
of this Agreement shall bear the reasonable expenses of the other
including, but not limited to, preparation and attending the
proceeding, the reasonable attorney fees and allocable cost of in-
house counsel and any other expenses incurred by the other party. This
Agreement shall be governed and construed in accordance with the laws
of the State of Florida, excluding principles of conflict of laws.
b. Agreement. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
the subject matter hereof
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and contains all of the covenants and agreements between the parties
with respect to such subject matter. Prior to the Execution hereof the
Company shall have paid the Executive all salary, bonus, options and
stock grants due pursuant to prior agreements the receipt whereof is
acknowledged by the Executive. Each party to this Agreement
acknowledges that no representation, inducements, promises, or other
agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, pertaining to the subject matter
hereof, which are not embodies herein, and that no other agreement,
statement, or promise pertaining to the subject matter hereof that is
not contained in this Agreement shall be valid or binding on either
party.
c. No Obligation to Mitigate. After termination the Executive is under no
obligation to mitigate damages or the amount of any payment provided
for hereunder by seeking other employment or otherwise. The Executive
shall notify the Company within thirty (30) days after the
commencement of any such benefits.
d. Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes
as the Company is required to withhold pursuant to any law or
government regulation or ruling.
e. Post-termination Assistance. The Executive agrees that after his
employment with the Company has terminated he will provide, upon
reasonable notice from the Company, such information and assistance to
the Company as may reasonably requested by the Company in connection
with any litigation in which it or any of its affiliates is or may
become a party; provided, however, that the Company agrees to
reimburse the executive for any related expenses, including travel
expenses. Further, if requested by the Employer, the Employee agrees
to cooperate in training his successor following notice of termination
of this Agreement.
f. Successors and Binding Agreement.
i. This Agreement will be binding upon and inure to the benefit
reorganization or otherwise(and such successor shall thereafter
be deemed the "Company" for the purpose of this Agreement), but
will not otherwise be assignable, transferable or delegable by
the Company.
ii. This Agreement will inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, and legatees.
iii. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer
or delegate this Agreement.
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g. Notices. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests, or
approvals, required or permitted to be given hereunder will be in
writing and will be deemed to have been duly given when within five
days of posting by registered or certified United States mail, return
receipt requested, postage prepaid, addressed to the Company ( to the
attention of the Secretary of the Company) at its principal executive
office and to the Executive at his principal residence, or to such
other address as any party may have furnished to the other in writing
and in accordance herewith, except that notices of changes shall be
effective only upon receipt.
h. Validity. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement
and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the
extent (and only to the extent) necessary to make it enforceable,
valid or legal.
i. Modification. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto or compliance with any condition or provision of this Agreement
to be performed by such other party will be deemed a waiver of similar
or dissimilar provisions or conditions at that same or at any prior
subsequent time. Unless otherwise noted, references to "Sections" are
to sections of this Agreement. The captions used in this Agreement are
designed for convenient reference only and are not to be used for the
purpose of interpreting any provision of this Agreement.
j. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same agreement.
Date: _________________, 1998
Davel Communications Group, Inc. Employee
____________________________________ ___________________________
Robert Hill, Chief Executive Officer Michael E. Hayes
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EXHIBIT 10.16
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into effective the first
day of June, 1998 by and between Davel Communications Group, Inc. ("Company" or
"Employer") and Paul Demirdjian ("Executive" or "Employee").
WHEREAS, the Executive desires to serve as Chief Information Officer and
Senior Vice President of the Company; and
WHEREAS, the Company desires to employ the Executive as Chief Information
Officer and Senior Vice President of the Company upon the terms and conditions
specified in this Agreement and the Executive desires to serve as Chief
Information Officer and Senior Vice President upon the terms and conditions
specified in this Agreement; and
NOW WHEREFORE in consideration of the mutual covenants herein, the parties
state and agree as follows:
1. Employment. The Company hereby agrees to employee the Executive and the
Executive hereby agrees to remain in the employ of the Company upon the
terms and conditions herein set forth.
2. Term. Employment shall be for a term commencing on the effective date
hereof and, subject to termination as provided herein, expiring on December
31, 2000. Upon expiration, this Agreement shall renew for consecutive one
year terms unless either party gives the other party written notice of its
intent not to renew at least sixty days prior to the expiration of the
original or any successive or extended term.
3. Duties.
a. Assignments. 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. Best Efforts. The Employee shall devote his best efforts, on a full-
time basis, to the Employer's business, and will not engage in any
employment or enterprise detracting from this goal. Employee shall
travel as reasonably required in the performance of his duties
hereunder.
c. Reporting. The Employee as Chief Information Officer and Senior Vice
President, and in such other offices as from time to time assigned in
Davel or associated enterprises, shall perform the duties of Chief
Information Officer and Senior Vice President which shall consist of
the duties normally associated
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with such positions and such other duties as shall be from time to
time assigned. In the regular conduct of his duties the Employee shall
report to and be responsible to the Chief Executive Officer, or such
other officer of the Company, as the Chief Executive Officer may
direct.
d. Place of Performance. In connection with his employment by the
Company, the executive shall be based at the principal executive
offices of the Company which as of the date of this Agreement are in
Tampa, Florida or at such other location as the Chief Executive
Officer may specify.
4. Compensation.
a. Base Salary. During the term of this Agreement, the Company shall pay
to the Executive a base salary ("Base Pay") of not less than $190,000
per annum which Base Salary shall be reviewed annually by the Chief
Executive Officer and the Compensation Committee and may be increased,
or decreased (but not below the aforementioned amount) upon
recommendation of the Chief Executive Officer to the Compensation
Committee. Further, the Compensation Committee upon recommendation of
the Chief Executive Officer may in its sole discretion determine to
pay the Executive additional compensation in cash or property as may
be determined from time to time. Base Pay will be paid in accordance
with the normal payroll practices of the Company, but not less
frequently than monthly.
b. Incentive Bonus. The Executive shall be eligible for an annual
incentive bonus ("Incentive Bonus") of up to 60% of the Executive's
Base Pay ("Maximum Incentive Bonus") and is assigned a target
incentive bonus ("Target Incentive Bonus") of 30% of the Executive's
Base Pay for such year. The Executive's actual Incentive Bonus will be
paid within 90 days of the end of the Company's fiscal year computed
and determined by the Compensation Committee upon recommendation of
the Chief Executive Officer in respect of the Executive's performance
measured relative to Company, departmental and individual objectives
as follows:
i. Company Objectives. Up to 50% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
company objectives ("Company Objectives") which shall be
determined by reference to growth in earnings per share ("EPSG")
and growth in earnings before interest, taxes, depreciation and
amortization ("EBITDAG") of the Company.
(1) Up to 25% of the Executive's annual Maximum Incentive Bonus
shall be determined by reference to EPSG ("EPSG Objectives")
which shall be determined consistently with the manner in
which
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the Company reports such earnings for financial purposes
adjusted for extraordinary items and shall be determined as
a function of EPSG, computed as follows:
(a) If EPSG is less than 10%, there shall be no award of
the portion of any Incentive Bonus attributable to the
attainment of EPSG Objectives.
(b) If EPSG is 10% or more, but not greater than 20%, then
the portion of the Incentive Bonus awarded for
attainment of EPSG Objectives shall be computed in
accordance with the following formula: [EPSG * 5] * 25%
of the Target Incentive Bonus.
(c) If EPSG is more than 20%, but not greater than 25%,
then the portion of the Incentive Bonus awarded for
attainment of EPSG Objectives shall be computed in
accordance with the following formula: [EPSG *6] * 25%
of the Target Incentive Bonus.
(d) If EPSG is more than 25%, then the portion of the
Incentive Bonus awarded for attainment of EPSG
Objectives shall be not more than 15% of the
Executive's Base Pay and shall be computed in
accordance with the following formula: [EPSG * 6.66667]
* 25% of the Target Incentive Bonus.
(2) Up to 25% of the Executive's annual Maximum Incentive Bonus
shall be determined by reference to EBITDAG ("EBITDAG
Objectives") which shall be determined consistently with the
manner in which the Company reports earnings before
interest, taxes, depreciation and amortization for financial
purposes adjusted for extraordinary items and shall be
determined as a function of EBITDAG, computed as follows:
(a) If EBITDAG is less than 10%, there shall be no award of
the portion of any Incentive Bonus attributable to the
attainment of EBITDAG Objectives.
(b) If EBITDAG is 10% or more, but not greater than 20%,
then the portion of the Incentive Bonus awarded for
attainment of EBITDAG Objectives shall be computed in
accordance with the following formula: [EBITDAG * 5] *
25% of the Target Incentive Bonus.
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(c) If EBITDAG is more than 20%, but not greater than 25%,
then the portion of the Incentive Bonus awarded for
attainment of EBITDAG Objectives shall be computed in
accordance with the following formula: [EBITDAG *6] *
25% of the Target Incentive Bonus.
(d) If EBITDAG is more than 25%, then the portion of the
Incentive Bonus awarded for attainment of EBITDAG
Objectives shall be not more than 15% of the
Executive's Base Pay and shall be computed in
accordance with the following formula: [EBITDAG *
6.66667] * 25% of the Target Incentive Bonus
ii. Department Objectives. Up to 30% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
departmental objectives ("Departmental Objectives") which shall
be defined in a writing provided to the Executive by the Chief
Executive Officer after January 1st and prior to January 30th of
each year this Agreement is in effect except that in the year
the Executive executes this Agreement such writing shall be
provided within 60 days of the date of execution by the
Executive. Based upon the Chief Executive Officer's evaluation
of the Executive's attainment of the Departmental Objectives,
the Chief Executive Officer shall recommend to the Compensation
Committee an award of Incentive Bonus of up to 18% of the
Executive's Base Pay.
iii. Personal Objectives. Up to 20% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
personal objectives ("Personal Objectives") which shall be
defined in a writing provided to the Executive by the Chief
Executive Officer after January 1st and prior to January 30th of
each year this Agreement is in effect except that in the year
the Executive executes this Agreement such writing shall be
provided within 60 days of the date of execution by the
Executive. Based upon the Chief Executive Officer's evaluation
of the Executive's attainment of the Personal Objectives, the
Chief Executive Officer shall recommend to the Compensation
Committee an award of Incentive Bonus of up to 12% of the
Executive's Base Pay.
c. Stock Options. On or before March 31 of the year following each year
this contract is in effect the Executive shall be awarded a minimum of
5,000 options, or such greater number as shall be determined by the
Compensation Committee upon consideration of the recommendation of the
Chief Executive Officer. Said options shall have an exercise price not
to exceed the closing price of the
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Company's stock on the last date for which a closing price is
available prior to the date on which the Compensation Committee
approves such award and shall otherwise be issued subject to and in
accordance with the Company's Stock Option Plan.
5. Benefits.
a. 401K Plan. Employer has established a 401(k) Profit Sharing Plan to
provide for voluntary before and after tax contributions by the
employees of the Company. 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. The Executive may participate in such
plan provided he is otherwise qualified under the terms and conditions
of any such Profit Sharing Plan.
b. Vacation. The Executive shall receive 20 days of paid vacation per
year accruing at a rate of 1 2/3 vacation days per month. Any vacation
days accrued but not used in the calendar year earned shall carry over
for use in future years except in no event shall the Executive
accumulate more than 40 days of vacation time.
c. Cafeteria Plan. 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. Health Insurance. 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. Disability. The Employer shall maintain an executive disability plan
for the benefit of the Executive which shall provide a minimum benefit
of 50% of the Executive's base salary in the event of disability.
f. Automobile. The Employer shall provide an automobile to 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.
g. Expenses. The Company shall reimburse Employee for reasonable expenses
incurred in the performance of his duties hereunder upon presentation
of proper evidence thereof as required by Employer.
h. Moving Expenses. The Company shall pay reasonable moving expenses (as
determined by the Employer) to the Executive if the Employer requires
the
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Executive to be based at any office or location other than the current
Tampa, Florida headquarters which change of location would require the
Executive to commute a distance from his primary residence in excess
of the greater of 50 miles or 125 percent of the distance of such
commute prior to the change of location.
i. Other Benefits. The Executive shall be entitled to participate in such
other employee benefit and welfare plans as the Company may from time
to time establish subject to the terms, conditions and eligibility
requirements as the Company shall prescribe.
6. Termination.
a. Involuntary Termination. The Executive will be treated for the
purposes of this Agreement as having been involuntarily terminated
("Involuntary Termination") by the Company if his employment is
terminated under any of the following circumstances:
i. the Company has breached any material provision of this
Agreement and within 30 days after written notice thereof from
the Executive the Company fails to cure such breach; or
ii. at the expiration of the term of employment hereunder the
Company has notified the Executive pursuant to Paragraph 2 that
the Company intends not to renew the term of employment; or
iii. the Board of the Company gives the Executive notice of
termination pursuant to this paragraph (Paragraph 6-a-iii).
iv. the Executive is required to report directly to any officer of
the Company other than the Chief Executive Officer; or
v. if the Employer requires the Executive to be based at any
office or location other than the current Tampa, Florida
headquarters which change of location would require the
Executive to commute a distance from his primary residence in
excess of the greater of 50 miles or 125 percent of the
distance of such commute prior to the change of location.
b. Voluntary Termination. The Executive's employment shall be deemed to
have been voluntarily terminated if Executive's employment is
terminated in any of the following circumstances:
i. Upon sixty (60) days' written notice to the Company of the
Executive's intent to terminate this Agreement; or
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ii. The termination of the Executive's employment upon the death of
the Employee.
c. Termination for Cause. The Executive shall be deemed to have been
terminated for Cause if the employment of the Executive is terminated
by written notice in any of the following circumstances:
i. the willful and continued failure by the Executive to perform
substantially his duties hereunder (other than from any such
failure due to the Executive's Disability) which failure shall
continue for 30 days after notice for such substantial
performance is provided to the Executive specifying the manner
in which the Company believes the Executive has not
substantially performed; or
ii. the willful misconduct of the Executive which is materially
injurious to the Company either financially or otherwise; or
iii. the breach of the Confidentiality and Nonsolicitation
provisions of this Agreement set forth at Paragraph 8; or
iv. the Executive terminates his employment without giving the
notice required by Paragraph 6-b-i.
d. Termination for Disability. The Executive shall be deemed to have been
terminated for Disability if the employment of the Executive is
terminated for his incapacity due to physical or mental illness to
substantially perform his duties on a full-time basis for six (6)
consecutive months and, within thirty (30) days after a notice of
termination is thereafter given by the Company, the Executive shall
not have returned to the full-time performance of the Executive's
duties; provided, however, if the Executive shall not agree with a
determination to terminate him because of Disability, the question of
Executive's disability shall be subject to the certification of a
qualified medical doctor agreed to by the Company and the Executive
or, in the event of the Executive's incapacity to designate a doctor,
the Executive's legal representative. In the absence of agreement
between the Company and the Executive, each party shall nominate a
qualified medical doctor and the two doctors shall select a third
doctor, who shall make the determination as to Disability.
e. Termination Upon a Change of Control. The Executive shall be deemed to
have been terminated upon a "Change of Control" (as hereafter defined)
if a Change of Control occurs while the Executive is an employee of
the Company and within two years of such Change in Control either the
Company terminates the Executive for any reason except the death of
the Executive or the Executive elects to
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terminate his employment for any reason. A Change in Control shall
occur upon any person other than David Hill or his descendants or
Samstock, L.L.C. and its permitted transferees becoming the owner,
either directly or indirectly, of 25% or more of the combined voting
power of the Company's then outstanding securities.
7. Termination Benefits and Payments.
a. Involuntary Termination and Termination for Disability. In the event
of the termination of the Executive's employment pursuant to the
provisions of Paragraph 6-a or Paragraph 6-d then all previously
awarded options shall be fully vested and exercisable in accordance
with their terms when issued and all previously granted shares of
stock shall be fully vested and shall remain subject to such
restrictions on transfer in place as of the date of the Executive's
termination and the Executive shall be entitled to the following
benefits and termination payments:
i. Unpaid Amounts. All accrued but unpaid Base Pay including
credit for unused vacation days limited in accordance with
Paragraph 5-b payable within 10 days of the date of
termination, plus
ii. Base Pay. Payable within 10 days of the date of termination the
greater of one year's Base Pay or the remaining amount of Base
Pay due to the Executive through the end of the term hereof
both computed at the Executive's highest annualized rate of
Base Pay during the three year period prior to termination,
plus
iii. Bonus. Payable within 10 days of the date of termination the
greater of the Executive's Target Incentive Bonus or the
Executive's average, annualized Incentive Bonus, if any, during
the three year period prior to the Executive's termination,
plus
iv. Benefits. For the balance of the remaining term of this
Agreement at the date of Termination of the Executive's
employment ("Termination Period") the Company shall maintain in
full force and effect for the continued benefit of the
Executive all employee welfare benefit plans and prerequisite
programs in which the Executive was entitled to participate
immediately prior to the Executive's termination or shall
arrange to make available to the Executive benefits
substantially similar to those which the Executive would
otherwise have been entitled to receive if his employment had
not been terminated. Such benefits shall be provided to the
Executive on the same terms and conditions (including employee
contributions and premium payments) under which the Executive
was entitled to participate immediately prior to the
Executive's termination. Notwithstanding the foregoing for the
purposes of the Consolidated Omnibus Budget Reconciliation Act
of 1985 ("Cobra") the Executive's
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"qualifying event" shall be his date of termination from the
Company. During the first thirty days of the Termination
Period, the Company shall provide to the Executive at the
Company's expense office space and staff support similar to
that provided immediately prior to termination.
v. Reduction of Termination Payments. In the event termination of
the Executive's employment is pursuant to the provisions of
Paragraph 6-d, then any amounts otherwise payable to the
Executive pursuant to the terms of Paragraph 7-a-ii shall be
payable monthly during the Termination Period and shall be
subject to offset for any after tax amounts received by the
Executive pursuant to a plan maintained by the Employer as
described at Paragraph 5-f.
b. Voluntary Termination and Termination for Cause. In the event of the
termination of the Executive's employment pursuant to the provisions
of Paragraph 6-b or Paragraph 6-c, then the Executive shall be
entitled to all accrued but unpaid Base Pay including credit for
unused vacation days limited in accordance with Paragraph 5-b payable
within 10 days of the date of termination.
c. Termination Upon a Change in Control. In the event of the termination
of the Executive's employment pursuant to the provisions of Paragraph
6-e, then all previously awarded options shall vest and become
immediately exercisable and all previously granted shares of stock
shall be fully vested with all restrictions on transfer of such shares
removed and the Executive shall be entitled to the following benefits
and termination payments:
i. Unpaid Amounts. All accrued but unpaid Base Pay including
credit for unused vacation days limited in accordance with
Paragraph 5-b payable within 10 days of the date of
termination, plus
ii. Severance Payment. A severance payment, subject to the
limitations of Paragraph 7-c-iv payable within 10 days of the
date of termination which shall be the product of three (3)
times the sum of the Executive's Base Salary and Target
Incentive Bonuses for the year in which the Change in Control
occurred.
iii. Benefits. For the balance of the remaining term of this
Agreement at the date of Termination of the Executive's
employment ("Termination Period") the Company shall maintain in
full force and effect for the continued benefit of the
Executive all employee welfare benefit plans and prerequisite
programs in which the Executive was entitled to participate
immediately prior to the Executive's termination or shall
arrange to make available to the Executive benefits
substantially similar to those which the Executive would
otherwise have been entitled to receive if his employment had
not been terminated. Such benefits shall be provided to
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the Executive on the same terms and conditions (including
employee contributions and premium payments) under which the
Executive was entitled to participate immediately prior to the
Executive's termination. Notwithstanding the foregoing for the
purposes of the Consolidated Omnibus Budget Reconciliation Act of
1985 ("Cobra") the Executive's "qualifying event" shall be his
date of termination from the Company. During the first thirty
days of the Termination Period, the Company shall provide to the
Executive at the Company's expense office space and staff support
similar to that provided immediately prior to termination.
iv. Limitation on Severance Payment. In the event that the total
amount of the Severance Payment due to the Executive pursuant to
Paragraph 7-f-ii together with all other payments and the value
of any benefit received or to be received by the Executive in the
connection with termination upon a Change in Control constitutes
a "Parachute Payment" within the meaning of (S)280G(b)(2) of the
Internal Revenue Code of 1986, as amended ("IRC") and such
Parachute Payment would result in all or a portion of such
payments being subject to the excise tax imposed by (S) 4999 IRC
then the amount due to the Executive on termination after a
Change in Control shall be either the amount determined in
accordance with Paragraph 7-f-ii or such lesser amount which
would not result in any portion of the Severance Pay being
subject to an excise tax under (S)4999 IRC, whichever amount,
taking into account the applicable Federal, state and local
income taxes and the excise tax imposed by (S)4999 IRC results in
the receipt by the Executive, on an after-tax basis, of the
greatest amount of Severance Pay under this section,
notwithstanding that all or some portion of the Severance Pay may
be subject to excise tax under (S)4999 IRC.
8. Confidentiality and Nonsolicitation Agreement
a. Confidentiality. The Executive acknowledges that in the course of his
employment by the Company, he will or may have access to and become
informed of confidential and secret information which is a competitive
asset of the Company ("Confidential Information"), including, without
limitation, (i) the terms of any agreement between the Company and any
employee, customer, or supplier, (ii) pricing strategy, (iii)
merchandising and marketing methods, (iv) product ideas and
strategies, (v) personnel training and development programs, (vi)
financial results, (vii) strategic systems software, and (viii) any
non-public information concerning the Company, its employees,
suppliers or customers. The Executive agrees that he will keep all
Confidential Information in strict confidence during the term of his
employment by the Company and thereafter and will not directly or
indirectly make known, divulge, reveal, furnish, make available, or
use any Confidential Information (except in the course of his regular
authorized duties on behalf of the Company). The Executive agrees that
the
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obligations of confidentiality hereunder shall survive termination of
his employment at the Company regardless of any actual or alleged
breach by the Company of this Agreement and shall continue for two
years following such termination provided that such obligation shall
terminate earlier (i) as to specific information that shall have
become, through no fault of the Executive, generally known to the
public or (ii) as to the Confidential Information which the executive
is required by law to disclose (after giving the Company notice and an
opportunity to contest such requirement). The Executive's obligation
under this Paragraph 8 are in addition to, and not in limitation or
preemption of, all other obligations of confidentiality which the
executive may have to the Company, under general legal or equitable
principles.
b. Documents. Except in the ordinary course of the Company's business,
the Executive shall not at any time following the date of this
Agreement, make or cause to be made, any copies, pictures, duplicates,
facsimiles or other reproductions or recordings or any abstracts or
summaries including or reflecting Confidential Information. All such
documents and other property furnished to the Executive by the Company
or otherwise acquired or developed by the Company shall at all times
be the property of the Company. Upon termination of the Executive's
employment by the Company, the Executive will return to the Company
any such documents or other property of the Company which are in the
possession, custody or control of the Executive.
c. Nonsolicitation. In the event of the Executive's termination of
employment for any reason, the Executive agrees that he will not in
any capacity, on his own behalf or on behalf of any other firm, person
or entity, for a period of two years, solicit, or assist in the
solicitation of, any employee of the Company to terminate his or her
employment with the Company.
d. Injunctive Relief. The Executive acknowledges and agrees that a
violation of the foregoing provisions of this Paragraph 8 (referred to
collectively as the Confidentiality and Nonsolicitation Agreement)
that results in material detriment to the Company would cause harm to
the Company, and that the Company's remedy at law for any such
violation would be inadequate. In recognition of the foregoing, the
executive agrees that, in addition to any other relief afforded by law
or this Agreement, including damages sustained by a breach of this
Agreement and any other forfeitures under Paragraph 8, and without any
necessity or proof of actual damages, the Company shall have the right
to enforce this permanent injunction, it being the understanding of
the undersigned parties hereto that damages, the forfeitures described
above and injunctions shall all be proper models of relief and are not
to be considered as alternative remedies.
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9. Covenant Not to Compete.
a. 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.
b. For a period of one year after the expiration or termination of this
Agreement, except in the case of a termination upon a Change in
Control as set forth at Paragraph 6-e in which case the period shall
be two years, 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.
c. 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.
10. Miscellaneous.
a. Arbitration. Any dispute between the Executive and the Company under
this Agreement shall be resolved (except as provided below) through
arbitration by an arbitrator selected under the rules of the American
Arbitration Association and the arbitration shall be conducted in
Tampa, Florida under the rules of said association. Each party shall
each be entitled to present evidence and argument to the arbitrator.
The arbitrator shall have the right only to interpret and apply the
provisions of this Agreement and may not change any of its provisions.
The arbitrator shall permit reasonable pre-hearing discovery of facts,
to the extent necessary to establish a claim or a defense to a claim,
subject to supervision by the arbitrator. The determination of the
arbitrator shall be conclusive and binding upon the parties and
judgement upon the same may be entered in any court having
jurisdiction thereof. The arbitrator shall give written notice to the
parties stating his or their determination, and shall furnish to each
party a signed copy of such determination. Notwithstanding the
foregoing, the Company shall not be required to seek or participate in
arbitration regarding any breach of the Executive's Confidentiality
and Nonsolicitation Agreement contained in Paragraph 8, but may pursue
its remedies for such breach in a court of competent jurisdiction. The
party failing
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to substantially prevail in any proceeding arising out of this
Agreement shall bear the reasonable expenses of the other including,
but not limited to, preparation and attending the proceeding, the
reasonable attorney fees and allocable cost of in-house counsel and
any other expenses incurred by the other party. This Agreement shall
be governed and construed in accordance with the laws of the State of
Florida, excluding principles of conflict of laws.
b. Agreement. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
the subject matter hereof and contains all of the covenants and
agreements between the parties with respect to such subject matter.
Prior to the Execution hereof the Company shall have paid the
Executive all salary, bonus, options and stock grants due pursuant to
prior agreements the receipt whereof is acknowledged by the Executive.
Each party to this Agreement acknowledges that no representation,
inducements, promises, or other agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party,
pertaining to the subject matter hereof, which are not embodies
herein, and that no other agreement, statement, or promise pertaining
to the subject matter hereof that is not contained in this Agreement
shall be valid or binding on either party.
c. No Obligation to Mitigate. After termination the Executive is under no
obligation to mitigate damages or the amount of any payment provided
for hereunder by seeking other employment or otherwise. The Executive
shall notify the Company within thirty (30) days after the
commencement of any such benefits.
d. Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes
as the Company is required to withhold pursuant to any law or
government regulation or ruling.
e. Post-termination Assistance. The Executive agrees that after his
employment with the Company has terminated he will provide, upon
reasonable notice from the Company, such information and assistance to
the Company as may reasonably requested by the Company in connection
with any litigation in which it or any of its affiliates is or may
become a party; provided, however, that the Company agrees to
reimburse the executive for any related expenses, including travel
expenses. Further, if requested by the Employer, the Employee agrees
to cooperate in training his successor following notice of termination
of this Agreement.
f. Successors and Binding Agreement.
i. This Agreement will be binding upon and inure to the benefit
reorganization or otherwise (and such successor shall thereafter
be deemed the "Company" for the purpose of this Agreement), but
will not otherwise
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be assignable, transferable or delegable by the Company.
ii. This Agreement will inure to the benefit of and be enforceable
by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributes, and
legatees.
iii. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign,
transfer or delegate this Agreement.
g. Notices. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests, or
approvals, required or permitted to be given hereunder will be in
writing and will be deemed to have been duly given when within five
days of posting by registered or certified United States mail, return
receipt requested, postage prepaid, addressed to the Company (to the
attention of the Secretary of the Company) at its principal executive
office and to the Executive at his principal residence, or to such
other address as any party may have furnished to the other in writing
and in accordance herewith, except that notices of changes shall be
effective only upon receipt.
h. Validity. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement
and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the
extent (and only to the extent) necessary to make it enforceable,
valid or legal.
i. Modification. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto or compliance with any condition or provision of this Agreement
to be performed by such other party will be deemed a waiver of similar
or dissimilar provisions or conditions at that same or at any prior
subsequent time. Unless otherwise noted, references to "Sections" are
to sections of this Agreement. The captions used in this Agreement are
designed for convenient reference only and are not to be used for the
purpose of interpreting any provision of this Agreement.
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j. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same agreement.
Date: _________________, 1998
Davel Communications Group, Inc. Employee
- ------------------------------------ ----------------------------
Robert Hill, Chief Executive Officer Paul Demirdjian
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EXHIBIT 10.17
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into effective the first
day of June, 1998 by and between Davel Communications Group, Inc. ("Company" or
"Employer") and Marlin E. Turnipseed ("Executive" or "Employee").
WHEREAS, the Executive desires to serve as Director of Sales and Marketing
and Senior Vice President of the Company; and
WHEREAS, the Company desires to employ the Executive as Director of Sales
and Marketing and Senior Vice President of the Company upon the terms and
conditions specified in this Agreement and the Executive desires to serve as
Director of Sales and Marketing and Senior Vice President upon the terms and
conditions specified in this Agreement; and
NOW WHEREFORE in consideration of the mutual covenants herein, the parties
state and agree as follows:
1. Employment. The Company hereby agrees to employee the Executive and the
Executive hereby agrees to remain in the employ of the Company upon the
terms and conditions herein set forth.
2. Term. Employment shall be for a term commencing on the effective date
hereof and, subject to termination as provided herein, expiring on December
31, 2000. Upon expiration, this Agreement shall renew for consecutive one
year terms unless either party gives the other party written notice of its
intent not to renew at least sixty days prior to the expiration of the
original or any successive or extended term.
3. Duties.
a. Assignments. 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. Best Efforts. The Employee shall devote his best efforts, on a full-
time basis, to the Employer's business, and will not engage in any
employment or enterprise detracting from this goal. Employee shall
travel as reasonably required in the performance of his duties
hereunder.
c. Reporting. The Employee as Director of Sales and Marketing and Senior
Vice President, and in such other offices as from time to time
assigned in Davel or associated enterprises, shall perform the duties
of Director of Sales and Marketing and Senior Vice President which
shall consist of the duties normally associated
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with such positions and such other duties as shall be from time to
time assigned. In the regular conduct of his duties the Employee shall
report to and be responsible to the Chief Executive Officer, or such
other officer of the Company, as the Chief Executive Officer may
direct.
d. Place of Performance. In connection with his employment by the
Company, the executive shall be based at the principal executive
offices of the Company which as of the date of this Agreement are in
Tampa, Florida or at such other location as the Chief Executive
Officer may specify.
4. Compensation.
a. Base Salary. During the term of this Agreement, the Company shall pay
to the Executive a base salary ("Base Pay") of not less than $130,000
per annum which Base Salary shall be reviewed annually by the Chief
Executive Officer and the Compensation Committee and may be
increased, or decreased (but not below the aforementioned amount) upon
recommendation of the Chief Executive Officer to the Compensation
Committee. Further, the Compensation Committee upon recommendation of
the Chief Executive Officer may in its sole discretion determine to
pay the Executive additional compensation in cash or property as may
be determined from time to time. Base Pay will be paid in accordance
with the normal payroll practices of the Company, but not less
frequently than monthly.
b. Incentive Bonus. The Executive shall be eligible for an annual
incentive bonus ("Incentive Bonus") of up to 60% of the Executive's
Base Pay ("Maximum Incentive Bonus") and is assigned a target
incentive bonus ("Target Incentive Bonus") of 30% of the Executive's
Base Pay for such year. The Executive's actual Incentive Bonus will be
paid within 90 days of the end of the Company's fiscal year computed
and determined by the Compensation Committee upon recommendation of
the Chief Executive Officer in respect of the Executive's performance
measured relative to Company, departmental and individual objectives
as follows:
i. Company Objectives. Up to 50% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
company objectives ("Company Objectives") which shall be
determined by reference to growth in earnings per share ("EPSG")
and growth in earnings before interest, taxes, depreciation and
amortization ("EBITDAG") of the Company.
(1) Up to 25% of the Executive's annual Maximum Incentive Bonus
shall be determined by reference to EPSG ("EPSG Objectives")
which shall be determined consistently with the manner in
which
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the Company reports such earnings for financial purposes
adjusted for extraordinary items and shall be determined as
a function of EPSG, computed as follows:
(a) If EPSG is less than 10%, there shall be no award of
the portion of any Incentive Bonus attributable to the
attainment of EPSG Objectives.
(b) If EPSG is 10% or more, but not greater than 20%, then
the portion of the Incentive Bonus awarded for
attainment of EPSG Objectives shall be computed in
accordance with the following formula: [EPSG * 5] * 25%
of the Target Incentive Bonus.
(c) If EPSG is more than 20%, but not greater than 25%,
then the portion of the Incentive Bonus awarded for
attainment of EPSG Objectives shall be computed in
accordance with the following formula: [EPSG *6] * 25%
of the Target Incentive Bonus.
(d) If EPSG is more than 25%, then the portion of the
Incentive Bonus awarded for attainment of EPSG
Objectives shall be not more than 15% of the
Executive's Base Pay and shall be computed in
accordance with the following formula: [EPSG * 6.66667]
* 25% of the Target Incentive Bonus.
(2) Up to 25% of the Executive's annual Maximum Incentive Bonus
shall be determined by reference to EBITDAG ("EBITDAG
Objectives") which shall be determined consistently with the
manner in which the Company reports earnings before
interest, taxes, depreciation and amortization for financial
purposes adjusted for extraordinary items and shall be
determined as a function of EBITDAG, computed as follows:
(a) If EBITDAG is less than 10%, there shall be no award of
the portion of any Incentive Bonus attributable to the
attainment of EBITDAG Objectives.
(b) If EBITDAG is 10% or more, but not greater than 20%,
then the portion of the Incentive Bonus awarded for
attainment of EBITDAG Objectives shall be computed in
accordance with the following formula: [EBITDAG * 5] *
25% of the Target Incentive Bonus.
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(c) If EBITDAG is more than 20%, but not greater than 25%,
then the portion of the Incentive Bonus awarded for
attainment of EBITDAG Objectives shall be computed in
accordance with the following formula: [EBITDAG *6] *
25% of the Target Incentive Bonus.
(d) If EBITDAG is more than 25%, then the portion of the
Incentive Bonus awarded for attainment of EBITDAG
Objectives shall be not more than 15% of the
Executive's Base Pay and shall be computed in
accordance with the following formula: [EBITDAG *
6.66667] * 25% of the Target Incentive Bonus
ii. Department Objectives. Up to 30% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
departmental objectives ("Departmental Objectives") which shall
be defined in a writing provided to the Executive by the Chief
Executive Officer after January 1/st/ and prior to January 30/th/
of each year this Agreement is in effect except that in the year
the Executive executes this Agreement such writing shall be
provided within 60 days of the date of execution by the
Executive. Based upon the Chief Executive Officer's evaluation of
the Executive's attainment of the Departmental Objectives, the
Chief Executive Officer shall recommend to the Compensation
Committee an award of Incentive Bonus of up to 18% of the
Executive's Base Pay.
iii. Personal Objectives. Up to 20% of the Executive's Maximum
Incentive Bonus shall be awarded based upon the attainment of
personal objectives ("Personal Objectives") which shall be
defined in a writing provided to the Executive by the Chief
Executive Officer after January 1/st/ and prior to January 30/th/
of each year this Agreement is in effect except that in the year
the Executive executes this Agreement such writing shall be
provided within 60 days of the date of execution by the
Executive. Based upon the Chief Executive Officer's evaluation of
the Executive's attainment of the Personal Objectives, the Chief
Executive Officer shall recommend to the Compensation Committee
an award of Incentive Bonus of up to 12% of the Executive's Base
Pay.
c. Stock Options. On or before March 31 of the year following each year
this contract is in effect the Executive shall be awarded a minimum of
5,000 options, or such greater number as shall be determined by the
Compensation Committee upon consideration of the recommendation of the
Chief Executive Officer. Said options shall have an exercise price not
to exceed the closing price of the
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Company's stock on the last date for which a closing price is
available prior to the date on which the Compensation Committee
approves such award and shall otherwise be issued subject to and in
accordance with the Company's Stock Option Plan.
5. Benefits.
a. 401K Plan. Employer has established a 401(k) Profit Sharing Plan to
provide for voluntary before and after tax contributions by the
employees of the Company. 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. The Executive may participate in such
plan provided he is otherwise qualified under the terms and conditions
of any such Profit Sharing Plan.
b. Vacation. The Executive shall receive 20 days of paid vacation per
year accruing at a rate of 1 2/3 vacation days per month. Any vacation
days accrued but not used in the calendar year earned shall carry over
for use in future years except in no event shall the Executive
accumulate more than 40 days of vacation time.
c. Cafeteria Plan. 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. Health Insurance. 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. Disability. The Employer shall maintain an executive disability plan
for the benefit of the Executive which shall provide a minimum benefit
of 50% of the Executive's base salary in the event of disability.
f. Automobile. The Employer shall provide either a reasonable car
allowance as determined by the Employer or an automobile to 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.
g. Expenses. The Company shall reimburse Employee for reasonable expenses
incurred in the performance of his duties hereunder upon presentation
of proper evidence thereof as required by Employer.
h. Moving Expenses. The Company shall pay reasonable moving expenses (as
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determined by the Employer) to the Executive if the Employer requires
the Executive to be based at any office or location other than the
current Tampa, Florida headquarters which change of location would
require the Executive to commute a distance from his primary residence
in excess of the greater of 50 miles or 125 percent of the distance of
such commute prior to the change of location.
i. Other Benefits. The Executive shall be entitled to participate in such
other employee benefit and welfare plans as the Company may from time
to time establish subject to the terms, conditions and eligibility
requirements as the Company shall prescribe.
6. Termination.
a. Involuntary Termination. The Executive will be treated for the
purposes of this Agreement as having been involuntarily terminated
("Involuntary Termination") by the Company if his employment is
terminated under any of the following circumstances:
i. the Company has breached any material provision of this Agreement
and within 30 days after written notice thereof from the
Executive the Company fails to cure such breach; or
ii. at the expiration of the term of employment hereunder the Company
has notified the Executive pursuant to (P) 2 that the Company
intends not to renew the term of employment; or
iii. the Board of the Company gives the Executive notice of
termination pursuant to this paragraph ((P) 6-a-iii).
b. Voluntary Termination. The Executive's employment shall be deemed to
have been voluntarily terminated if Executive's employment is
terminated in any of the following circumstances:
i. Upon sixty (60) days' written notice to the Company of the
Executive's intent to terminate this Agreement; or
ii. The termination of the Executive's employment upon the death of
the Employee.
c. Termination for Cause. The Executive shall be deemed to have been
terminated for Cause if the employment of the Executive is terminated
by written notice in any of the following circumstances:
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i. the willful and continued failure by the Executive to perform
substantially his duties hereunder (other than from any such
failure due to the Executive's Disability) which failure shall
continue for 30 days after notice for such substantial
performance is provided to the Executive specifying the manner in
which the Company believes the Executive has not substantially
performed; or
ii. the willful misconduct of the Executive which is materially
injurious to the Company either financially or otherwise; or
iii. the breach of the Confidentiality and Nonsolicitation provisions
of this Agreement set forth at (P)8; or
iv. the Executive terminates his employment without giving the notice
required by (P)6-b-i.
d. Termination for Disability. The Executive shall be deemed to have been
terminated for Disability if the employment of the Executive is
terminated for his incapacity due to physical or mental illness to
substantially perform his duties on a full-time basis for six (6)
consecutive months and, within thirty (30) days after a notice of
termination is thereafter given by the Company, the Executive shall
not have returned to the full-time performance of the Executive's
duties; provided, however, if the Executive shall not agree with a
determination to terminate him because of Disability, the question of
Executive's disability shall be subject to the certification of a
qualified medical doctor agreed to by the Company and the Executive
or, in the event of the Executive's incapacity to designate a doctor,
the Executive's legal representative. In the absence of agreement
between the Company and the Executive, each party shall nominate a
qualified medical doctor and the two doctors shall select a third
doctor, who shall make the determination as to Disability.
e. Termination Upon a Change of Control. The Executive shall be deemed to
have been terminated upon a "Change of Control" (as hereafter defined)
if a Change of Control occurs while the Executive is an employee of
the Company and within two years of such Change in Control either the
Company terminates the Executive for any reason except the death of
the Executive or the Executive elects to terminate his employment for
any reason. A Change in Control shall occur upon any person other than
David Hill or his descendants or Samstock, L.L.C. and its permitted
transferees becoming the owner, either directly or indirectly, of 25%
or more of the combined voting power of the Company's then outstanding
securities.
7. Termination Benefits and Payments.
a. Involuntary Termination and Termination for Disability. In the event
of the
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termination of the Executive's employment pursuant to the provisions
of (P) 6-a or (P) 6-d then all previously awarded options shall be
fully vested and exercisable in accordance with their terms when
issued and all previously granted shares of stock shall be fully
vested and shall remain subject to such restrictions on transfer in
place as of the date of the Executive's termination and the Executive
shall be entitled to the following benefits and termination payments:
i. Unpaid Amounts. All accrued but unpaid Base Pay including credit
for unused vacation days limited in accordance with (P) 5-b
payable within 10 days of the date of termination, plus
ii. Base Pay. Payable within 10 days of the date of termination the
greater of one year's Base Pay or the remaining amount of Base
Pay due to the Executive through the end of the term hereof both
computed at the Executive's highest annualized rate of Base Pay
during the three year period prior to termination, plus
iii. Bonus. Payable within 10 days of the date of termination the
greater of the Executive's Target Incentive Bonus or the
Executive's average, annualized Incentive Bonus, if any, during
the three year period prior to the Executive's termination, plus
iv. Benefits. For the balance of the remaining term of this Agreement
at the date of Termination of the Executive's employment
("Termination Period") the Company shall maintain in full force
and effect for the continued benefit of the Executive all
employee welfare benefit plans and prerequisite programs in which
the Executive was entitled to participate immediately prior to
the Executive's termination or shall arrange to make available to
the Executive benefits substantially similar to those which the
Executive would otherwise have been entitled to receive if his
employment had not been terminated. Such benefits shall be
provided to the Executive on the same terms and conditions
(including employee contributions and premium payments) under
which the Executive was entitled to participate immediately prior
to the Executive's termination. Notwithstanding the foregoing for
the purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("Cobra") the Executive's "qualifying event" shall be
his date of termination from the Company. During the first thirty
days of the Termination Period, the Company shall provide to the
Executive at the Company's expense office space and staff support
similar to that provided immediately prior to termination.
v. Reduction of Termination Payments. In the event termination of
the Executive's employment is pursuant to the provisions of (P)
6-d, then any amounts otherwise payable to the Executive pursuant
to the terms of (P) 7-a-
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ii shall be payable monthly during the Termination Period and
shall be subject to offset for any after tax amounts received by
the Executive pursuant to a plan maintained by the Employer as
described at (P) 5-f.
b. Voluntary Termination and Termination for Cause. In the event of the
termination of the Executive's employment pursuant to the provisions
of (P) 6-b or (P) 6-c, then the Executive shall be entitled to all
accrued but unpaid Base Pay including credit for unused vacation days
limited in accordance with (P) 5-b payable within 10 days of the date
of termination.
c. Termination Upon a Change in Control. In the event of the termination
of the Executive's employment pursuant to the provisions of (P) 6-e,
then all previously awarded options shall vest and become immediately
exercisable and all previously granted shares of stock shall be fully
vested with all restrictions on transfer of such shares removed and
the Executive shall be entitled to the following benefits and
termination payments:
i. Unpaid Amounts. All accrued but unpaid Base Pay including credit
for unused vacation days limited in accordance with (P) 5-b
payable within 10 days of the date of termination, plus
ii. Severance Payment. A severance payment, subject to the
limitations of (P) 7-c-iv payable within 10 days of the date of
termination which shall be the product of three (3) times the sum
of the Executive's Base Salary and Target Incentive Bonuses for
the year in which the Change in Control occurred.
iii. Benefits. For the balance of the remaining term of this
Agreement at the date of Termination of the Executive's
employment ("Termination Period") the Company shall maintain in
full force and effect for the continued benefit of the Executive
all employee welfare benefit plans and prerequisite programs in
which the Executive was entitled to participate immediately prior
to the Executive's termination or shall arrange to make available
to the Executive benefits substantially similar to those which
the Executive would otherwise have been entitled to receive if
his employment had not been terminated. Such benefits shall be
provided to the Executive on the same terms and conditions
(including employee contributions and premium payments) under
which the Executive was entitled to participate immediately prior
to the Executive's termination. Notwithstanding the foregoing for
the purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("Cobra") the Executive's "qualifying event" shall be
his date of termination from the Company. During the first thirty
days of the Termination Period, the Company shall provide to the
Executive at the Company's expense office space and staff
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support similar to that provided immediately prior to
termination.
iv. Limitation on Severance Payment. In the event that the total
amount of the Severance Payment due to the Executive pursuant to
(P) 7-f-ii together with all other payments and the value of any
benefit received or to be received by the Executive in the
connection with termination upon a Change in Control constitutes
a "Parachute Payment" within the meaning of (S)280G(b)(2) of the
Internal Revenue Code of 1986, as amended ("IRC") and such
Parachute Payment would result in all or a portion of such
payments being subject to the excise tax imposed by (S) 4999 IRC
then the amount due to the Executive on termination after a
Change in Control shall be either the amount determined in
accordance with (P) 7-f-ii or such lesser amount which would not
result in any portion of the Severance Pay being subject to an
excise tax under (S)4999 IRC, whichever amount, taking into
account the applicable Federal, state and local income taxes and
the excise tax imposed by (S)4999 IRC results in the receipt by
the Executive, on an after-tax basis, of the greatest amount of
Severance Pay under this section, notwithstanding that all or
some portion of the Severance Pay may be subject to excise tax
under (S)4999 IRC.
8. Confidentiality and Nonsolicitation Agreement
a. Confidentiality. The Executive acknowledges that in the course of his
employment by the Company, he will or may have access to and become
informed of confidential and secret information which is a competitive
asset of the Company ("Confidential Information"), including, without
limitation, (i) the terms of any agreement between the Company and any
employee, customer, or supplier, (ii) pricing strategy, (iii)
merchandising and marketing methods, (iv) product ideas and
strategies, (v) personnel training and development programs, (vi)
financial results, (vii) strategic systems software, and (viii) any
non-public information concerning the Company, its employees,
suppliers or customers. The Executive agrees that he will keep all
Confidential Information in strict confidence during the term of his
employment by the Company and thereafter and will not directly or
indirectly make known, divulge, reveal, furnish, make available, or
use any Confidential Information (except in the course of his regular
authorized duties on behalf of the Company). The Executive agrees
that the obligations of confidentiality hereunder shall survive
termination of his employment at the Company regardless of any actual
or alleged breach by the Company of this Agreement and shall continue
for two years following such termination provided that such obligation
shall terminate earlier (i) as to specific information that shall have
become, through no fault of the Executive, generally known to the
public or (ii) as to the Confidential Information which the executive
is required by law to disclose (after giving the Company notice and an
opportunity to contest such requirement). The Executive's obligation
under this (P)
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8 are in addition to, and not in limitation or preemption of, all
other obligations of confidentiality which the executive may have to
the Company under general legal or equitable principles.
b. Documents. Except in the ordinary course of the Company's business,
the Executive shall not at any time following the date of this
Agreement, make or cause to be made, any copies, pictures, duplicates,
facsimiles or other reproductions or recordings or any abstracts or
summaries including or reflecting Confidential Information. All such
documents and other property furnished to the Executive by the Company
or otherwise acquired or developed by the Company shall at all times
be the property of the Company. Upon termination of the Executive's
employment by the Company, the Executive will return to the Company
any such documents or other property of the Company which are in the
possession, custody or control of the Executive.
c. Nonsolicitation. In the event of the Executive's termination of
employment for any reason, the Executive agrees that he will not in
any capacity, on his own behalf or on behalf of any other firm, person
or entity, for a period of two years, solicit, or assist in the
solicitation of, any employee of the Company to terminate his or her
employment with the Company.
d. Injunctive Relief. The Executive acknowledges and agrees that a
violation of the foregoing provisions of this (P) 8 (referred to
collectively as the Confidentiality and Nonsolicitation Agreement)
that results in material detriment to the Company would cause harm to
the Company, and that the Company's remedy at law for any such
violation would be inadequate. In recognition of the foregoing, the
executive agrees that, in addition to any other relief afforded by law
or this Agreement, including damages sustained by a breach of this
Agreement and any other forfeitures under (P) 8, and without any
necessity or proof of actual damages, the Company shall have the right
to enforce this permanent injunction, it being the understanding of
the undersigned parties hereto that damages, the forfeitures described
above and injunctions shall all be proper models of relief and are not
to be considered as alternative remedies.
9. Covenant Not to Compete.
a. 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.
b. For a period of one year after the expiration or termination of this
Agreement, except in the case of a termination upon a Change in
Control as set forth at (P) 6-e
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in which case the period shall be two years, 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.
10. Miscellaneous.
a. Arbitration. Any dispute between the Executive and the Company under
this Agreement shall be resolved (except as provided below) through
arbitration by an arbitrator selected under the rules of the American
Arbitration Association and the arbitration shall be conducted in
Tampa, Florida under the rules of said association. Each party shall
each be entitled to present evidence and argument to the arbitrator.
The arbitrator shall have the right only to interpret and apply the
provisions of this Agreement and may not change any of its provisions.
The arbitrator shall permit reasonable pre-hearing discovery of facts,
to the extent necessary to establish a claim or a defense to a claim,
subject to supervision by the arbitrator. The determination of the
arbitrator shall be conclusive and binding upon the parties and
judgement upon the same may be entered in any court having
jurisdiction thereof. The arbitrator shall give written notice to the
parties stating his or their determination, and shall furnish to each
party a signed copy of such determination. Notwithstanding the
foregoing, the Company shall not be required to seek or participate in
arbitration regarding any breach of the Executive's Confidentiality
and Nonsolicitation Agreement contained in (P) 8, but may pursue its
remedies for such breach in a court of competent jurisdiction. The
party failing to substantially prevail in any proceeding arising out
of this Agreement shall bear the reasonable expenses of the other
including, but not limited to, preparation and attending the
proceeding, the reasonable attorney fees and allocable cost of in-
house counsel and any other expenses incurred by the other party. This
Agreement shall be governed and construed in accordance with the laws
of the State of Florida, excluding principles of conflict of laws.
b. Agreement. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
the subject matter hereof and contains all of the covenants and
agreements between the parties with respect to such subject matter.
Prior to the Execution hereof the Company shall have paid
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the Executive all salary, bonus, options and stock grants due pursuant
to prior agreements the receipt whereof is acknowledged by the
Executive. Each party to this Agreement acknowledges that no
representation, inducements, promises, or other agreements, orally or
otherwise, have been made by any party, or anyone acting on behalf of
any party, pertaining to the subject matter hereof, which are not
embodies herein, and that no other agreement, statement, or promise
pertaining to the subject matter hereof that is not contained in this
Agreement shall be valid or binding on either party.
c. No Obligation to Mitigate. After termination the Executive is under
no obligation to mitigate damages or the amount of any payment
provided for hereunder by seeking other employment or otherwise. The
Executive shall notify the Company within thirty (30) days after the
commencement of any such benefits.
d. Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes
as the Company is required to withhold pursuant to any law or
government regulation or ruling.
e. Post-termination Assistance. The Executive agrees that after his
employment with the Company has terminated he will provide, upon
reasonable notice from the Company, such information and assistance to
the Company as may reasonably requested by the Company in connection
with any litigation in which it or any of its affiliates is or may
become a party; provided, however, that the Company agrees to
reimburse the executive for any related expenses, including travel
expenses. Further, if requested by the Employer, the Employee agrees
to cooperate in training his successor following notice of termination
of this Agreement.
f. Successors and Binding Agreement.
i. This Agreement will be binding upon and inure to the benefit
reorganization or otherwise(and such successor shall thereafter
be deemed the "Company" for the purpose of this Agreement), but
will not otherwise be assignable, transferable or delegable by
the Company.
ii. This Agreement will inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, and legatees.
iii. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer
or delegate this Agreement.
g. Notices. For all purposes of this Agreement, all communications,
including
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without limitation notices, consents, requests, or approvals, required
or permitted to be given hereunder will be in writing and will be
deemed to have been duly given when within five days of posting by
registered or certified United States mail, return receipt requested,
postage prepaid, addressed to the Company (to the attention of the
Secretary of the Company) at its principal executive office and to the
Executive at his principal residence, or to such other address as any
party may have furnished to the other in writing and in accordance
herewith, except that notices of changes shall be effective only upon
receipt.
h. Validity. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement
and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the
extent (and only to the extent) necessary to make it enforceable,
valid or legal.
i. Modification. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto or compliance with any condition or provision of this Agreement
to be performed by such other party will be deemed a waiver of similar
or dissimilar provisions or conditions at that same or at any prior
subsequent time. Unless otherwise noted, references to "Sections" are
to sections of this Agreement. The captions used in this Agreement are
designed for convenient reference only and are not to be used for the
purpose of interpreting any provision of this Agreement.
j. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same agreement.
Date: _________________, 1998
Davel Communications Group, Inc. Employee
____________________________________ __________________________________
Robert Hill, Chief Executive Officer Marlin E. Turnipseed
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EXHIBIT 10.18
THIRD AMENDMENT
to
CREDIT AGREEMENT
among
NATIONSBANK, N.A.,
as "Administrative Agent",
SUNTRUST BANK, TAMPA BAY, as Documentation Agent,
LASALLE NATIONAL BANK, as Co-Agent,
and
NATIONSBANK, N.A., SUNTRUST BANK, TAMPA BAY, AND LASALLE
NATIONAL BANK
and
THE OTHER LENDERS LISTED ON THE SIGNATURE PAGES HEREOF,
as "Lenders"
and
DAVEL COMMUNICATIONS GROUP, INC.
as "Borrower"
This THIRD AMENDMENT to CREDIT AGREEMENT (this "Amendment") is entered into
as of July 3, 1998, by and among DAVEL COMMUNICATIONS GROUP, INC., an Illinois
corporation ("Borrower"), NATIONSBANK, N.A. ("NationsBank"), as administrative
agent ("Administrative Agent"), SunTrust Bank, Tampa Bay, as Documentation
Agent, LaSalle National Bank, as Co-Agent, and the Lenders.
Recitals:
A. Borrower and Lenders are party to that certain Credit Agreement effective
as of February 3, 1998, as amended by that certain Amendment to Credit
Agreement dated as of March 5, 1998 and as further amended by that certain
Second Amendment to Credit Agreement dated as of May 14, 1998 and effective
as of February 3, 1998 (the "Original Loan Agreement").
B. Borrower has requested that Lenders agree to temporarily revise the
Borrowing Base provisions of the Original Loan Agreement. Lenders have
agreed to do so on the terms and conditions contained herein.
Amendment
Therefore, in consideration of the mutual agreements herein and other sufficient
consideration, the receipt of which is hereby acknowledged, Borrower and Lenders
hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein have the meanings given
them in the Loan Agreement. All references to the "Agreement" or the "Loan
Agreement" in the Original Loan Agreement and in this Amendment shall be deemed
to be references to the Original Loan Agreement as it is amended hereby and as
it may be further amended, restated, extended, renewed, replaced, or otherwise
modified from time to time. Each reference in the Loan Agreement to "the
Agreement",
<PAGE>
"hereunder", "hereof", "herein", or words of like import, shall be read as
referring to the Loan Agreement as amended by this Amendment.
2. Conditions to Effectiveness of Amendment.
This Amendment shall be deemed to be effective as of July 3, 1998, (the
"Amendment Effective Date"), but only if this Amendment has been executed by
Borrower and the Required Lenders.
3. Amendments to Original Loan Agreement.
The Original Loan Agreement is hereby amended as follows:
3.1. Limitation on Revolving Loan Advances.
Section 3.1.2 of the Original Loan Agreement is hereby amended by inserting
the following sentence at the end of Section 3.1.2: "Notwithstanding the
foregoing, until November 1, 1998, for purposes of calculating the Maximum
Available Amount pursuant to this Section 3.1.2, the Borrowing Base shall
be deemed to be $15,000,000."
4. Representations and Warranties of Borrower. Borrower hereby represents and
warrants to Administrative Agent and Lenders as of the date hereof that (i) this
Amendment has been duly authorized by Borrower's Board of Directors, (ii) since
the date Borrower last delivered to Administrative Agent copies of Borrower's
Articles of Incorporation and Bylaws, Borrower's Articles of Incorporation and
Bylaws have not been amended, restated or otherwise modified, (iii) no consents
are necessary from any third Person for Borrower's execution, delivery or
performance of this Amendment which have not been obtained, (iv) this Amendment
constitutes the legal, valid and binding obligation of Borrower enforceable
against Borrower in accordance with its terms except as the enforcement thereof
may be limited by bankruptcy, insolvency or other laws related to creditors
rights generally or by the application of equity principles, (v) except as set
forth in the Disclosure Schedule attached to the Loan Agreement, as supplemented
by the disclosure schedule attached to this Amendment as Exhibit A, the
representations and warranties in the Loan Agreement were true and correct when
made and are true and correct as of the date hereof, and (vi) there exists no
Default or Event of Default under the Loan Agreement, as amended by this
Amendment.
5. Effect of Amendment.
The execution, delivery and effectiveness of this Amendment shall not operate as
a waiver of any right, power or remedy of Administrative Agent or Lenders under
the Loan Agreement or any of the other Loan Documents, nor constitute a waiver
of any provision of the Loan Agreement, any of the other Loan Documents or any
existing Default or Event of Default, nor act as a release or subordination of
the Security Interests of Administrative Agent or Lenders under the Security
Documents.
6. Reaffirmation.
Borrower hereby acknowledges and confirms that (a) the Loan Agreement and other
Loan Documents remain in full force and effect, (b) Borrower has no defenses to
its obligations under the Loan Agreement and the other Loan Documents, (c) the
Security Interests of Administrative Agent under the Security Documents continue
in full force and effect and have the same priority as before this Amendment,
and (d) Borrower has no claim against Administrative Agent or the Lenders
arising from or in connection with the Loan Agreement or the other Loan
Documents.
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<PAGE>
7. Governing Law.
This Amendment has been executed and delivered in St. Louis, Missouri, and shall
be governed by and construed under the laws of the State of Missouri without
giving effect to choice or conflicts of law principles thereunder.
8. Section Titles.
The section titles in this Amendment are for convenience of reference only and
shall not be construed so as to modify any provisions of this Amendment.
9. Counterparts; Facsimile Transmissions.
This Amendment may be executed in one or more counterparts and on separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures to this
Amendment may be given by facsimile or other electronic transmission, and such
signatures shall be fully binding on the party sending the same.
10. Incorporation By Reference.
Lenders and Borrower hereby agree that all of the terms of the Loan Documents
are incorporated in and made a part of this Amendment by this reference.
11. Statutory Notice.
The following notice is given pursuant to Section 432.045 of the Missouri
Revised Statutes; nothing contained in such notice will be deemed to limit or
modify the terms of the Loan Documents or this Amendment:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER(S)) AND US (LENDER(S)) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
BORROWER AND LENDERS HEREBY AFFIRM THAT THERE IS NO UNWRITTEN ORAL CREDIT
AGREEMENT BETWEEN BORROWER AND LENDERS WITH RESPECT TO THE SUBJECT MATTER OF
THIS AMENDMENT.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
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<PAGE>
Davel Communications Group, Inc. NationsBank, N.A., as Administrative
by its __________________________ Agent and a Lender
by its ______________________________
Name: _________________________________ Name: _________________________________
Notice Address: Notice Address:
601 West Morgan Street 800 Market Street
Jacksonville, IL 62651 St. Louis, MO 63101
Attn: Michael E. Hayes or Theodore C. Attn: Eric A. Gudmestad
Rammelkamp
FAX # (217) 243-6016 FAX # (314) 466-6499
TEL # (217) 243-4391 TEL # (314) 466-6456
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<PAGE>
LaSalle National Bank, as Co- SunTrust Bank, Tampa Bay, as
Agent and a Lender Documentation Agent and a Lender
By its __________________________ by its __________________________
Name: _______________________________ Name: ________________________________
Notice Address: Notice Address:
211 North Broadway, Suite 2140 401 East Jackson Street
St. Louis, MO 63102 Corporate Banking, 20/th/ Floor
Attn: Andrew K. Dawson Tampa Bay, FL 33601
Attn: Jason Lloyd
FAX # (314) 621-1612 FAX # (813) 224-2283
TEL # (314) 621-5303 TEL # (813) 224-2502
The First National Bank of Chicago
by its ______________________________
Banque Paribas
by its __________________________ Name: ________________________________
Name: _______________________________ Notice Address:
Notice Address: One First National Plaza, Suite 0629
Chicago, IL 60670-0629
787 Seventh Avenue Attn: Richard R. Howard or Michael Phelan
New York, NY 10019
Attn: Salo Aizenberg FAX # 312-732-8587
TEL # 312-732-3179
FAX # 212-841-2369
TEL # 212-841-2119
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<PAGE>
BankBoston Bank One, Illinois, National Association
by its __________________________ by its ______________________________
Name: _______________________________ Name: _________________________________
Notice Address: Notice Address:
100 Federal St. One East Old State Capitol Plaza
MC:01-08-08 Springfield, IL 62701
Boston, MA 02110 Attn: Anthony G. Nestler
Attn: Jonathan Sharkey
FAX # 617-434-3401 FAX # 217-522-7482
TEL # 617-434-5603 TEL # 217-525-9776
Creditanstalt Corporate Finance, Inc.
by its __________________________
Name: _______________________________
by its __________________________
Name: _______________________________
Notice Address:
Two Ravinia Drive, Suite 1680
Atlanta, GA 30346
Attn: Ruthanna McAlister
FAX # 770-390-1851
TEL # 770-390-1850
STATE OF ______________ )
) SS.
COUNTY OF _____________ )
On this ____ day of _________________, 1998, before me appeared
_______________________, to me personally known, who, being by me duly sworn did
say that he is the ________________________ of Davel Communications Group, Inc.,
and acknowledged that the foregoing instrument was signed in behalf of said
corporation by authority of its Board of Directors; and said
________________________ acknowledged said instrument to be the free act and
deed of said corporation.
6
<PAGE>
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal in the County and State aforesaid the day and year first above
written.
______________________________________
(Seal) Notary Public
<PAGE>
Exhibit A
SUPPLEMENTAL DISCLOSURE SCHEDULE
No disclosures, if none listed
