Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between
Xxxxxx X. Xxxxxx (the "Executive") and Global Signal Services LLC (the
"Company") on April 5, 2006.
WHEREAS, the Company desires to provide for the service and employment
of the Executive with the Company and the Executive wishes to perform services
for the Company, all in accordance with the terms and conditions provided
herein; and
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the Executive and the Company hereby agree as follows:
Section 1. EMPLOYMENT. During the Term (as defined in Section 2
below), the Company does hereby employ the Executive and the Executive does
hereby accept employment as Chief Financial Officer of the Company. The
Executive shall have all the duties, responsibilities and authority normally
performed by a chief financial officer and shall render services consistent
with such positions. The Executive shall report to the Company's Chief
Executive Officer. The Executive agrees to devote all of his working time and
efforts to the business and affairs of the Company, the Company's parent,
Global Signal Inc. ("GSL"), and their respective subsidiaries, subject to
periods of vacation and sick leave to which he is entitled, and shall not
engage in activities that substantially interfere with such performance.
Section 2. TERM OF AGREEMENT. The term of this Agreement (the "Initial
Term") shall commence on the date hereof (the "Commencement Date) and shall end
on the fourth anniversary of the Commencement Date, unless terminated pursuant
to Section 4(g) below. At the end of the Initial Term, the Executive's
employment pursuant to this Agreement shall be extended automatically for
successive one (1) year terms of employment, unless the Company or the
Executive notifies the other party at least thirty (30) days prior to the end
of the Initial Term or any later Term of an intention not to renew this
Agreement, in which case this Agreement will terminate at the end of such Term.
All references to "Term" shall refer to both such Initial Term and any such
successive Terms. For the sake of clarity, the failure to renew by Company is
not deemed termination without cause and Section 4(g) does not apply.
Section 3. LOCATION. In connection with the Executive's employment by
the Company, the Executive shall be based at the Company's headquarters,
currently located in Sarasota, Florida, except for required travel for the
Company's business.
Section 4. COMPENSATION.
(a) BASE SALARY. Effective as of the Commencement Date, for
all services rendered by the Executive hereunder, the Company shall pay the
Executive a base salary ("Base Salary") at an initial rate of $300,000 per
year, but in no event shall the Base Salary be reduced without the Executive's
approval. The Base Salary is payable on a bi-weekly basis or on such other
schedule as the Company may employ from time to time.
(b) CASH BONUS. The Executive shall have the opportunity to
earn a discretionary cash bonus in respect of each calendar year in which the
Executive is employed by the Company, subject to the terms and conditions of
the cash bonus policy of the Company;
provided, however that the Executive's target discretionary bonus shall be
between fifty percent (50%) and one hundred percent (100%) of Base Salary
during each calendar year of the Executive's employment, as determined by the
Board of Directors of GSL or its designee (the "Board of Directors"); provided,
further, however, that Executive shall receive a guaranteed bonus of three
hundred thousand dollars ($300,000) in respect of 2006. In order to be eligible
for any cash bonus, Executive must be an active employee at, and not have given
or received notice of termination prior to, the time of the cash bonus payment.
Cash bonus payments shall be made to the Executive within a reasonable time
after the end of the fiscal year in respect of which they are granted, but in
no event later than two months following the last day of the fiscal year for
which such bonus was granted. The Company's discretionary cash bonus policy
takes into account the success of the Company as a whole as well as the
contribution of each individual to that success; payment of additional
compensation or a bonus in or in respect of any given fiscal or calendar year,
including any discretionary equity bonus as described below, does not entitle
the Executive to additional compensation or a bonus in or in respect of any
subsequent year.
(c) EQUITY PARTICIPATION.
(i) The Executive shall be eligible in respect of each
calendar year in which the Executive is employed by the Company for a
discretionary bonus in the form of an equity award, subject to the
terms and conditions of the Company's equity bonus policy in effect at
the time of grant of any such bonus; provided, however that the
Executive's target discretionary equity bonus shall be equal in value
to between fifty percent (50%) and one hundred percent (100%) of Base
Salary during each calendar year of the Executive's employment, as
determined by the Board of Directors. In order to be eligible for any
discretionary equity bonus, Executive must be an active employee at,
and not have given or received notice of termination prior to, the
time of the bonus award. Equity bonuses awarded to the Executive shall
be in the form of an indexed deferred shares award with a base value
(based on the fair market value of the common stock of GSL (the
"Common Stock") equal to the amount of bonus being awarded, pursuant
to an agreement substantially in the form attached as Appendix A (the
"Deferred Shares Award"), pursuant to the terms and conditions of the
Global Signal Inc. Omnibus Stock Incentive Plan (the "Plan"). The
number of shares of Common Stock issuable pursuant to the Deferred
Shares Award shall be based on GSL's annualized dividend declared in
respect of the fourth quarter of the calendar year following the year
in respect of which such award is made (the "Q4 Dividend Run Rate").
One third of the shares subject to the Deferred Shares Award that are
payable based upon the Q4 Dividend Run Rate shall vest and become
payable on December 31 of each of the first, second and third years
following the year in respect of which such award is made, subject to
the Executive's continued employment as of each vesting date; provided
that in the event of Executive's employment is terminated without
Cause within twelve months of a Change of Control (as defined in the
Plan), the unvested portion of the Deferred Shares Award, if any,
shall vest in full. The Executive shall not have any rights of a
shareholder, including the right to vote and receive cash dividends,
with respect to any shares of Common Stock under any Deferred Shares
Award until the shares thereunder vest and are issued, provided,
however, that, subject to the Executive's continued employment as of
each record date, the Executive shall be entitled to receive a cash
payment (less applicable withholding) equal to the amount of any
dividends paid on the Common Stock on any unvested shares covered by
the Deferred Shares Award.
(ii) Effective as of the commencement of Executive's
employment, the Board of Directors of GSL shall grant the Executive a
one time initial award of restricted shares covering 120,000 shares of
Common Stock, in the form attached as Appendix B (the "Restricted
Stock") pursuant to the terms and conditions of the Plan. Twenty
percent (20%) of the shares subject to the Restricted Stock shall be
immediately vested upon commencement of Executive's employment and the
remaining eighty percent (80%) of the shares subject to the Restricted
Stock shall vest in four equal annual installments beginning December
31, 2007, so that one hundred percent (100%) of the shares subject to
the Restricted Stock shall become fully vested on December 31, 2010,
subject to the Executive's continued employment as of each vesting
date; provided that in the event of a Change of Control (as defined in
the Plan), the unvested portion of the Restricted Stock, if any, shall
vest in full. The Executive shall have all the rights of a shareholder
of GSL, including the right to vote and receive cash dividends, with
respect to the Restricted Stock (regardless of whether the underlying
shares have vested).
(d) FRINGE BENEFITS. The Executive shall be entitled to
participate in each fringe, welfare and pension benefit and incentive program
adopted from time to time by the Company for the benefit of, and which
generally apply to, its senior executive officers from time to time, including
medical and dental plans, disability insurance, 40 1(k) plans or other
retirement benefits provided to employees generally, subject to the terms of
such plans, as the same may be amended or even eliminated from time to time.
(e) PAID TIME OFF. The Executive will be entitled to twenty
(20) days of paid time off per year in accordance with the Company's paid time
off policy applicable to employees, as amended from time to time.
(f) REIMBURSEMENT OF EXPENSES. The Company shall reimburse
the Executive for all reasonable expenses which are incurred by him in the
course of performing his duties and which are consistent with the Company's
policies in effect from time to time with respect to travel, entertainment and
other business expenses, subject to the Company's requirements with respect to
reporting and documentation of such expenses.
(g) SEVERANCE. Upon termination by the Company of the
Executive's employment with the Company for any reason other than for Cause (as
defined below), or upon termination by the Executive of his employment with the
Company for Good Reason (as defined below) within thirty (30) days of the
occurrence of the circumstances giving rise to such Good Reason, then (i) the
Executive shall be entitled to receive payment of any accrued and owing Base
Salary for the applicable period, (ii) a lump sum payment equal to one year's
Base Salary at its then current rate, (iii) the Executive shall vest as to an
additional twenty percent (20%) of the shares subject to the Restricted Stock
award and (iv) the Executive shall vest as to such additional portion of the
shares subject to any then outstanding Deferred Shares Awards as is provided in
the applicable Deferred Share Award agreements. Except for indemnification
obligations under applicable indemnification agreements (including
indemnification obligations contained in the Company charter and by-laws) and
insurance policies, and vested rights in benefit plans of the Company, if any,
the Company shall have no obligation to the Executive in the case of any such
termination except as set forth in this Section 4(g). Payment of any severance
and the Executive's entitlement to any vesting acceleration are conditioned
upon (A) the Executive signing a separation agreement prepared by the Company
which includes a general release of claims and (B) the Executive's compliance
with the restrictive covenants set forth in the Non-Compete, Non-Solicitation
and Confidentiality Agreement between the Executive and GSL, effective as of
April 5, 2006, attached hereto as Appendix C (the "Non-Compete, Non-Solicitation
and Confidentiality Agreement"). For the sake of clarity, (i) the severance
payment provided for herein shall be in lieu of any amount to which the
Executive would be entitled under the Company's severance policy, if any, in
effect at the time of the termination and (ii) termination of employment by
reason of death or disability is not a termination by the Company for a reason
other than Cause and in such case the Company shall have no obligations to
Executive under such circumstances other than the obligation to pay accrued and
unpaid salary. In the event the Executive becomes entitled to any payments of
severance and the Executive is a "specified employee" within the meaning of
Section 409A(a)(2)(B)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"), the payment of such severance shall be delayed in accordance with the
provisions of such section to the extent necessary or appropriate to avoid
adverse tax consequences under Section 409A of the Code.
"Cause" means (i) any fraud, embezzlement, misappropriation of assets or
intentional misapplication of funds committed by the Executive in connection
with the Company's, GSL's or their subsidiaries' business or any other act of
dishonesty committed by Executive in connection with such business which is
reasonably likely to adversely impact the Company's business or the Company's
business reputation; (ii) the Executive's indictment or conviction of a crime
involving moral turpitude; (iii) the Executive's non-performance or
non-observance in any material respect of any material requirement with respect
to the Executive's employment hereunder; or (iv) any other action by the
Executive involving willful and deliberate malfeasance or negligence in the
performance of his duties hereunder, provided that the determination of cause
shall be made by the Board. "Good Reason" shall mean the occurrence, without
the express prior written consent of the Executive, of any of the following
circumstances, unless such circumstances are fully corrected by the Company
within thirty (30) days following written notification by the Executive (which
written notice must be delivered within thirty (30) days of the Executive's
becoming aware of the occurrence of such circumstances) that he intends to
terminate his employment for one of the reasons set forth below: (i) a material
reduction in the Executive's duties and responsibilities evidenced by the
Company's hiring of an employee who is given the title of Chief Financial
Officer, or (ii) the failure of the Company to make payments of Base Salary as
provided in Section 4.
Section 5. NO VIOLATION OF THIRD-PARTY RIGHTS.
(a) The Executive hereby represents, warrants and covenants
to the Company that the Executive:
i. is not a party to any agreements with third parties
that prevent him from fulfilling the terms of employment and the
obligations of this Agreement or which would be breached as a result
of his execution of this Agreement;
ii. is in compliance with any and all valid obligations
which he may now have to prior employers or to others relating to
confidential information, inventions or discoveries which are the
property of those prior employers or others, as they case may be.
If the Executive is in breach of any of the foregoing representations,
warranties and covenants or a court of competent jurisdiction issues a final
order (not including a temporary restraining order or other order subject to
interlocutory appeal) precluding the Executive from performing his duties
hereunder, the Company shall be entitled to terminate this Agreement for Cause.
Section 6. RELOCATION EXPENSES. The Company shall provide Executive
with a reasonable relocation allowance to be used for expenses incurred as a
result of relocating, payable within thirty (30) days after permanent
relocation from Bentleyville, Ohio to the Sarasota, Florida area. Costs may
include any costs associated with travel, or otherwise incurred as a result of
assuming employment with the Company, including but not limited to the cost of
temporary housing rental through August 2007. If Executive voluntarily
terminates his employment for any reason, except for Good Reason or by his
death or disability, within a twelve month period from the Commencement Date,
the Executive will promptly reimburse the Company for relocation expenses
received in an amount equal to the product of (x) the total relocation expenses
received or reimbursed pursuant to this Section 6 and (y) the quotient of (i)
the total number of months that the Executive is not employed by the Company
during such twelve month period divided by (ii) twelve.
Section 7. WITHHOLDING. The Company shall make such deductions and
withhold such amounts from each payment made to the Executive hereunder as may
be required from time to time by law, governmental regulation or order.
Section 8. NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be given by hand, facsimile or
first-class mail, certified or registered with return receipt requested, and
shall be deemed to have been duly given upon delivery or three (3) days after
mailing or twenty-four (24) hours after transmission of a facsimile to the
respective persons named below:
If to the Company
Global Signal Services LLC
000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: General Counsel
If to the Executive:
Xxxxxx X. Xxxxxx
00000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Either party may change such party's address for notices by notice duly given
pursuant hereto.
Section 9. DISPUTE RESOLUTION; ATTORNEYS' FEES. The parties agree that
any and all disputes arising out of the terms of this Agreement, their
interpretation, or the Executive's employment or termination by the Company
shall be subject to binding arbitration before the American Arbitrator
Association under its National Rules for the Resolution of Employment Disputes
before an arbitrator located in Sarasota or Tampa, Florida. The Company agrees
to pay all costs associated with arbitration, except that the parties shall pay
for their own attorneys' fees and costs. The arbitrator shall permit the
parties to engage in reasonable discovery measures, including depositions,
document production, interrogatories, and any other discovery measures that the
arbitrator may order. The arbitrator shall issue a written decision and shall
have authority to award any and all damages to which the party would otherwise
be entitled to under applicable law. Such decision shall be subject to limited
review by a court of competent jurisdiction. The parties agree that the
prevailing party in any arbitration shall be entitled to injunctive relief in
any court or competent jurisdiction to enforce the arbitration award. The
parties agree that the prevailing party in any arbitration shall be awarded its
reasonable attorneys' fees and costs to the extent not prohibited by law.
Section 10. GOVERNING LAW. This Agreement and the legal relations thus
created between the parties hereto shall be governed by and construed under and
in accordance with the laws of the State of Florida, without regard to its
conflicts of law principles.
Section 11. ENTIRE AGREEMENT. This Agreement is complete and embraces
the entire understanding of and between the parties. All prior understandings
of or in connection with the subject matter contained herein, either oral or
written, having been merged herein or canceled. The Executive acknowledges and
agrees that no representations have been made by the Company except those
expressly set forth herein. Without limiting the foregoing, the Executive
represents that he shall not be entitled to any equity interest or other
interest in the Company or GSL or any of its affiliates except to the extent
such an interest is granted by the Board of Directors and evidenced in a
writing signed by the Chairman of the Board of Directors.
Section 12. WAIVER; MODIFICATION. Failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right
or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times. This
Agreement shall not be modified in any respect except by a writing executed by
each party hereto.
Section 13. ASSIGNMENT; SUCCESSORS. This Agreement is personal in its
nature and neither of the parties hereto shall, without the consent of the
other, assign or transfer this Agreement or any other rights or obligations
hereunder; provided that, in the event of the merger, consolidation, transfer
or sale of all or substantially all of the assets of the Company or GSL with or
to any other individual or entity or any similar event, this Agreement shall,
subject to the provisions hereof, be binding upon and inure to the benefit of
such successor and such successor shall discharge and perform all the promises,
covenants, duties and obligations of the Company hereunder.
Section 14. SEVERABILITY. In the event that a court of competent
jurisdiction determines that any portion of this Agreement is in violation of
any statute or public policy, only the portions of this Agreement that violate
such statute or public policy shall be stricken. All portions of this Agreement
that do not violate any statute or public policy shall continue in full force
and effect. Furthermore, any court order striking any portion of this Agreement
shall modify the stricken terms as little as possible to give as much effect as
possible to the intentions of the parties under this Agreement.
Section 15. HEADINGS; INCONSISTENCY. Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose. In the event of any
inconsistency between the terms of this Agreement and any form, award, plan or
policy of the Company, the terms of this Agreement shall control.
Section 16. COUNTERPARTS. This Agreement may be executed in
counterparts (including counterparts delivered by facsimile), each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
Section 17. NON-COMPETE, NON-SOLICITATION AND CONFIDENTIALITY
AGREEMENT. This Agreement shall not be effective until such time as the
Executive executes and delivers the Non-Compete, Non-Solicitation and
Confidentiality Agreement attached hereto as Appendix C.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by it duly authorized officer and the Executive has hereunto signed
this Agreement on the date first written above.
COMPANY
/s/ Xxxxxx X. Xxxxx
-------------------------
By: Xxxxxx X. Xxxxx
Its: Chairman of the Board
EXECUTIVE
/s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
APPENDIX A
Form of Indexed Deferred Shares Award Agreement
APPENDIX B
Form of Restricted Stock Award Agreement
APPENDIX C
Non-Compete, Non-Solicitation and Confidentiality Agreement