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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into
as of the 3rd day of March, 1997, by and between US Xchange, L.L.C., a Michigan
limited liability company, of 20 Monroe, N.W., Suite 450, Grand Rapids, Michigan
49503 ("Company") and Lee Thibaudeau, of 2731 Old Coach Road, Green Bay,
Wisconsin 54306-5167 ("Thibaudeau").
Statement of Facts
Company is a telecommunications corporation engaged in the
business of establishing regional competitive local exchanges. Thibaudeau has
significant management experience and expertise which can benefit Company.
Company wishes to employ Thibaudeau and Thibaudeau wishes to be employed by
Company. Therefore, this Agreement is being entered into by the parties to
provide the terms and conditions under which Thibaudeau shall be employed by
Company.
Agreement
IN CONSIDERATION OF THE FACTS STATED ABOVE AND THE MUTUAL
COVENANTS CONTAINED IN THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS:
1. Employment. Company hires and employs Thibaudeau as a key
employee in the operation by Company of its business. Thibaudeau accepts
employment and agrees to continue to render his expert services to Company
during the term of this Agreement. Thibaudeau shall have the title Chief
Operating Officer - Midwest Region.
2. Term. The term of this Agreement ("Employment Period")
shall be for a period of five (5) years, commencing on March 17, 1997, and
ending March 16, 2002; provided, however, that the term of this Agreement shall
automatically renew for successive one (1) year periods unless terminated by
either party providing the other with written notice of termination at least
ninety (90) days prior to the applicable anniversary of the date of this
Agreement.
(a) Termination by Company. Company may
terminate this Agreement at any time.
(b) Termination by Thibaudeau. Thibaudeau may
terminate this Agreement prior to the expiration of the Employment
Period by providing Company with one hundred eighty (180) days prior
written notice.
3. Compensation.
(a) Salary. For services rendered by Thibaudeau as an
employee
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pursuant to the provisions of this Agreement, Company shall
pay Thibaudeau an annual salary of not less than One Hundred Thirty
Thousand and 00/100 Dollars ($130,000.00). The annual salary shall be
paid bi-monthly with equal installments of Five Thousand Four Hundred
Sixteen and 67/100 Dollars ($5,416.67) payable on the fifteenth (15th)
and last day of each month during the Employment Period. There shall be
withheld from Thibaudeau's compensation such amount as Company is
required by law to withhold and such other deductions as Thibaudeau
shall authorize. Except as provided in Paragraph 3(d) below, in the
event of early termination of this Agreement pursuant to Paragraph 2(a)
or 2(b) above, or the death of Thibaudeau prior to the expiration of
the Employment Period or any extension of this Agreement, Company shall
have no obligation to make further payment of compensation to
Thibaudeau or his estate under this Paragraph. However, in the event of
early termination of this Agreement by Thibaudeau or due to any event
described in Paragraph 3(d)(i), 3(d)(ii) or 3(d)(iii) below, Thibaudeau
shall continue to be subject to the provisions of Paragraphs 6, 7 and 8
of this Agreement.
(b) Benefits. During the Employment Period, the
Company shall allow Thibaudeau to participate in the Company's health
insurance plan and pension plan, and receive an automobile allowance
and other benefits on the same basis and eligibility requirements as
other similar executives of Company.
(c) Bonus. During the Employment Period, Thibaudeau
shall be eligible to receive an annual bonus in such amount as is
approved by Company's management. It is anticipated that the yearly
bonus will be a minimum of Twenty Thousand Dollars ($20,000).
(d) Salary Guarantee. Notwithstanding Paragraph 3(a),
above, in the event Company terminates this Agreement for any reason
other than just cause, Company shall continue to pay Thibaudeau's
salary and provide Thibaudeau's benefits for a period of one (1) year
following the date of termination. Just cause for the purposes of this
Agreement shall be defined as any of the following (i) failure of
Thibaudeau to perform competently any duty assigned to him which
nonperformance rises, to the level of the industry standard for just
cause termination, (ii) failure of Thibaudeau to perform any provision
under this Agreement, or (iii) Thibaudeau's dishonesty or fraud.
Company may not terminate this Agreement for just cause under Paragraph
3(d)(i) or 3(d)(ii) without having provided Thibaudeau with written
notice of such cause and a period of sixty (60) days to take corrective
action. This salary guarantee shall also be personally guaranteed by
Ronald Vander Pol.
(e) Equity Guarantee. Upon the first to occur of: (i)
the sale of Company's Wisconsin Region assets; (ii) the sale of all of
Company's assets or equity interests; (iii) the completion of an
initial public offering of Company's equity interests; or (iv) a merger
of Company with another entity where Company is not the surviving
entity (individually, a "Triggering Event"), Company agrees to pay
Thibaudeau the first $1,500,000.00 of net equity of the Wisconsin
Region (after subtracting Company's capitalization and outstanding debt
related to the Wisconsin Region) ("Equity
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Guarantee"). Company also agrees to pay Thibaudeau a 5% share (the
"Equity Share") of the total net equity (as defined above) following
the occurrence of a Triggering Event, it being the parties' intent that
the $1,500,000.00 payment described above be included in calculating
the 5% share. Notwithstanding the above, if Thibaudeau's employment by
Company is terminated for any reason during the initial five (5) year
term of this Agreement, Thibaudeau shall forfeit twenty percent (20%)
of the Equity Guarantee and twenty percent (20%) of the Equity Share
for each year or partial year less than five (5) that Thibaudeau is
employed by Company.
4. Post-Sale Covenants. Upon the occurrence of a Triggering
Event, Thibaudeau agrees to execute an employment agreement and non-compete
agreement with the purchaser for a period of not less than one (1) year,
provided that the salary to be paid Thibaudeau during such period shall not be
less than Thibaudeau's annual salary immediately prior to the sale, and further
provided that the employment agreement and non-compete agreement shall be
consistent with the terms and conditions of this Agreement except for Paragraph
3(e) which shall be omitted.
5. Nature of Employment. Company is employing Thibaudeau as
one of its key employees. Thibaudeau will provide management services to Company
pursuant to Company's business requirements. Thibaudeau shall conscientiously
and competently perform all the duties of any position which he holds, including
any additional duties assigned to him. During the Employment Period, Thibaudeau
shall devote his time and efforts as required in the performance of his duties
under this Agreement and shall use his best efforts to promote the business and
interests of Company.
6. Non-Compete Agreement. Following termination of this
Agreement by expiration of the Employment Period, or in the event of termination
by Thibaudeau or due to any event described in Paragraph 3(d)(i), 3(d)(ii) or
3(d)(iii) above, Thibaudeau agrees as follows:
(a) That his services and responsibilities are unique
in character and are of particular significance to Company, that
Company is a competitive business and his continued and exclusive
service to the Company under this Agreement is of a high degree of
importance to the Company. Therefore, during the Employment Period and
for a period of one (1) year thereafter (the "Non-Compete Period"),
Thibaudeau shall not, directly or indirectly, as owner, partner, joint
venturer, employee, broker, agent, corporate officer, principal,
licensor, shareholder (unless as owner of no more than five percent
(5%) of the issued and outstanding capital stock of such entity if such
stock is traded on a major securities exchange) or in any other
capacity whatsoever, engage in or have any connection with any business
which is competitive with the Company, and which operates anywhere in
the Midwest Region as defined by Company. For purposes of this
Agreement, a business will be deemed to be competitive with the Company
if it is engaged in the same business that the Company is engaged in on
the date hereof or on the date of termination.
(b) During the Non-Compete Period, Thibaudeau shall
not:
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(i) directly or indirectly, by initiating
contact or otherwise, induce, influence, combine or conspire
with, any of the officers, employees or agents of Company to
terminate their employment or relationship with or to compete
against Company;
(ii) directly or indirectly, by initiating
contact or otherwise, divert or attempt to divert any or all
of any customers' or suppliers' business with Company.
7. Use of Information Obtained During Employment Period.
Without limiting the general provisions set forth in Paragraph 6, Thibaudeau
shall not for any reason, except in the ordinary course of business, use or
divulge to any other person or party, except an officer or director of Company,
any trade secrets or private business information of Company, including, without
limitation, the names and/or records of any customer of Company, the names of
any companies which are providing any services to Company, and correspondence or
any other confidential or proprietary information relating to Company's business
which may harm Company in any way.
8. Ownership of Documents, Inventions, Discoveries and
Improvements. All records, files, plans, sketches, notes, notebooks, letters or
the like relating to the business of Company, which Thibaudeau uses, prepares or
comes in contact with shall remain the sole property of Company. Upon
termination of employment, Thibaudeau shall promptly return all such materials
in Thibaudeau's possession or control to Company. Further, Thibaudeau shall
promptly inform Company of all inventions, discoveries and improvements made by
Thibaudeau individually or in conjunction with others during the course of
Thibaudeau's employment, which relate to Company's business. Thibaudeau shall
assign to Company all of Thibaudeau's rights to such inventions, discoveries and
improvements, and Company shall have a royalty-free right to use such
inventions, discoveries and improvements in its business.
9. Equitable Relief. The covenants of Thibaudeau contained in
this Agreement represent special, unique and extraordinary consideration of an
immeasurable value which cannot be reasonably or adequately compensated by
damages in an action at law, and a breach by Thibaudeau would cause Company
irreparable injury and damage. Thibaudeau agrees that Company will be entitled
to a remedy of injunction, specific performance or other equitable relief which
will prevent the breach or breaches of the covenants contained in this
Agreement, and this relief shall not constitute the waiver of any rights which
Company may have for other damages.
10. Location. During the Employment Period, Thibaudeau shall
not be required by Company to relocate his residence from Green Bay, Wisconsin.
11. Legal Expenses. In the event suit shall be brought by a
party due to the breach of any term or condition of this Agreement, all expense
incurred in connection with such suit (including attorney's fees) shall be
awarded to the prevailing party in such suit.
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12. Anticipation of Compensation. Thibaudeau shall have no
power to transfer, assign, anticipate or otherwise encumber any payment required
to be made under this Agreement, nor will any such payment be subject to seizure
for the payment of any debt or judgment or be transferable by operation of law
in the event of bankruptcy, insolvency or otherwise.
13. Assignment. This Agreement shall not be assignable by
Thibaudeau without the written consent of Company. This Agreement shall be
freely assignable by Company.
14. Miscellaneous. No waiver by either party of any breach of
this Agreement will be deemed a waiver of any preceding or succeeding breach of
the same or any other provision hereof. Each and all of the several rights,
remedies and options of either party under this Agreement will be construed as
cumulative and no one of them is exclusive of the other or of any right, remedy
or priority allowed by law or in equity.
15. Governing Law. This Agreement will be governed by and
construed under and in accordance with the laws of the State of Michigan.
16. Headings. Paragraph headings contained in this Agreement
are for convenience only and will not be considered for any purpose in
construing this Agreement.
17. Notices. All notices and other communications provided for
in this Agreement shall be in writing and shall be deemed to have been given
when delivered in person to the recipient or 48 hours after depositing the same
in the United States Mail, by certified mail, postage prepaid, addressed to the
party at its address set forth above.
18. Successors and Assigns. All the terms and provisions of
this Agreement shall be binding upon, shall inure to the benefit of, and shall
be enforceable by the respective heirs, beneficiaries, personal representative,
successors and assigns of the parties to this Agreement.
19. Third Parties. This Agreement is for the benefit of the
parties, their successors and assigns, and is not for the benefit of any third
party.
20. Entire Agreement. This Agreement cancels and supersedes
all prior negotiations and understandings between the parties relating to its
subject matter, and contains all of the terms, conditions and promises of the
parties in connection with Thibaudeau's employment by Company; no modification
or waiver of any of the provisions of this Agreement will be valid and binding
unless in writing.
21. Severability. The unenforceability of any provision of
this Agreement shall not affect the enforceability of the remaining provisions
of this Agreement.
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WHEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE
DATE FIRST WRITTEN ABOVE.
US XCHANGE, L.L.C.
By /s/ Ronald VanderPol
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Its CEO
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/s/ Lee Thibaudeau
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Lee Thibaudeau
Personal Guarantee
The undersigned, Ronald VanderPol, is executing this
Agreement for the sole purpose of personally guaranteeing the payments required
by Paragraph 3(d).
/s/ Ronald VanderPol
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Ronald VanderPol