EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, by and between Patrick K. Brady (the "Employee") and
Teledata Solutions, Inc., an Illinois corporation (the "Company"), is made as of
March 19, 1996.
In consideration of the mutual covenants herein contained, and in
consideration of the employment of Employee by the Company, the parties agree as
follows:
1. Duties and Scope of Employment.
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(a) Position. The Company agrees to employ the Employee under the terms of
this Agreement in the position of Chairman and Chief Executive Officer. Employee
shall report to the Board of Directors of the Company.
(b) Obligations. During the term of this Agreement, the employee shall
devote his full business efforts and time to the Company.
(c) Director. As long as the Employee serves as Chief Executive Officer or
Chairman, Employee shall be nominated to serve on the Company's Board of
Directors.
2. Compensation.
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(a) Base Salary and Bonus. Beginning on the effective date of this
Agreement, the Employee shall be paid a base salary (the "Base Compensation") of
$90,000, per year, payable in accordance with the Company's standard payroll
policies. The Board of Directors shall review Employee's performance and the
Company's financial and operating results on at least an annual basis and shall
adjust Employee's base salary as it deems appropriate based on such review.
(b) Bonus. Employee shall also be eligible for a bonus of up to $35,000
for fiscal year 1996 based on the criteria set forth in Exhibit A. The bonus
will be due and payable on the 15th day of February, 1997. The Board of
Directors shall set bonus levels and targets for years after fiscal year 1996 as
it deems appropriate. In the event Employee's employment with the Company
terminates for any reason other than pursuant to Section 6(c) hereof (voluntary
termination by the Employee) or 6(b)(ii) hereof (Termination for Cause),
Employee shall be entitled to receive a pro rated bonus for such year,
determined by dividing the aggregate bonus which he would have earned for the
entire year (assuming he had remained employed for the entire year and the
original revenue/milestone targets established for such year continued to apply)
by the number of full or partial months during which he was employed by the
Company. Such bonus shall be paid on February 15 of the following year. If
Employee's employment with the Company terminates pursuant to Section 6(c)
hereof or Section 6(b)(ii) hereof, Employee shall be deemed to have forfeited
his entire bonus for such year and no such bonus shall be due or payable by the
Company.
(c) Vacation. Employee shall be entitled to three (3) weeks paid vacation
during each year of employment. Such vacation shall be taken at a time mutually
convenient for both the
Company and the Employee. Unused vacation time may not be accrued from year to
year during the term of this Agreement without the Company's prior written
approval. In the event this Agreement is terminated by either the Company or the
Employee, the Employee shall be paid for any unused, accrued vacation time.
3. Definitions. As used herein, the following definitions shall apply:
(a) "Cause" shall mean the termination of employment of Employee shall
have taken place as a result of (i) act or acts of dishonesty undertaken by
Employee and intended to result in substantial gain or personal enrichment of
Employee at the expense of the Company, (ii) persistent failure by Employee to
perform the duties and obligations of Employee's employment which are not
remedied in a reasonable period of time after receipt of written notice from the
Company; (iii) the conviction of Employee of a felony; or (iv) Employee's
continued breach of any term of this Agreement or any Exhibit to this Agreement
after written notice and a reasonable period to cure.
(b) "Constructive Termination" shall mean (i) a material reduction in
Employee's salary or benefits not agreed to by Employee (except in connection
with a decrease to be applied because the Company's performance has decreased
and which is also applied to other officers, and excluding the substitution of
substantially equivalent compensation and benefits), or (ii) a material change
in Employee's responsibilities (other than as contemplated by, and consistent
with the spirit of, Section 1(a)) not agreed to by Employee.
(c) "Disability" shall mean that the Employee, at the time notice is
given, has been unable to perform his duties under this Agreement for a period
of not less than six (6) consecutive months or for a period of two hundred
seventy (270) days in any three hundred sixty-five (365) day period as the
result of his incapacity due to physical or mental illness. In the event that
the Employee resumes the performance of substantially all of his duties
hereunder before the termination of his employment under Section 6(b) (iii)
become effective, the notice of termination shall automatically be deemed to
have been revoked.
(d) "Voluntary Termination of Employment" shall mean Employee voluntarily
terminates his employment with the Company, unless such termination occurs
within three (3) months following a Constructive Termination.
4. Employee Benefits.
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(a) General. During the term of his employment under this Agreement, the
Employee shall be entitled to the full benefits for which Employee is eligible
under the employee benefit plans and including (without limitation) pension
plans, savings or profit-sharing plans, deferred compensation plans,
supplemental retirement plans, stock option, incentive or other bonus plans,
life, disability, health, accident and other insurance programs, paid vacations
and sabbatical, and similar plans or programs, subject in each case to the
generally applicable terms and conditions of the plan or program in question and
to the determination of any committee or the Board of Directors administering
such plan or program.
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5. Business Expense and Travel. During the term of his employment under
this Agreement, the Employee shall be authorized to incur necessary and
reasonable travel, entertainment and other business expenses in connection with
his duties hereunder. The Company shall reimburse the Employee for such expenses
upon presentation of an itemized account and appropriate supporting
documentation, all in accordance with the Company's generally applicable
policies.
6. Term of Employment.
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(a) Basic Rule. The Company agrees to continue the Employee's employment,
and the Employee agrees to remain in the employ of the Company, from the
effective date of this Agreement until the date when the Employee's employment
terminates pursuant to the provisions of this Agreement.
(b) Termination by the Company. The Company may terminate Employee's
employment at any time, for any reason or for no reason.
(i) Termination Without Cause. If the Company terminates Employee's
employment during the term of this Agreement for any reason whatsoever,
other than Voluntary Termination of Employment, Termination for Cause, or
termination as a result of Employee's Death or Disability, the provisions
of Section 7(a) shall apply.
(ii) Termination for Cause. If the Company terminates Employee's
employment for Cause during the term of this Agreement, the provisions of
Section 7(b) shall apply.
(iii) Termination on Death or Disability. If the Company terminates
Employee's employment as a result of Employee's Death or Disability, the
provisions of Section 7(c) shall apply.
(c) Voluntary Termination by the Employee. The Employee may terminate his
employment voluntarily by giving the Company sixty (60) days' advance notice in
writing, at which time the provisions of Section 8(b) shall apply. However, if
the Employee terminates his employment within three (3) months following a
Constructive Termination, the provisions of Section 7(a) shall apply.
(d) Waiver of Notice. Any waiver of notice shall be valid only if it is
made in writing and expressly refers to the applicable notice requirement in
this Section 6.
7. Payments Upon Termination of Employment.
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(a) Payments Upon Termination Pursuant to Section 6(b)(i) and Constructive
Termination. If, during the term of this Agreement, the Employee's employment is
terminated by the Company pursuant to Section 6(b)(i) or voluntarily by Employee
within three (3) months following a Constructive Termination, the Employee shall
be entitled to receive the following:
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(i) Severance Payment. (A) The Company shall continue to pay to the
Employee his Base Compensation for six (6) months following the date of
Employee's actual termination of employment (together with amounts payable
pursuant to (B) below, the "Severance Payment"). Such Base Compensation
amount shall be the Base Compensation determined as of the commencement
date of this Agreement, and as is agreed to in future years by the Board of
Directors.
(B) The Employee shall have no duty to mitigate damages by
attempting to secure new employment after termination of employment.
However, in the event that the Employee does use his best efforts to secure
equal or better employment than the employment hereunder after termination
of employment from the Company and has not secured such new employment on
the date six (6) months following Employee's termination of employment,
then the Company shall continue to pay to the Employee the Base
Compensation payable pursuant to (A) above for so long as the Employee
continues to use his best efforts to secure such new employment, up to a
maximum of an additional six (6) months. Notwithstanding anything herein or
in Employee's Noncompetition, Nondisclosure and Developments Agreement of
even date herewith to the contrary, the six-month time period set forth in
paragraph 1 of the Employee's Noncompetition, Nondisclosure and
Developments Agreement shall be extended by the amount of time that the
Employee receives such additional Severance Payment.
(ii) Method of Payment. The Severance Payment shall be made in
monthly installments.
(iii) Payment in Lieu of Contract Damages. The Severance Payment shall
be in lieu of any further payments to the Employee and any further accrual
of benefits with respect to periods subsequent to the date of the
employment termination. Notwithstanding the preceding sentence, neither the
Severance Payment nor any other payments under this Section 7(a) shall
reduce or offset any benefits the Employee may be entitled to under the
specific terms of the benefit plans of the Company.
(b) Termination By Company for Cause or Voluntary Termination. If the
Employee's employment is terminated pursuant to Section 6(b)(ii) or voluntarily
(other than within three (3) months following a Constructive Termination)
pursuant to Section 6(c), no compensation or payments will be paid or provided
to the Employee for the periods following the date when such a termination of
employment is effective. Notwithstanding the preceding sentence, the Employee's
rights under the benefit plans shall be determined under the provisions of those
plans.
(c) Termination on Death or Disability. If the Employee's employment is
terminated because of Employee's Death or Disability (as defined in Section 3(d)
herein), then Employee shall receive other severance and disability payments as
provided in the Company's standard benefit plans.
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8. Noncompetition, Nondisclosure and Developments. As a condition of
employment, concurrently with the execution hereof, Employee agrees to execute
the Noncompetition, Nondisclosure and Developments Agreement set forth in
Exhibit B.
9. Successors.
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(a) Company's Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company's business and/or assets
shall assume this Agreement and agree expressly to perform this Agreement in the
same manner and to the same extent as the Company would be required to perform
it in the absence of a succession. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which executes and delivers the assumption agreement described in this
subsection (a) or which becomes bound by this Agreement by operation of law.
(b) Employee's Successors. This Agreement and all rights of the Employee
hereunder shall be binding upon, inure to the benefit of, and be enforceable by,
the Employee's personal or legal representatives, devises and legatees. Any
purported or attempted assignment or transfer by the Employee of any of the
Employee's duties, responsibilities or obligations hereunder shall be void.
10. Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or three (3) days after being mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the case of the
Employee, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing in accordance herewith
(provided that no such change shall be effective until actually received by the
Company). In the case of the Company, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to the attention of
its President.
11. Termination of this Agreement. This Agreement shall terminate upon the
earlier of (i) the date that all obligations of the parties hereunder have been
satisfied, (ii) four (4) years from the date of this Agreement. A termination of
this Agreement pursuant to the preceding sentence shall be effective for all
purposes, except that such termination shall not affect (A) the payment or
provision of compensation or benefits on account of a termination of employment
occurring prior to the termination of this Agreement is contemplated herein, or
(B) the rights and obligations of the parties contained in ancillary agreements
hereto or set forth in the Exhibits. No payments under this Agreement shall be
required for any termination of employment occurring after four (4) years from
the date of this Agreement.
12. Miscellaneous Provisions.
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(a) Waiver. No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by the President. No waiver by
either party of any breach of, or of compliance with, any
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condition or provision of this Agreement by the other party shall be considered
a waiver of any other condition or provision or of the same condition or
provision at another time.
(b) Whole Agreement. No agreements, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth in this Agreement or the Exhibits hereto have been made or entered
into by either party with respect to the subject matter hereof. This Agreement
shall supersede and control in the event of any conflict between this Agreement
and any other correspondence with the Company.
(c) Choice of Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Illinois. Any claims or legal
actions by one party against the other arising out of the relationship between
the parties contemplated herein (whether or not arising under this Agreement)
shall be governed by the laws of the State of Illinois and shall be commenced
and maintained in any state or federal court located in Cook County, Illinois,
and both parties hereby submit to the jurisdiction and venue of any such court.
(d) Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
(e) No Assignment of Benefits. To the extent permitted by law, the rights
of any person to payments or benefits under this Agreement shall not be made
subject to option or assignment, either by voluntary or involuntary assignment
or by operation of law, including (without limitation) bankruptcy, garnishment,
attachment or other creditor's process, and any action in violation of this
subsection (e) shall be void.
(f) Employment At Will; Limitation of Remedies. The Company and the
Employee acknowledge that the Employee's employment is at will, as defined under
applicable law. If the Employee's employment terminates for any reason, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement.
(g) Employment Taxes. All payments made pursuant to this Agreement will be
subject to withholding of applicable taxes.
(h) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together will constitute one
and the same instrument.
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IN WITNESS THEREOF, each of the parties has executed this Agreement, in the
case of the Company by its Vice President, as of the day and year first above
written.
"COMPANY"
TELEDATA SOLUTIONS, INC.
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Catherine R. Brady
Vice President
"EMPLOYEE"
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Patrick K. Brady
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List of Exhibits
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Exhibit A: 1996 Bonus Criteria
Exhibit B: Noncompetition, Nondisclosure and Developments Agreement