Exhibit 10.18
ELCOTEL, INC.
Employment Agreement of
C. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Agreement (this "Agreement") dated as of this 1/st/ day of October, 1997 by and
between Elcotel, Inc. (the "Company") and C. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇. ▇▇▇▇▇") upon
the following terms and conditions:
Term:
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Commencement Date: Closing of merger between Elcotel Hospitality
Service, Inc. and Technology Service Group, Inc.
Termination Date: December 31, 1998 unless sooner terminated as provided
herein.
Renewal: Except as hereinafter provided, on the Termination Date and on
each anniversary of the Termination Date, this Agreement shall
automatically continue for an additional year unless the Company shall have
given ▇▇. ▇▇▇▇▇ written notice of non-renewal at least one hundred eighty
(180) days in advance of the Termination Date or an anniversary thereof.
Non-Renewal: If such notice of non-renewal is given, ▇▇. ▇▇▇▇▇ shall
continue as Chairman of the Board of the Company for all or any part of
such 180-day period as the Company may request, but he shall nevertheless
be entitled to take reasonable time during such period to look for other
employment. At the end of such period, ▇▇. ▇▇▇▇▇'▇ employment shall
terminate, and the Company shall provide to ▇▇. ▇▇▇▇▇ the ▇▇▇▇▇▇▇▇▇
Benefits (as hereinafter defined).
Title & Responsibilities: ▇▇. ▇▇▇▇▇ shall be elected Chairman of the Board
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of Directors and an employee of the Company, and he shall devote such time as
he deems necessary to carry out the responsibilities of this position.
Salary: During the term of this Agreement, the salary paid to ▇▇. ▇▇▇▇▇
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shall not be less than ninety-four thousand ($94,000) per year, and shall be
subject to annual review for merit or other increases at the sole discretion
of the board of directors of the Company.
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EXECUTIVE CONFIDENTIAL 1
Benefits: ▇▇. ▇▇▇▇▇ shall be entitled to the same benefits as are made
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available to the Company's other senior executives and on the same terms and
conditions as such executives (the "Benefits").
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EXECUTIVE CONFIDENTIAL 2
Bonuses: ▇▇. ▇▇▇▇▇ shall be paid an annual incentive bonus (the "Incentive
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Bonus") as provided in Exhibit A.
Stock Option: ▇▇. ▇▇▇▇▇ shall be granted a stock option to purchase shares
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of the Company's common stock pursuant to a Company stock option plan as
provided in Exhibit A. ▇▇. ▇▇▇▇▇ shall retain all options previously granted
and unexercised which will vest in accordance with their terms.
Business Expenses: ▇▇. ▇▇▇▇▇ shall be reimbursed (in accordance with
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Company policy from time to time in effect) for all reasonable business
expenses incurred by him in the performance of his duties.
Indemnification: ▇▇. ▇▇▇▇▇ shall be indemnified by the Company with respect
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to claims made against him as a director, officer and/or employee of the
Company and as a director, officer an/or employee of any subsidiary of the
Company to the fullest extent permitted by the Company's certificate of
incorporation, by-laws and the General Corporation Law of the State of
Delaware.
Termination By the Company: ▇▇. ▇▇▇▇▇' employment may be terminated by the
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Company only as provided below:
For Cause: For Cause by written notice to ▇▇. ▇▇▇▇▇ and payment to
him of salary accrued, but not paid through the date of termination;
provided however -
If the nature of such Cause involves dishonesty, fraud or
serious moral turpitude, such termination shall be effective upon the
giving of such notice.
If the nature of such Cause does not involve dishonesty, fraud
or serious moral turpitude, such termination shall be effective upon
the expiration of thirty (30) days after the giving of such notice
unless within such thirty-day period, ▇▇. ▇▇▇▇▇ has cured the basis of
such Cause, or it a cure is not possible within a thirty-day period,
if he has diligently and in good faith commenced to effect such cure.
Without Cause: Without Cause by prior written notice of termination
given to ▇▇. ▇▇▇▇▇ and by compliance with the following:
In the event that at the date the notice of a termination
Without Cause is given there is at least twelve (12) months remaining
in the term, such notice of termination shall be sent to
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EXECUTIVE CONFIDENTIAL 3
▇▇. ▇▇▇▇▇ no more than seven (7) days prior to the effective date of
termination, and the Company (I) on the effective date shall pay to
▇▇. ▇▇▇▇▇ his salary in a lump sum for the balance of the term of this
Agreement; (ii) shall continue at its expense to provide the Benefits
for the balance of the term of this Agreement; and (iii) shall pay to
▇▇. ▇▇▇▇▇ the Incentive Bonus and shall satisfy its obligations
regarding his stock option when, as, and to the extent provided for in
Exhibit A.
In the event that at the date the notice of a termination
Without Cause is given there is less than twelve (12) months remaining
in the term, such notice of termination shall be sent to ▇▇. ▇▇▇▇▇ six
(6) months prior to the effective date of termination, and during such
6-month period, ▇▇. ▇▇▇▇▇ shall continue as Chairman of the Board of
the Company for all or any part of such period as the Company may
request, but he shall nevertheless be entitled to take reasonable time
during such period to look for other employment. At the end of such
6-month period, ▇▇. ▇▇▇▇▇ employment shall terminate, and the company
shall provide to ▇▇. ▇▇▇▇▇ the Severance Benefits.
A reduction in ▇▇. ▇▇▇▇▇ title, responsibilities or salary may,
at ▇▇. ▇▇▇▇▇ option, be treated by him as a notice of termination of
his employment by the Company without Cause given as of the date of
such reduction.
Death or Permanent Disability: Upon the death or permanent disability of
▇▇. ▇▇▇▇▇, but only after providing him with the Severance Benefits.
Definition of "Cause": "Cause" for purposes of termination by the
Company shall be defined as (I) any act or acts by ▇▇. ▇▇▇▇▇ of dishonesty
or fraud or that constitute serious moral turpitude; or (ii) misconduct of
a material nature or a material breach in connection with the performance
by him of his responsibilities hereunder that ▇▇. ▇▇▇▇▇ knew or should have
known would be materially detrimental to the Company or its business.
Definition of "Severance Benefits": The "Severance Benefits" shall mean
the following: (I) the continuation by the Company for a period of six (6)
months of the payment of ▇▇. ▇▇▇▇▇' salary in effect at the date of the
termination of his employment; (ii) the continuation by the Company at its
expense for a period of six (6) months of the Benefits; and (iii) the
payment by the Company of the Incentive Bonus and the satisfaction by
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EXECUTIVE CONFIDENTIAL 4
the Company of its obligations regarding ▇▇. ▇▇▇▇▇' stock option when, as
and to the extent provided for in Exhibit A.
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EXECUTIVE CONFIDENTIAL 5
Termination By ▇▇. ▇▇▇▇▇:
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Mr. ▇▇▇▇▇ ▇▇▇ terminate his employment under this Agreement by reason of
a breach hereof by the Company on twenty (20) days prior written notice to
the Company.
Mr. ▇▇▇▇▇ ▇▇▇ also terminate his employment under this Agreement by
giving the Company one hundred twenty (120) days notice of termination
effective on December 31, 1998 or on any date thereafter.
Notices: Notices that are required or permitted hereunder shall be given by
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hand delivery to a courier service providing next day delivery and proof of
receipt, or by facsimile transmission (except to ▇▇. ▇▇▇▇▇), as follows:
If to the Company at: Elcotel, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to ▇▇. ▇▇▇▇▇, to his most recent residence address on the books of
the Company:
or to such other address of a party as to which that party shall notify the
other parties in the manner provided herein.
Proration: To the extent that proration is not otherwise provided for in
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this Agreement, all amounts payable to ▇▇. ▇▇▇▇▇ under this Agreement shall
be deemed earned on a daily basis and shall be prorated based on a 365-day
year.
Entire Agreement, etc.: This Agreement together with Exhibit A contains the
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entire understanding of the parties except as otherwise expressly
contemplated herein; shall not be amended except by written agreement of the
parties signed by each of them; shall be binding upon and inure to the
benefit of the parties and their successors, personal representatives and
assigns; and shall supersede all prior employment agreements between the
parties.
No representation, affirmation of fact, course of prior dealings, promise or
condition in connection herewith not incorporated herein shall be binding on
the parties.
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EXECUTIVE CONFIDENTIAL 6
No waiver of any term or condition contained herein shall be binding upon the
parties unless made in writing and signed by the party to be bound thereby.
In Witness Whereof, the parties have executed and delivered this Agreement as of
the date first set forth above.
EMPLOYEE: ELCOTEL, INC.
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇,
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C. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇, President and
Chief Operating Officer
▇▇▇▇▇.
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EXECUTIVE CONFIDENTIAL 7
EXHIBIT A
INCENTIVE BONUS PLAN
C. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Employment Agreement
An annual incentive bonus will be paid equal to 50% of base salary if the
Company achieves its after tax profit plan for the year. If the Company is
profitable and earns less than its plan, then a bonus will be equal to the
percentage achievement of the annual plan times 50% of base salary. If the
Company achieves profits in excess of its annual plan then, at the discretion of
the Board, an additional bonus in excess of 50% of base salary may be paid.
▇▇▇▇▇.
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EXECUTIVE CONFIDENTIAL 8
