Exhibit 10.2
EMPLOYMENT
AGREEMENT
This Employment Agreement (this
“Agreement”) dated
, 2006 is entered into by and between
, an individual (the `Employee”), and American Telecom
Services, Inc., a Delaware corporation (the “Company”),
and effective as of the date of the consummation of the initial
public offering of the Company’s stock (the “Effective
Time”).
RECITALS
A. The Company is engaged in the
business of sourcing, marketing, and distributing telephony
equipment bundled with broadband or prepaid communication
services.
B. The Employee has been employed by
the Company as its
;
C. The Company wishes to continue to
employ the Employee as its
, subject to the terms and conditions set forth below.
NOW, THEREFORE, in consideration of
their mutual promises and agreements and subject to the terms and
conditions set forth below, the parties agree as
follows:
1. Employment; Term . The
Company agrees to employ the Employee, and the Employee accepts
employment with and agrees to be employed by the Company, in the
position of
on the terms and subject to the conditions contained herein. The
Employee’s responsibilities, duties and authority shall be
those reasonably accorded to and expected of such positions
including those established from time to time by the
Company’s Board of Directors, to whom the Employee will
report. The Employee shall devote substantially all of his working
time, attention, expertise, skill, abilities, energies and efforts
to the business of the Company and to the discharge of such
responsibilities and the performance of such duties as so assigned
or delegated to him. The Employee shall comply with the
Company’s policies and procedures as they may exist from time
to time. The Employee shall not, directly or indirectly, render any
services of a business, commercial, or professional nature to any
other entity or person in any way competitive with the Company,
whether for compensation or otherwise. The Employee represents that
the execution of this Agreement and the performance of the
Employee’s duties under this Agreement do not conflict with
or result in a breach or a default under any agreement, contract or
instrument to which the Employee is a party or by which the
Employee is bound. The Employee may engage in charitable, civic or
community activities provided that they do not interfere with the
performance of the Employee’s duties hereunder or otherwise
violate any provisions of this Agreement.. The Term of this
Agreement shall commence as of the Effective Time and shall
continue through December 31, 2007 unless terminated as
provided herein (the “Term”).
2. Base Salary . In
consideration for the services to be rendered by the Employee to
the Company under this Agreement, the Company shall pay the
Employee an annualized base salary (the “Base Salary”)
in substantially equal regular periodic payments in accordance with
the Company’s regular payroll process, less applicable
withholding deductions required or authorized by law. For the
period ending June 30, 2006, the Employee’s annualized
Base Salary shall be $
per year. For the period beginning July 1, 2006, and ending
December 31, 2007, Employee’s annualized Base Salary
shall be $
per year.
The Employee shall be responsible
for all required taxes, whether Federal, state or local in nature,
including but not limited to, income taxes, Social Security taxes,
Federal Unemployment Compensation Taxes, in each case, that are
required to be paid by him pursuant to any applicable law. The
Company shall have the right to withhold from the sums payable to
the Employee hereunder (including base salary and any bonus) such
amounts, if any, as may be required by the Internal Revenue Code of
the United States or any other like statute that is, or may become,
applicable to the provisions hereof.
3. Bonus Payments . The
Employee shall be eligible for Net Sales Bonus payments and Net
Profits Bonus payments as follows:
(a) Net Sales Bonus . The
Employee shall be eligible for bonus payments based on the
“Company’s Net Sales”, defined as the
Company’s revenues collected during the relevant bonus
period, less allowances granted to retailers, markdowns, discounts,
commissions, reserves for service outages, customer holdbacks, and
expenses, (the “Net Sales Bonus”), as described
below.
(i) Calculation and Timing of
Payments . The Net Sales Bonus shall be calculated and payable
as follows:
(A) Subject to the limitation in
Section 3(c) below, one percent of the amount by which the
Company’s Net Sales during the fiscal year ending
June 30, 2006, exceed $5,000,000, payable within ten
(10) days after the first public availability of the
Company’s audited financial statements for the fiscal year
ending June 30, 2006;
(B) Subject to the limitation in
Section 3(c) below, one percent of the amount by which the
Company’s Net Sales for the fiscal year ending June 30,
2007, exceed the Company’s Net Sales during the fiscal year
ending June 30, 2006 payable within ten (10) days after
the first public availability of the Company’s audited
financial statements for the fiscal year ending June 30, 2007;
and
(C) Subject to the limitation in
Section 3(c) below, one percent of the amount by which the
Company’s Net Sales for the six-month period ending
December 31, 2007, exceed the Company’s Net Sales during
the six-month period ending June 30, 2007 payable within ten
(10) days after the first public availability of
Company’s audited financial statements for the six month
period ending December 31, 2007.
(D) The Net Sales Bonus shall in no
event exceed seventy five percent (75%) of (x) the
Employee’s then current annual Base Salary or, (y) in
the case of the six-month period ending December 31, 2007, the
Base Salary during such period.
(ii) Termination for Cause .
If this Agreement is terminated for cause by the Company pursuant
to Section 10(a) of this Agreement, the Employee shall be
ineligible for any Net Sales Bonus following the date of
termination of this Agreement; provided, however, if this Agreement
is still in effect on the last day of the fiscal year or other
financial reporting period on which a Net Sales Bonus payment is
based, the Employee shall remain eligible for a Net Sales Bonus
payment for such period in accordance with this
Section 3.
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(iii) Termination Without Cause
Or For Good Reason . If this Agreement is terminated without
cause by the Company, by reason of death or disability as provided
in Section 10 hereof, or for Good Reason by the Employee, the
Employee shall be eligible for a pro rated Net Sales Bonus based on
the data from the Company’s audited financial statements for
the period ending on the last completed quarter of the financial
reporting period on which a Net Sales Bonus is based; it being
understood for purposes of Sections 3(a)(i)a and 3(a)(i)b that the
sales figures shall be annualized and the resulting Net Sales Bonus
shall be equal to the product of (x) the Net Sales Bonus
determined on such annualized sales figures and (y) a
fraction, the numerator of which shall be the number of quarters
completed in the financial reporting period prior to the
termination and the denominator of which shall be four; it being
further understood that for purposes of Section 3(a)(i)c, if
the termination occurs after September 30, 2007 but prior to
December 31, 2007, the sales figures through the quarter
ending September 30, 2007 shall be multiplied by two and the
resulting Net Sales Bonus shall be equal to the quotient of
(x) the Net Sales Bonus determined on the basis of such sales
figures and (y) two. The pro rated bonus hereunder shall be
payable within ten days of the termination date of this
Agreement.
For purposes of this Agreement,
“ Good Reason ” shall mean (i) the
Company’s material breach of this Agreement and its failure
to cure such breach within thirty (30) days after written
notice thereof from the Employee to the Company.
(iv) Termination by the
Employee . If this Agreement is terminated by the Employee for
any reason (other than for Good Reason), the Employee shall be
ineligible for any Net Sales Bonus following the date of
termination, provided, however, if this Agreement is still in
effect on the last day of the fiscal year or other financial
reporting period on which a Net Sales Bonus is based, the Employee
shall remain eligible for a Net Sales Bonus payment for such period
in accordance with this Section 3.
(b) Net Profits Bonus .
During the Term, the Employee shall receive a bonus based on the
“Company’s Net Profits,” defined as the
Company’s net income, after taxes, as determined in
accordance with Generally Accepted Accounting Principles (GAAP),
(the “Net Profits Bonus”), as described
below.
(i) Calculation and Timing of
Payments . The Net Profits Bonus shall be calculated and
payable as follows:
(A) Subject to the limitation in
Section 3(c) below, one percent of the Company’s Net
Profits for the fiscal year ending June 30, 2006 payable
within ten (10) days after the first public availability of
the Company’s audited financial statements for the fiscal
year ending June 30, 2006;
(B) Subject to the limitation in
Section 3(c) below, one percent of the Company’s Net
Profits for the fiscal year ending June 30, 2007 payable
within ten (10) days after the first public availability of
the Company’s audited financial statements for the fiscal
year ending June 30, 2007; and
(C) Subject to the limitation in
Section 3(c) below, one percent of the Company’s Net
Profits for the six-month period ending December 31, 2007
payable within ten (10) days after the first public
availability of Company’s audited financial statements for
the six month period ending December 31, 2007.
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(ii) Termination for Cause .
If this Agreement is terminated for cause by the Company pursuant
to Section 10(a) of this Agreement, Employee shall be
ineligible for any Net Profits Bonus payment following the date of
termination, provided, however, if this Agreement is still in
effect on the last day of the fiscal year or other financial
reporting period on which a Net Profits Bonus is based, the
Employee shall remain eligible for a Net Profits Bonus payment for
such period in accordance with this Section 3.
(iii) Termination Without Cause
Or For Good Reason . If this Agreement is terminated without
cause by the Company, by reason of death or disability as provided
in Section 10 hereof, or for Good Reason by the Employee, the
Employee shall be eligible for a pro rated Net Profits Bonus based
on the data from the Company’s audited financial statements
for the period ending on the last completed quarter of the
financial reporting period on which a Net Profits Bonus is based;
it being understood for purposes of Sections 3(b)(i)a and 3(b)(i)b
the net profits shall be annualized and the resulting Net Profits
Bonus payment shall be equal to the product of (x) the Net
Profits Bonus determined on such annualized net profits and
(y) a fraction, the numerator of which shall be the number of
quarters completed in the financial reporting period prior to the
termination and the denominator of which shall be four; it being
further understood that for purposes of Section 3(b)(i)(c), if
the termination occurs after September 30, 2007 but prior to
December 31, 2007, the net profits through the quarter ending
September 30, 2007 shall be multiplied by two and the
resulting Net Profits Bonus shall be equal to the quotient of
(x) the Net Profits Bonus determined on the basis of such net
profits and (y) two. The pro rated bonus hereunder shall be
payable within ten days of the termination date of this
Agreement.
(iv) Termination by the
Employee . If this Agreement is terminated by the Employee for
any reason (other than for Good Reason), the Employee shall be
ineligible for any Net Profits Bonus payment following the date of
termination, provided, however, if this Agreement is still in
effect on the last day of the fiscal year or other financial
reporting period on which a Net Profits Bonus is based, the
Employee shall remain eligible for a Net Profits Bonus payment for
such period in accordance with this Section 3.
(c) Maximum Amount Of Bonus
Payments . The aggregate of the Employee’s Net Sales
Bonus and Net Profits Bonus will in no event exceed
% of the
Employee’s Base Salary during any bonus period for which the
Net Sales Bonus and Net Profits Bonus are paid.
4. Stock Options . Subject to
the terms and conditions of the Company’s 2005 Stock Option
Plan (the “Plan”) and a Stock Option Agreement to be
executed by the Company and the Employee (the “Option
Agreement”), the Employee shall receive a grant of 25,000
stock options under the Plan (the “Options”) as of the
Effective Time. The Options shall be subject to vesting as set
forth in the Option Agreement which shall include, without
limitation, accelerated vesting in the event of a termination of
this Agreement without cause by the Company, for Good Cause by the
Employee and in the event of a Change in Control.
“ Change in Control
” shall mean (w) any person shall after the date hereof
become the beneficial owner, directly or indirectly, of securities
of the Company representing 50% or more
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of the voting or economic interest of all then
outstanding securities of the Company, (x) the consummation of
any corporate transaction, including a consolidation or merger, of
the Company in which the Company is not the continuing or surviving
entity, other than a consolidation or merger of the Company in
which the holders of the Company’s equity interest
immediately prior to the consolidation or merger shall, upon
consummation of the consolidation or merger, own at least 50% of
the equity interests
