DAVEL COMMUNICATIONS INC
EXHIBIT 10.2
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<TYPE>EX-10.2
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<FILENAME>l03445aexv10w2.txt
<DESCRIPTION>EXHIBIT 10.2
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EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

         This AGREEMENT (the "Agreement") is made and entered into effective as
of this 29th day of August 2003, by and between Davel Communications, Inc. (the
"Corporation") and Woody McGee ("Executive").

                                R E C I T A L S:

         WHEREAS, Executive was formerly employed as a consultant to the
Corporation and has been acting in the capacity of Chief Executive Officer since
the departure of the former Chief Executive Officer; and

         WHEREAS, the Corporation's Board of Directors (the "Board") recognizes
that Executive's contribution to the Corporation has been substantial. The Board
desires to provide for the employment of Executive as Chief Executive Officer of
the Corporation having determined that the services of Executive are of value to
the Corporation and further determined that Executive's employment is in the
best interest of the Corporation and its stockholders.

         WHEREAS, Executive is willing to commit himself to serve the
Corporation on the terms and conditions herein provided.

                              A G R E E M E N T S:

         NOW THEREFORE, in consideration of the foregoing recitals and of the
promises and respective covenants and agreements of the parties herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:

         1.       Employment and Services.

         During the term of this Agreement, Executive shall be employed as Chief
Executive Officer of the Corporation. As Chief Executive Officer, Executive
shall render administrative and management services to the Corporation such as
are customarily performed by persons

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situated in similar executive positions, and such other duties as the Board may
from time to time direct. During the term hereof, the Corporation shall use its
reasonable best efforts to maintain the Executive as a Director of the
Corporation, and shall include him in any management slate of Board nominees
proposed for election by the shareholders. In this connection, Executive agrees
to supply the Corporation with requisite information regarding his background as
is required by law for inclusion in any proxy or information statement
transmitted to shareholders of the Corporation pursuant to any state or federal
securities laws. Furthermore, during the term hereof, Executive agrees to serve
as the Chairman of the Board of Directors of the Corporation for such term of
office with respect to that position as the Board shall designate, without
separate compensation with respect to such position.

         2.       Term of Agreement.

         The term of this Agreement shall continue for a period of one year
commencing August 29, 2003 and ending on August 28, 2004 (the "Initial Term").
The Agreement shall automatically be extended for an additional one-year period
(the "Extended Term"), unless Executive is notified by the Board, at least
ninety (90) days prior to the expiration of the Initial Term, or any Extended
Term, that the term of this Agreement shall not be extended. In the event that
the Corporation does not renew this Agreement, then Executive would be entitled
to receive a severance payment equal to three (3) months' of the Executive's
salary. In consideration thereof, Executive agrees to be bound by the
non-solicitation and non-competition provisions contained herein in Section 8
hereof.

         3.       Obligations of Executive.

         Except as specifically set forth herein, Executive is a full-time
employee of the Corporation and, as such, shall devote his full time and
attention to the business and affairs of the Corporation as its Chief Executive
Officer and shall discharge his responsibilities herein in a faithful and
diligent manner. Executive may serve on corporate, civic or charitable boards or

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committees and may manage personal investments, so long as such activities do
not interfere in any material respect with the performance of his
responsibilities hereunder. It is acknowledged and agreed that Executive owns
and maintains a consulting business, and shall continue to own and maintain a
consulting business during the term hereof; provided, however, that Executive
shall be permitted to provide services in connection with his consulting
business so long as such services are not in any manner competitive to the
business of the Corporation and do not interfere or impede the discharge of the
Executive's obligations as Chief Executive Officer of the Corporation.
Furthermore, in this connection, Executive shall be permitted, unless his
involvement with the affairs of the Corporation is otherwise mandated by
circumstances or by the Board of Directors, to conduct his consulting business
during business hours, pursuant to the limitations prescribed above, for a
maximum of two (2) business days a month.

         4.       Compensation.

                  a.       Salary. During the Initial Term of this Agreement,
the Corporation shall pay Executive a salary of $250,000.00 per annum (the
"Salary") which shall be paid in bi-weekly installments in accordance with the
Corporation's normal payroll practices.

                  b.       Bonus. During the Initial Term of this Agreement,
Executive shall be entitled to earn an annual cash bonus (the "Annual Bonus")
based upon the financial performance of the Corporation and the attainment of
specific objectives established by the Board of Directors. The Annual Bonus for
the Initial Term will be determined as set forth in the Executive Bonus Plan
(the "Bonus Plan"), attached as Annex A hereto, which is incorporated herein by
reference. The Annual Bonus shall be paid to Executive as provided in the Bonus
Plan and shall be subject to withholding for any and all applicable federal,
state and municipal payroll taxes. In the event that there is to be an Extended
Term hereto, the parties shall negotiate in good faith with respect to the
parameters applicable for the bonus arrangement to be in effect during the
Extended Term.

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                  c.       Benefit Plans. Executive shall be entitled to
participate in all plans of the Corporation relating to pension, deferred
compensation, profit-sharing, group life insurance, or other retirement or
employee benefits that the Corporation may then have in force for the benefit of
its executive employees, and for which Executive is otherwise eligible;
provided, however, that, as an alternative to participating in the plan of the
Corporation with respect to health insurance or any additional welfare benefit
for which Executive is otherwise eligible, Executive may notify the Corporation
in writing that he shall obtain his own benefit plan. Thereafter, Executive
shall receive periodic reimbursement in such amount or amounts as would have
been expended by the Corporation for the participation of the Executive in the
Corporation's plan; provided, however, that by electing not to participate in
any benefit plan of the Corporation, Executive hereby waives any COBRA rights
with respect to any such plan upon termination of his employment with the
Corporation.

                  d.       Expense Reimbursement. In addition to the
compensation and benefits provided to Executive pursuant to subparagraphs a, b
and c hereof, and upon receipt of proper documentation in accordance with the
policy of the Corporation, the Corporation agrees to promptly reimburse
Executive for reasonable entertainment, travel, lodging, housing and other
miscellaneous expenses incurred on its behalf and related to the performance of
Executive's duties hereunder including reasonable and necessary commuting
expenses between Cleveland, Ohio and Executive's place of residence, currently
in Kentucky.

                  e.       Company Vehicle. The Corporation shall provide
Executive with a vehicle for business and personal use and shall pay for all
expenses incident to the operation of said vehicle including gasoline, insurance
and reasonable repairs and maintenance.

         5.       Vacations.

         Executive shall be entitled to one week of paid vacation for each
four-month period worked during the Initial Term or Extended Term of this
Agreement. No more than two

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consecutive weeks of such vacation time may be taken at any one time and all
vacation time must be preceded with two weeks' advance notification to the Board
of Directors. Executive shall also be entitled to all paid holidays given by the
Corporation to its executives. Executive shall not be entitled to receive any
additional compensation for his unused vacation time.

         6.       Termination of Employment.

         Executive's employment hereunder may be terminated without any breach
of this Agreement only under the following circumstances:

                  a.       Death. Executive's employment hereunder shall
terminate upon his death. If Executive's employment is terminated by his death,
the Corporation shall pay to Executive's spouse, or if he leaves no spouse, to
his estate or such other beneficiaries as he shall designate in writing to the
Corporation, any benefits which, pursuant to the terms of this Agreement or any
other benefit plan in which the Executive was a participant at the time of his
death, have been earned and have become payable but which have not yet been paid
to Executive.

                  b.       Disability. If Executive's employment terminates by
reason of Executive's Disability as defined in Paragraph 7 herein below, the
Corporation shall pay Executive any benefits which, pursuant to the terms of
this Agreement or any other benefit plan in which the Executive was a
participant at the time of his disability, have been earned and have become
payable but which have not yet been paid to Executive.

                  c.       Cause. The Corporation may terminate Executive's
employment hereunder for Cause, as such term is hereinafter defined. For
purposes of this Agreement, termination for Cause shall include termination
based on (i) Executive's material breach of this Agreement which is not cured
fully within ten (10) days after written notice to Executive identifying such
breach, provided that such ten (10) day period shall be extended to thirty (30)
days if such breach is not reasonably susceptible of cure within ten (10) days
and Executive has commenced to cure and is then proceeding with diligence to
cure such breach; (ii) conviction of

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Executive for (A) any crime committed during the Initial Term or Extended Term
of this Agreement constituting a felony in the jurisdiction in which committed,
(B) any crime committed during the Initial Term or Extended Term of this
Agreement involving moral turpitude (whether or not a felony) or (C) any other
act committed during the Initial Term or Extended Term of this Agreement against
the Corporation involving dishonesty or willful misconduct intended to or having
the effect of materially injuring the Corporation (whether or not a crime);
(iii) habitual and excessive use of alcohol or controlled substances other than
for therapeutic reasons; (iv) indictment of Executive by a grand jury for a
felony violation of the federal securities laws; or (v) Executive's gross
negligence in the performance of his duties. The Board shall have the authority
to make the determinations with respect to termination for Cause provided for
under this subparagraph. If Executive's employment shall be terminated pursuant
to this subparagraph, the Corporation shall pay Executive his full salary
through the date of termination at the rate in effect at the time notice of
termination is given and the Corporation shall have no further obligations to
Executive under the terms of this Agreement.

                  d.       Termination by Executive. This Agreement may be
voluntarily terminated by Executive at any time upon sixty (60) days' written
notice to the Corporation or upon such shorter period as may be agreed upon
between Executive and the Board. In the event of such termination, the
Corporation shall be obligated only to continue to pay Executive his salary up
to the date of termination and the Corporation shall have no obligations to
Executive under the terms of this Agreement with respect to those retirement
and/or employee benefits or bonus or severance amounts which may have been
earned or become payable through and including the date of such termination.

                  e.       Termination Without Cause. The Corporation may
terminate Executive's employment hereunder without cause, upon thirty (30) days'
prior written notice provided by the Corporation to the Executive; provided
however, that in the event the Corporation terminates

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Executive without cause during the Initial Term, Executive shall be entitled, as
Executive's sole and exclusive remedy for such termination, to a cash severance
payment (the "Severance Payment") from the Corporation equal to the sum of (a)
three months of the Executive's Salary at the rate in effect as of the date of
such notice and (b) the unpaid portion of any Savings Bonus earned by Executive
as of the date of such notice. The amount of Executive's Severance Payment may
be increased to reflect any additional bonus amounts earned and unpaid, at the
sole discretion of the Compensation Committee of the Board of Directors. The
amount of the Severance Payment shall be due and payable to Executive within ten
(10) business days of such termination and shall be subject to withholding for
any and all applicable federal, state and municipal payroll taxes. At the option
of the Corporation, the Executive shall leave the premises of the Corporation
upon receipt of notice of such termination; provided, however, that the
Executive shall receive his Salary during the 30-day notice period preceding the
effective date of such termination in addition to the Severance Payment.

                  f.       Disability. Executive shall be deemed to be disabled
and the Corporation may terminate this Agreement (i) if Executive shall, as a
result of a Disability fail to perform his obligations hereunder for any two (2)
months during a consecutive three (3) month period, or (ii) if Executive shall
become eligible for long-term disability benefits under the Corporation's
long-term disability policy. For purposes of this Agreement, "Disability" means
a physical or mental infirmity which prevents Executive from performing the
functions of his position under this Agreement.

         7.       Non-Solicitation and Non-Competition.

                  a.       Executive agrees that during the Initial Term or
Extended Term of this Agreement, and for a period of one (1) year after the
termination of this Agreement, he will not directly or indirectly:

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                           (i)      Solicit, divert or take away any of the
                  customers, business or patronage of the Corporation or its
                  subsidiaries or affiliates; or

                           (ii)     Induce or attempt to influence any employee
                  of the Corporation or its subsidiaries or affiliates to
                  terminate his or her employment therewith.

                  b.       Executive agrees that during the Initial Term or
Extended Term hereof and for one (1) year from the date of the termination of
Executive's employment hereunder, Executive shall not compete with the
Corporation, on behalf of himself or any other person, firm, business or
corporation, and he shall not directly or indirectly engage in the pay telephone
business. The scope of this provision shall include any and all customers of the
Corporation and any state served by the Corporation wherein it operates 250 or
more pay telephones at any time during the term hereof.

                  c.       In the event of a breach or threatened breach of
Executive of the provisions of this Paragraph 8, the Corporation, or any duly
authorized officer thereof, will be entitled to a temporary restraining order or
injunction from a court of appropriate jurisdiction.

         8.       Successors; Binding Agreement.

         This Agreement and all rights of Executive hereunder shall inure to the
benefit of and be enforceable by his personal or legal representatives,
successors, heirs, distributees, devisees, legatees and permitted assigns. This
Agreement and all rights of the Corporation hereunder shall inure to the benefit
of and be enforceable by its successors and permitted assigns.

         9.       No Assignment.

         This Agreement is personal to Executive and Executive shall not assign
or delegate any of its rights or obligations hereunder without first obtaining
the written consent of the Corporation.

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         10.      Arbitration.

         Any controversy or claim arising out of or relating to this Agreement,
or the claimed breach thereof, shall be settled by arbitration in the State of
Ohio, in accordance with the then pertaining Commercial Arbitration Rules of the
American Arbitration Association. Judgment upon, or enforcement of, any award or
remedy may be had in any court having jurisdiction thereof. The arbitration
shall be conducted by three (3) arbitrators, one (1) to be appointed by each of
the parties, and the two (2) arbitrators so selected shall appoint a third
arbitrator. In the event of their inability to agree upon a third arbitrator, a
third arbitrator shall be appointed pursuant to the provisions of said Rules.

         11.      Notices.

         All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered by hand
or mailed certified or registered mail, return receipt requested with postage
repaid, to the following addresses or to such other address as either party may
designate by like notice.

                  a.       If to the Corporation, to:

                           Davel Communications, Inc.
                           1001 Lakeside Avenue, 7th Floor
                           Cleveland, Ohio 44114
                           Attention:  General Counsel

                  b.       If to Executive, to:

                           Woody McGee
                           2263 Kyle Drive
                           Hebron, Kentucky 41048

and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.

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         12.      Amendments.

         No amendments or additions to this Agreement shall be binding unless in
writing and signed by both parties except as herein otherwise provided.

         13.      Paragraph Headings.

         The Paragraph headings used in this Agreement are included solely for
convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.

         14.      Severability.

         The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provisions shall not affect the validity
or enforceability of the other provisions hereof.

         15.      Governing Law.

         This Agreement shall, except to the extent that Federal law shall be
deemed to preempt it, be governed by and construed and enforced in accordance
with the laws of the State of Ohio.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.

DAVEL COMMUNICATIONS, INC.

By:  /s/ James N. Chapman                   /s/ Woody McGee
    -----------------------------------     -----------------------------------
Its:  Director                              WOODY McGEE, an individual

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                         ANNEX A TO EMPLOYMENT AGREEMENT

                              EXECUTIVE BONUS PLAN

                                WOODY McGEE, CEO

                 DAVEL COMMUNICATIONS, INC. (THE "CORPORATION")

The purpose of this plan is to reward Executive for his efforts in managing the
Corporation to improve its EBITDA in a manner that exceeds the budgeted EBITDA
of the Corporation and to incent Executive to carry forth certain strategic
initiatives at the direction of the Board of Directors.

Operation Improvement Bonus Opportunity

During the term of the Agreement, it is anticipated that the Executive shall
implement cost reduction initiatives (the "Cost Reduction Initiatives") that may
potentially yield a minimum annual savings of six million dollars ($6,000,000).
The Cost Reduction Initiatives and resulting savings shall be reviewed by the
Compensation Committee of the Board Of Directors on a quarterly basis. The
Executive shall be compensated an amount equal to fifty thousand dollars
($50,000) for each one million dollars ($1,000,000) of savings achieved from the
Cost Reduction Initiatives (each, a "Savings Bonus"). Fifty percent (50%) of
each Savings Bonus shall be deemed earned by Executive upon Executive's
implementation of the Cost Reduction Initiative and the remaining fifty percent
(50%) shall be earned when the savings are realized by the Corporation,
providing such savings are realized within twelve (12) months following the
implementation of such Cost Reduction Initiative. The Savings Bonus payments
shall be made on a quarterly basis as approved by the Compensation Committee and
shall be applied dollar-for-dollar to reduce the amount of the Minimum Bonus
Amount otherwise payable at the end of the applicable six-month period, as
described above. The determination of any Cost Reduction Bonus made hereunder by
the Committee shall be conclusive and binding on the Executive.

Notwithstanding the foregoing the Executive shall earn a minimum bonus amount of
$150,000 (the "Minimum Bonus Amount") due upon completion of six months of
service, regardless of the outcome of Executive's efforts in attempting to
implement the Cost Reduction Initiatives. The amount, if any, payable to
Executive in excess of the Minimum Bonus Amount for any six-month period shall
be the amount by which the Savings Bonus or Bonuses payable for the subject
period, as set forth in the foregoing paragraph, exceed the Minimum Bonus Amount
for the such period.

Strategic Initiative Bonus Opportunity

The objectives of the Executive Bonus Plan also include providing an incentive
to the Executive to carry out various potential major strategic and financial
initiatives that may be available to maximize stakeholder value (the "Strategic
Initiatives") at the direction of the Board of Directors. Examples of Strategic
Initiatives include, but are not limited to: the consummation of a merger of the
Company with another entity or the sale of all or substantially all of the
assets of the Company. In the event that a Strategic Initiative assigned by the
Board to the Executive is successfully completed, the Executive shall receive a
bonus in an amount not less than two

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hundred and fifty thousand dollars ($250,000) in connection with such
completion, with the determination of the any payment in excess of such minimum
amount to be at the sole discretion of the Compensation Committee.

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