EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day July, 1997, by and between Century
Communications Corp., a New Jersey corporation, with offices at 00 Xxxxxx
Xxxxxx, Xxx Xxxxxx, Xxxxxxxxxxx 00000 (the "Company"), and Xxxxxxx Xxx of 000
Xxxxxxx Xxxxx Xxxx, Xxx Xxxxxx, Xxxxxxxxxxx 00000 ("Tow").
WHEREAS:
A. Under date of February 11, 1986 the Company entered into an
employment agreement with Tow (the "Prior Employment Agreement") wherein Tow was
employed as the chief executive, financial and operating officer of Century for
a term which terminates on June 30, 1998 and which Prior Employment Agreement
was amended by an "Amended Employment Agreement" entered into by the Company and
Tow as of July 1, 1991. The Prior Employment Agreement and the Amended
Employment Agreement are together sometimes referred to as the "Prior
Agreement".
B. Tow is presently acting as chief executive officer and Chairman
of the Board of the Company, the Company with Tow's consent having designated
other individuals to act as chief financial officer and chief operating officer
of the Company.
C. The Company has requested Tow to extend the Prior Agreement for a
period of five years from its expiration date of
June 30, 1998 so that Tow's full-time employment with the Company as its chief
executive officer expires on June 30, 2003 followed by an advisory period of
five years.
D. Tow is willing to extend and renew the Prior Agreement as provided in
Recital "C" provided that in partial consideration for his entering into this
agreement and upon execution of this agreement, he is awarded 125,000 shares of
the Company's Class A Common Stock under the Company's 1992 Management Equity
Incentive Plan and 25,000 of the Company's Class B Common Stock subject to
substantially the same restrictions on disposition as set forth in said Plan,
with all restrictions on transfer to lapse on the January 1st immediately
succeeding the later of the termination of (i) Tow's term of Full-Time
Employment (as hereafter defined) and,(ii) the termination of the Advisory
Period (as hereafter defined), that the Registration rights referenced in the
Prior Agreement be maintained as expanded by the provisions of this agreement
and that the Company agree to the other provisions set forth in this agreement,
including, without limitation, Tow's base salary, which he is currently
receiving under the Prior Agreement.
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E. The Company is willing to award the shares referenced in Recital D, to
maintain the registration rights referenced in the Prior Agreement as expanded,
and to agree to the other provisions set forth in this agreement including
without limitation the setting of Tow's base salary as set forth in Recital D.
NOW, THEREFORE, for good and valuable consideration, each to the other
in hand paid, and the receipt and adequacy of which is hereby mutually
acknowledged, it is agreed as follows:
SECTION 1. Employment;Issuance of Shares
(a) Simultaneous with the execution and delivery of this Agreement,
the Company shall issue to Tow 125,000 shares of its Class A Common Stock
pursuant to the Company's 1992 Management Equity Incentive Plan, which shares
shall be restricted from sale, exchange, transfer, pledge, hypothecation or
other disposition during the period from the date of issuance until the January
1st immediately succeeding the later of (i) the termination of Tow's term of
Full-Time Employment, as hereafter defined and (ii) the termination of the
Advisory Period, as hereafter defined (the "Restricted Period"), at which time
said restrictions shall lapse, and additionally, shall issue to Tow 25,000
shares of the its Class B Common Stock which shares shall
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be restricted from sale, exchange, transfer, pledge, hypothecation or other
disposition in substantially the same manner as said Class A shares during the
Restricted Period, at which time all of said restrictions on both Class A Shares
and the Class B Shares shall lapse.
(b) The Company hereby employs and continues to employ Tow, and Tow
hereby accepts and agrees to continue his employment, as the chief executive
officer of the Company. During the Term of Full-Time Employment, as hereafter
defined, Tow's duties and authority shall include, without limitation, the
supervision, management and control of and responsibility for all policy,
financial, operating and other aspects of the business, activities and affairs
of the Company, subject only to such authority and responsibility which under
applicable law cannot be delegated, and which may only be exercised, by the
board of directors. Tow's powers and authority shall be superior to those of any
other officer or employee of the Company and Tow shall report only to the board
of directors of the Company. Tow is currently Chairman of the Board of the
Company and a member of the board of directors of the Company. It is the
intention that Tow shall be elected and re-elected Chairman of the Board of the
Company as well as a director of the Company for the duration of
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the Term of Full-Time Employment, as defined, and Tow agrees to serve in each
such capacity, and to the full extent permitted by applicable law, Tow shall be
elected and re-elected Chairman of the Board and a member of the board of
directors of the Company during the Term of Full-Time Employment. During the
Term of Full-Term Employment, except as permitted by Section 7 or employment by
a subsidiary or affiliate of the Company, Tow agrees to devote his services
exclusively to the business and activities of the Company.
(c) During the term of the Advisory Period, as hereafter defined,
Tow will provide such advisory services concerning the business, affairs and
management of the Company as may be requested by the Company's board of
directors, but shall not be required to devote more than 25 hours each month to
such services, which shall be performed at a time and place mutually convenient
to both parties. Tow may engage in other full-time employment during the
Advisory Period (other than with a company then in competition with the business
of the Company, it being understood and agreed that being employed or engaged by
Citizens Utilities Company or any of its subsidiary or affiliated companies
(including without limitation Electric Lightwave, Inc. and Hungarian Telephone &
Cable Corp.) shall not be or be deemed
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to be employment with or being engaged by a company in competition with the
Company) and his advisory services under this Agreement shall be required only
at times and places consistent with his other employment or with his private
activities. It is agreed further and without limitation that such advisory
services may be rendered, at Tow's request, by means of telephonic communication
or other communication facilities or devices. If requested by the Company's
board of directors, Tow will serve as a member of the Company's Board of
Directors during the Advisory Period.
SECTION 2. Term. Tow's Term of full-time employment (the "Term of
Full-Time Employment") shall commence July 1, 1997 (the "Commencement Date"),
and shall terminate on June 30, 2003. Tow's "Advisory Period," except as
otherwise set forth in Section 8(c), shall be the period commencing immediately
upon the expiration of the Term of Full-Time Employment and continuing for five
consecutive years thereafter. The "Employment Term" shall mean the term
commencing with the Commencement Date and continuing through the end of the
Advisory Period.
SECTION 3. Compensation.
(a) The Company shall pay to Tow, for each year of the Term of
Full-Time Employment, a salary (the "Base Salary")
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of $2,059,073 (being the same Base Salary, prior to awarding of any bonus, which
Tow is currently receiving under the Prior Agreement) subject only to such
withholdings as may be required by applicable law; provided, however, that
notwithstanding the foregoing, the Base Salary for each year of the Term of
Full-Time Employment and the Advisory Period shall be increased by the
following:
The Salary for each year of the Term of Full-Time Employment and the
Advisory Period (the "Applicable Year") shall be increased by the
percentage increase in the Consumer Price Index prepared by the
United States Labor Department for the United States as a whole, or
equivalent measure of increase in the cost of living if such
Consumer Price Index is not then being issued (hereafter sometimes
referred to as the "Consumer Price Index"), for the last calendar
month in such Applicable Year over and above such Consumer Price
Index for the last full calendar month immediately preceding the
commencement of the Applicable Year. Such increase is sometimes
referred to as the "Additional Salary."
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The methodology to be utilized in computing the Additional Salary pursuant
to the aforementioned formula shall be the methodology heretofore utilized in
determining Additional Salary pursuant to the Prior Agreement.
(b) During each year of the Advisory Period, Tow shall receive and
the Company shall pay Tow in equal monthly installments on the first day of each
month a fixed amount equal to 25% of the total compensation (including but not
limited to bonuses) paid or payable to Tow for the most recent year of Full-Time
Employment immediately preceding the commencement of the Advisory Period, to be
increased each year by reason of increases in the Consumer Price Index, as set
forth in sub-section (a).
SECTION 4. Place and Time of Services. During the Term of Full-Time
Employment, Tow shall render his services generally in, and shall not be obliged
to maintain his office in any place other than, the New York City metropolitan
area or Fairfield County, Connecticut. Tow agrees to take such trips outside of
such area as shall be reasonably necessary in connection with his duties. In
addition to the other payments provided for hereunder, the Company will pay
Tow's transportation, living and other expenses in connection with each such
trip and return to such area. Tow's wife may accompany him on each of said
trips, and all
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transportation, living and other expenses relating to Tow's wife in connection
with each such trip and return to such area shall be paid by the Company.
Transportation provided to Tow and his wife shall be first class (or at Tow's
option chartered aircraft), provided that if during the Employment Term, the
Company owns, leases or otherwise has aircraft available to it such aircraft, at
Tow's option, may be utilized by and shall be made available to Tow and his
wife. Hotel accommodations shall be deluxe.
SECTION 5. Business Expenses; Accouterments of Office, Insurance and Other
Benefits.
(a) The Company agrees that all expenses, including without
limitation, travel and business entertainment expenses, incurred by Tow on
behalf of or in the conduct of the business of the Company will be fully and
promptly paid, and if not paid, reimbursed to Tow by the Company upon reasonable
substantiation.
(b) During the Employment Term, Tow shall be entitled to continue to
participate in all employee benefit plans (including without limitation, stock
option,
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medical, dental, major medical, disability and life insurance, incentive award,
profit sharing and pension plans) that may from time to time be generally
available to executive employees of the Company and in accordance with the
provisions thereof.
(c) Additionally, the Company shall continue to provide and maintain
the life insurance policies on Tow and his wife under the split-dollar insurance
arrangement effected and entered into between the Company and Tow under date of
July 30, 1992 as referenced in Section 10(b).
SECTION 6. Vacation. Tow shall be entitled to vacations in each year of
the Term of Full-Time Employment at times reasonably agreeable to both Tow and
the Company.
SECTION 7. Exclusivity.
(a) Except as permitted in this Section 7 or employment by a
subsidiary or affiliate of the Company, during the Term of Full-Time Employment
Tow agrees to devote his services exclusively, and his best energies and
abilities, to the business and activities of the Company; provided, however,
that nothing in this agreement or elsewhere shall prevent Tow, during
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the Term of Full-Time Employment, from (i) overseeing his personal and family
investments or investing in other businesses provided, in each of such
instances, subject to the provisions of clause (ii) below, that same are not
competitive with any business then being conducted by the Company or any of its
subsidiaries; (ii) investing in any business, the shares of stock of which are
traded on a national or a regional securities exchange, or over NASDAQ or the
over-the-counter market, even if such business is competitive with any business
then being conducted by the Company or any of its subsidiaries, provided that
Tow's stock interest in any such business is not a controlling or substantial
interest and does not in any event exceed 5% of the voting power of any such
business, or investing in any mutual or similar-type investment fund; (iii)
serving as a director of any corporation which is not engaged in a business
competitive with the business then being conducted by the Company (iv) serving
as Chief Executive Officer, Chairman of the Board, or other officer, and/or as a
director of Citizens Utilities Company or any of its subsidiary or affiliated
companies, including but not limited to Electric Lightwave, Inc. and Hungarian
Telephone and Cable Corp., (all referred to as "Citizens Utilities") at the same
time that he is serving as a
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director, Chief Executive Officer, Chairman of the Board and/or other officer of
the Company, it being expressly agreed that the rendering of such services to
Citizens Utilities is expressly authorized.
SECTION 8. Termination in Certain Events.
(a) If, during the Term of Full-Time Employment, Tow should become
disabled, through illness or otherwise, and by reason thereof is unable to
perform his duties hereunder, Tow shall be entitled to a leave of absence from
the Company for the duration of any such disability up to but not exceeding an
aggregate of twelve consecutive months. Tow's compensation and status as an
employee hereunder and as Chairman of the Board and Chief Executive Officer
shall continue during any such leave of absence. Tow shall be deemed to be
permanently incapacitated only if and when a leave of absence for disability
shall have continued for more than twelve consecutive months. If Tow becomes
permanently incapacitated during the Term of Full-Time Employment, as above
defined, the Company shall have the right to terminate this Agreement, and if
the Company exercises such right then all future payments by the Company under
Section 4 hereof shall cease except for and subject to the provisions of
Paragraph
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(c) of this Section 8. This Agreement shall also terminate at the death of Tow
during the Term of Full-Time Employment in which event the payments provided for
in Paragraph (c) of this Section 8 shall become due and payable.
(b) Except as may be provided in Paragraph (a) of this Section 8,
the Company shall have the right to terminate Tow's employment hereunder only
for "cause", limited to an action by Tow during the Term of Full-Time Employment
(i) involving material breach of Tow's obligations as Chief Executive Officer
under Section 1 of this Agreement, or (ii) willful malfeasance in office or
gross misconduct which at the time of such willful malfeasance or gross
misconduct has a materially injurious effect on the Company's business;
provided, however, that such termination shall be effected only by notice
thereof delivered by the Company to Tow, specifying in detail and setting forth
particulars of the basis for termination, and shall be effective subject to the
immediately succeeding clause, as of the date which is 30 business days after
receipt of such notice by Tow; provided, however, that if (i) within 20 business
days following the date of receipt of such notice, Tow shall cease his refusal
or actions (of commission or omission) which are particularized as wilful
malfeasance or gross misconduct and shall use his best
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efforts to perform such obligations or correct such action (or commence and
diligently pursue the performance of such obligations or correction), the
termination shall not be effective, and provided further that in the event Tow
is disputing the existence of a basis for termination for cause, as above
defined, the Company shall not have the right to proceed with the termination of
or to terminate this Agreement (subject to such termination not being effective,
as above provided) until a court, having jurisdiction, has issued a final
non-appealable order finding the existence of "cause."
(c) Anything in Paragraph (a) of this Section 8 to the contrary, it
is agreed that upon the termination of this Agreement by reason of permanent
incapacity as provided in sub-paragraph (a) or death of Tow during the Term of
Full-Time Employment, there shall be paid to Tow, if incapacitated (or his legal
representative(s) if a conservator or guardian of his person has been appointed)
or, in the instance of his death, to the person or persons as may be designated
by Tow during his lifetime, and in the absence of such designation to the legal
representative(s) of the estate of Tow, in 36 equal monthly installments, the
first of such installment payments to be made on the first day of the second
full calendar month following the
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death or permanent incapacity of Tow and the other installment payments to be
paid on the first days of the immediately succeeding 35 months, an aggregate
amount equal to the sum of (i) three times (five times if such death or
incapacity occurs during the first year and four times if such death or
incapacity occurs during the second year of the Term of Full-Time Employment),
the annual salary which would have been payable to Tow during the year of
permanent incapacity or death (assuming he were not permanently incapacitated or
did not die during such year and fully rendered his services), and which salary
shall include any additions thereto by reason of the provisions of Section 3
with respect to the Consumer Price Index, and for the purposes of this Section
8(c) shall include a bonus payment equal to the bonus paid to Tow in the
immediately preceding year of the Term (or if death or incapacity occurs during
the first year of the Term of Full-Time Employment, the bonus paid during the
year immediately preceding the commencement of the Term under the Prior
Agreement plus (ii) the amounts that would have been payable to Tow during the
Advisory Period assuming he were alive and not permanently incapacitated and
performed fully all of his obligations to the Company during the Advisory
Period. Additionally, the Company (i) shall continue in force and at the
Company's expense the health,
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hospital and medical and dental care, insurance and similar benefits included in
the benefits provided for in Sections 5(b) and 10(b) and any additional benefits
which the Company was then providing to Tow, and (ii) shall pay to Tow the
difference between the exercise price contained in any option held by Tow to
acquire common shares of the Company (whether Class A or Class B) and the fair
value of such shares measured by the market value of the Class A Common Shares
of the Company (or any class of shares issued in substitution therefor then
being traded publicly) based on the mean average of the closing market prices of
such shares for the 20 trading-day period commencing on the termination of this
Agreement, if the Class A Shares (or the class of shares issued in substitution
therefor, as above provided) are traded on an exchange, or the mean average of
the bid and asked prices of such shares during such 20 trading-day period, if
such shares are traded in the over-the-counter market, and any shares of the
Common Stock of the Company which were therefore granted to Tow under the
Company's 1992 Management Equity Plan and which still contain restrictions on
transfer shall be and be deemed to be free of any and all of such restrictions
and fully vested.
(d) In the event Tow becomes permanently incapacitated as defined in
paragraph (a) of this Section 8,
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during the Advisory Period, or dies during the Advisory Period, the Advisory
Period shall then terminate but the Company shall nevertheless continue to pay
to Tow (or his guardian, if applicable) or his estate or legal representatives,
as applicable, the monies that would otherwise have been payable to Tow during
the Advisory Period had he been alive, not incapacitated and fully performing
all of his obligations to the Company and rendering the advisory services as
provided for in this Agreement, and in addition the provisions of subdivisions
(i) and (ii) of Section 8(c) shall be applicable.
SECTION 9. Specified Breach.
(a) If at any time during the Term of Full-Time Employment the board
of directors of the Company shall fail to designate, elect and continue Tow as
Chairman of the Board and chief executive officer, or shall remove Tow, without
his prior written consent, from any of such offices, or if the principal offices
of the Company are located outside Fairfield County, Connecticut or the New York
City Metropolitan area, or in the event the Company otherwise breaches any of
its obligations hereunder, Tow shall have the right, without limitation of his
rights and remedies, to terminate this Agreement on notice to the
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Company, effective as of the last day of the month of the giving of such notice,
and despite such termination and as and for liquidated damages and not as a
penalty, (i) the Company shall continue to pay and Tow shall be entitled to
continue to receive, without diminution of any kind or for any reason, the
payments of Salary provided for herein (including increases provided in Section
3) as if this Agreement continued through the Term of Full-Time Employment,
although Tow shall not be required to render services hereunder, and he shall
also be entitled to all payments to be made to him during the Advisory Period
without diminution and without having to render any services hereunder, it being
understood and agreed that salary for the purposes of this Section 9(a) shall
include cash bonuses payable to Tow during the Term of Full-Time Employment
assuming in each of the years of such Term other than the first year of such
Term, he would have been awarded a bonus equal to the bonus most recently paid
to him and that for the first years of the Term he would have been paid a bonus
equal in amount to the bonus paid him in the most recent year of the Prior
Agreement (ii) the Company shall continue in force and at the Company's expense
the health, hospital and medical and dental care, insurance and similar benefits
included in the benefits provided for in Sections 5(b)
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and 10(b) and any additional benefits which the Company was then providing to
Tow; (iii) without cost to Tow, for a period of one year following such
termination, the Company shall provide Tow with an office and the equipment and
accoutrements of office which were being furnished to Tow at the time of such
termination, (iv) the Company shall pay to Tow the difference between the
exercise price contained in any option held by Tow to acquire common shares of
the Company (whether Class A or Class B) and the fair value of such shares
measured by the market value of the Class A Common Shares of the Company (or any
class of shares issued in substitution therefor then being traded publicly)
based on the mean average of the closing market prices of such shares for the 20
trading-day period commencing on the termination by Tow of this Agreement, if
the Class A Shares (or the class of shares issued in substitution therefor, as
above provided) are traded on an exchange, or the mean average of the bid and
asked prices of such shares during such 20 trading-day period, if such shares
are traded in the over-the-counter market; and (v) any shares of the Common
Stock of the Company which were therefore granted to Tow under the Company's
1992 Management Equity Plan and which still contain restrictions on transfer
shall be and be
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deemed to be free of any and all of such restrictions and fully vested.
In the event the Company terminates this Agreement other than for cause
and other than by reason of the permanent incapacity of Tow, Tow shall be
entitled to receive and be paid and afforded the same payments and benefits set
forth above in this Section 9(a) in the instance of Tow terminating this
Agreement pursuant to this Section 9(a), and the Company shall make such
payments to Tow and afford him such benefits.
(b) Tow shall have the right in his sole discretion to cause the
Company to pay to Tow the present value of all or certain of the aforementioned
payments to be made to him under any of all of the subdivision (i) of Section
9(a) above, said present value to be determined by negotiation between Tow and
the Company and if Tow and the Company do not or cannot reach agreement on said
present value, same shall be the mean average of such present value determined
by three separate banking institutions, one selected by Tow and one by the
Company (each from the list of institutions set forth in Schedule A) and the
third of which shall be selected by the two banks selected by Tow and the
Company. The expenses and charges of said banks for making said evaluation shall
be paid by and the responsibility of
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the Company and payment of the determined amount shall be made by the Company
within 20 days following the determination.
(c) In the event that during the Advisory Period the Company
breaches its obligations to Tow, including without limitation, failure or
refusal to make payments to Tow as provided for in Section 3 Tow shall be
entitled to receive from the Company, in addition to any and all of his other
rights and remedies, in one lump sum, an amount equal to the balance of monies
payable to Tow for the balance of the Advisory Period, assuming he performed
fully all of his obligations to the Company during the Advisory Period.
Additionally, the provisions of subdivisions (ii), (iii) and (iv) of Section
9(a) shall also be applicable.
SECTION 10. Key Man Insurance; Split Dollar Insurance.
(a) Tow agrees that during the Term of Full-Time Employment the
Company may apply for and maintain, at the Company's expense, additional
insurance on Tow's life, with the benefits being payable to the Company, and Tow
agrees to submit to such physical examinations as may be required by the
21
particular carrier to enable it to consider effectuating such insurance. At the
end of the Term of Full-Time Employment, Tow in his discretion may purchase the
applicable policy or policies of insurance at the then cash surrender value
thereof.
(b) Under date of July 30, 1992, the Company and the Xxxxxxx and
Xxxxxx Xxx Insurance Trust entered into an agreement pursuant to which certain
life insurance was effected on the lives of Tow and his wife, Xxxxxx Xxx. The
plan pursuant to such insurance was effected is commonly referred to as a
split-dollar insurance plan, with the insurance sometimes referred to as
"split-dollar insurance". The agreement is referred to herein as the "Insurance
Agreement". To induce Tow to enter into this Employment Agreement the Company
(i) confirms and ratifies the Insurance Agreement and its obligations thereunder
and agrees that a breach or default by the Company under or pursuant to the
Insurance Agreement shall be deemed a breach or default by the Company under
this Agreement, and (ii) agrees that, upon the request of Tow or his legal
represenatives, upon the termination of Tow's employment with the Company, for
any reason, or upon a threatened or actual change in control of the Company, as
referenced in Section 13, the Company shall forthwith pay in full all premiums
due on all of the policies of
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split dollar insurance so that all of such policies are fully paid-up policies
requiring no further payment of premiums or other monies of any kind or nature.
SECTION 11. Registration Rights. Pursuant to the Prior Agreement, the
Company agreed to register certain shares held by Tow and certain trusts for the
benefit of certain members of Tow's family. As an inducement to Tow to enter
into this Agreement, the Company ratifies and confirms its obligations to
register shares held by Tow and such Trusts and agrees to register such shares
as provided for in Schedule B annexed to this Agreement. Schedule B increases
the number of shares which the Company was obligated to register under the Prior
Agreement. Additionally, Schedule B repeats and reiterates, in essential part,
the registration obligations of the Company under and pursuant to the Prior
Agreement and in particular, Schedule A thereof.
SECTION 12. Notices. Except as may herein otherwise be provided, all
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
if mailed, first class postage prepaid, registered or certified mail, return
receipt
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requested, or if sent by telecopier or overnight express delivery service, (a)
to Tow at 000 Xxxxxxx Xxxxx Xxxx, Xxx Xxxxxx, XX 00000 (telecopier (203 972
2821) or at such other address as Tow may have notified the Company, sent by
registered or certified mail, return receipt requested, or by telecopier or
overnight express delivery service, or (b) if to the Company at 00 Xxxxxx
Xxxxxx, Xxx Xxxxxx, XX 00000 (Telecopier (000)-000-0000), attention: Office of
the President, or at such other address as the Company may have notified
Employee in writing sent by registered or certified mail, return receipt
requested or by telecopier or overnight express delivery service, and with a
copy to Xxxxx, Xxxxxxxxxx & Xxxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000
(Attention: Xxxxx X. Xxxxxxxxxx, Esq., telecopy (000) 000-0000). Notice shall be
deemed given (i) upon personal delivery, or (ii) on the second business day
immediately succeeding the posting of same, prepaid, in the U.S. mail, (iii) on
the date sent by telecopy if the addressee has compatible receiving equipment
and provided the transmittal is made on a business day during the hours of 9:00
A.M. to 6:00 P.M. of the receiving party and if sent on other times, on the
immediately succeeding business day, or (iv) on the first business day
immediately
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succeeding delivery to the express overnight carrier for the next business day
delivery.
13. Change of Control; Termination.
13.1 A "Change in Control" of the Company shall be deemed to occur (A)
when any person or group of affiliated or related persons (other than a group of
which Tow or an entity controlled by Tow is a participant and other than an
employee benefit plan (or related trust of the Company) acquires, directly or
indirectly, voting securities or assets of the Company if, immediately after
giving effect to such acquisition, such person or group of affiliated or related
persons (i) beneficially owns 9% or more of the total voting power of all of the
Company's voting securities outstanding at the time of such acquisition,or stock
having a fair market value of 9% or more of the fair market value of the
Company's issued and outstanding stock or (ii) otherwise effectively controls
the operations of the Company, whether by control of its Board of Directors, by
contract, or otherwise, or (B) upon the consummation of a reorganization, merger
or consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and
25
entities who were the beneficial owners, respectively, of the outstanding shares
of the Company's common stock and outstanding shares of the Company's voting
securities immediately prior to such Business Combination, beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation, resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business Combination,
of the outstanding shares of the Company's common stock and outstanding shares
of the Company's voting securities, as the case may be, (ii) no person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 9% or more of, respectively, the then outstanding shares of common
stock of the Corporation resulting from such Business Combination
26
or the combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting form such Business Combination were
members of the board of directors of the Company at the time of the execution of
the initial agreement provided for the Business Combination, or of the action of
the Board, providing for such Business Combination, whichever is earlier, or (C)
when a majority of the members of the Board of Directors of the Company is
replaced during a 12-month period by directors whose appointment or election was
not endorsed by the prior Board. Without limitation, a "Threatened Change in
Control" shall be deemed to have occurred when any person or group of persons
acquires such ownership of securities of the Company that such person or group
files or is required to file Forms 13D and 13G or otherwise files or is required
to make a filing pursuant to Regulation 13d under the Securities and Exchange
Act of 1934, as amended.
13.2 In the event of a Threatened Change in Control or a Change in
Control, as defined in Sub-Section 13.1,
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Employee shall have the right to terminate this Agreement on not less than ten
days notice to the Company (or to the successor in interest or the acquirer of
the assets or interests of the Company, or the surviving Company in the instance
of a business combination if same is not the Company) in which event Employee
shall be entitled to the same monies and benefits to which Employee would be
entitled in the event the Company terminated this Agreement and Employee's
employment, other than for cause, as provided in Section 9(a).
13.3 In the event any of the payments provided in this Section 13 or
pursuant to Section 9(a) is determined by the United States Internal Revenue
Service to be an "Excess Parachute Payment" under Section 280G of the United
States Internal Revenue Code of 1986, as amended (the "Code"), the Company shall
pay Employee additional amounts (the "Tax Payment") to make him whole, on an
after-tax basis (based on the highest applicable federal, state and local income
tax rates and after giving effect to the Federal Deduction arising from such
state or local income taxes), for any excise tax under Section 4999 of the Code
imposed with respect to such Excess Parachute Payments.
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SECTION l4. Miscellaneous.
(a) This Agreement constitutes the entire understanding of the
parties and supersedes any and all prior agreements and understandings, whether
oral or written, between the parties hereto. This Agreement may be modified only
by an agreement in writing executed by both of the parties hereto;
(b) This Agreement is being delivered in the State of Connecticut
and the rights and liabilities of the parties shall in all respects be
interpreted, construed, enforced and governed by, under and in accordance with
the laws of the State of Connecticut applicable to agreements executed and fully
to be performed therein, without any reference to any rules of conflicts of
laws.
(c) The waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed as a continuing waiver or as a
consent to or waiver of any subsequent breach thereof. Any and all waivers must
be in writing.
(d) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, representatives, successors and
permitted assigns. This Agreement shall only be assignable by the Company to a
subsidiary
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or to a company controlled by the Company or to any person, firm or corporation
into or with which the Company may merge or consolidate or which acquires by
purchase or otherwise all or substantially all of the Company's assets, and it
must be so assigned by the Company in connection with such merger, consolidation
or acquisition, and such assignee must affirmatively assume all the obligations
of the Company hereunder and such Assignee shall be obligated to perform all of
the terms and conditions hereof, and the Company shall remain liable despite any
such merger, consolidation or acquisition. This Agreement and Tow's rights and
obligations may not be assigned or delegated by Tow except that any payments due
to Tow may be assigned by Tow.
(e) The title of the sections of this Agreement are for convenience
of reference only, and are not to be considered in construing this Agreement.
(f) Nothing herein shall preclude such increases in Tow's
compensation including bonuses, incentive awards, options and other payments or
benefits as the Board of Directors (or appropriate committee of the Board of
Directors) of the Company may approve in its sole discretion.
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(g) Each party hereto shall make, execute and deliver such other
instruments or documents as may be reasonably required in order to effectuate
the purposes of this Agreement.
(h) For the purposes of authority granted to Tow under and pursuant
to the provisions of Section 1, the term Company shall mean and include all
subsidiaries of the Company and all companies controlled by the Company.
(i) If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner
that is not invalid, illegal or against public policy, to the end that
transactions contemplated hereby are fulfilled to the greatest extent possible.
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The payments provided for by reason of termination pursuant to Sections 8,
9 and 13 are and are deemed to constitute fair and reasonable provisions for the
consequences of such termination and do not constitute a penalty.
(j) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(k) This Agreement shall be effective as of the date specified
herein.
(l) No provision of this Agreement shall be construed against a
party hereto by reason of this Agreement and/or the particular provision thereof
having been prepared or drafted by a representative of such party.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
CENTURY COMMUNICATIONS CORP.
By: /s/ [Signature]
----------------------------------
President
/s/ Xxxxxxx Xxx
----------------------------------
XXXXXXX XXX
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SCHEDULE "A"
1. Citibank, N.A.
2. The Chase Bank, N.A.
3. Bankers Trust Company
4. Continental Illinois National Bank & Trust
Company of Chicago
7. Bank of America National Trust and Savings
Association
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SCHEDULE "B" -- REGISTRATION RIGHTS
Tow's "registration" rights shall be as follows:
A. "Piggyback" Registrations. If the Company at any time proposes to
register any of its securities under the Securities Act of 1933, as amended (the
"Securities Act"), on any form upon which may be registered securities similar
to the securities (the "Registrable Securities") held by Tow and by two trusts
for the benefit of certain members of Tow's family and denominated Tow Trust #1
and Tow Trust #2 (the "Holders" and each a "Holder"), for sale to the general
public, the Company will at each such time give prompt notice to each of the
Holders (notice to Trust #1 and Trust #2 shall be given at their addresses set
forth below) of its intention. Upon the request of any Holder given within 30
days after the Company has given such notice, the Company will cause each of the
Registrable Securities which the Company has been requested to register under
the Securities Act, all to the extent requisite to permit the sale or other
disposition by any Holder of the Registrable Securities so registered. If the
securities to be so registered for sale are to be distributed by or through a
firm of underwriters of recognized standing under underwriting terms appropriate
for such transaction, then the Registrable Securities shall also be included in
such underwriting on the same terms as other securities of the same class, as
the Registrable Securities included in such underwriting, provided that if, in
the written opinion of the managing underwriter or underwriters, the total
amount of such securities to be so registered, when added to such Registrable
Securities, will exceed the maximum amount of the Company's securities which can
be marketed without otherwise materially and adversely affecting the entire
offering, then the Company shall exclude from such underwriting (a) first, all
securities other than Registrable Securities being sold for the account of other
than the Company, (b) next, the maximum number of securities for the account of
the Company which in the opinion of the managing underwriter can be excluded,
and (c) last, the minimum number of Registrable Securities, pro rata to the
extent practicable on the basis of the number of Registrable Securities
requested to be registered among the participating Holders of Registrable
Securities, as is necessary to reduce the size of the offering.
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B. Registrations for the Holders. At the request of any Holder from
time to time during the Term of Full-Time Employment Term, the Company will use
its best efforts to:
1. prepare and file with the United States Securities and
Exchange Commission (the "Commission"), within 60 days after the
initial request from Tow to register Registrable Securities, setting
forth the number thereof, a registration statement with respect to
such Registrable Securities and cause such registration statement to
become and remain effective, provided that the Company shall not be
required to keep such registration statement effective, or to prepare
and file any amendments or supplements thereto, later than the last
business day of the sixth month following the date on which such
registrable statement becomes effective under the Securities Act or
such longer period during which the Commission requires that such
registration statement be kept effective with respect to any of the
Registrable Securities so registered;
2. subject to the proviso contained in the immediately preceding
clause (1), prepare and file with the commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement whenever such Holder
shall desire to dispose of the same;
3. furnish to such Holder such numbers of copies of a printed
prospectus, including a preliminary prospectus and any amendments or
supplements thereto, in conformity with the requirements of the
Securities Act, and such other documents as such Holder may reasonably
request in order to facilitate the disposition of such Registrable
Securities;
4. register or qualify the Registrable Securities covered by such
registration statement under such securities or blue sky laws of such
jurisdictions as
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such Holder shall reasonably request, and do any and all other acts
and things which may be necessary or advisable to enable such Holder
to consummate the disposition in such jurisdictions of such
Registrable Securities;
5. furnish to such Holder an agreement satisfactory in form and
substance to such Holder by the Company and each of its officers,
directors and holders of 5% or more of any class of capital stock or
any class of securities convertible into 5% or more of any class of
capital stock, that during the seven days before and the 90 days after
the effective date of any underwritten public offering, the Company
and such officers, directors and 5% security-holders shall not offer,
sell, contract to sell or otherwise dispose of any shares of capital
stock or securities convertible into capital stock, except as part of
such underwritten public offering
6. furnish to such Holder at the closing of the sale of such
Registrable Securities by such Holder, a signed copy of an opinion or
opinion of counsel for the Company acceptable to such Holder to the
effect that:
(i) a registration statement covering such Registrable
Securities has been filed with the Commission under the
Securities Act and has been made effective by order of the
Commission;
(ii) said registration statement and the prospectus
contained therein comply as to form in all material respects
with the requirements of the Securities Act, and nothing has
come to said counsel's attention which would cause it to
believe that either said registration statement or said
prospectus (except for the financial statements and schedules
and other financial and statistical data included or
incorporated by reference therein, as to which such counsel
need express no opinion) contains an
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untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to
make the statements therein (in the case of said prospectus,
in the light of the circumstances under which they were made)
not misleading;
(iii) said counsel knows of no legal or governmental
proceedings required to be described as required, or of any
contract or document of a character required to be described
in said registration statement or said prospectus or to be
filed as an exhibit to said registration statement or to be
incorporated by reference therein which is not described and
filed as required;
(iv) no stop order has been issued by the Commission
suspending the effectiveness of such registration statement
and, to the best of such counsel's knowledge, no proceedings
for the issuance of such a stop order are pending, threatened
or contemplated; and
In giving such opinion, counsel for the Company may rely, as to all
factual matters treated therein, on certificates of the Company (copies of which
shall be delivered to such Holder), and as to all questions of the laws of each
state in which the Company shall be so required to register or qualify such
Registrable Securities, on the opinion of counsel from such state acceptable to
such Holder, copies of which shall be delivered to such Holder.
The costs and expenses of all registrations and qualifications under
the Securities Act, and of all other actions which the Company is required to
take or effect pursuant to this Schedule "A", shall be paid by the Company
(including, without limitation, all registration and filing fees, printing
expenses, auditing costs and expenses, and the reasonable fees and disbursements
of counsel for the Company and special counsel for such Holder), and such Holder
shall pay only the underwriting
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discounts and commissions, if any, relating to the Registrable Securities sold
by them, provided that the Company shall only be obligated under Paragraph B of
this Schedule "A" to pay the costs and expenses of not more than an aggregate of
[two] registrations and then only for such registrations which become effective
under the Securities Act as a result of requests made during the Employment Term
(as defined in Tow's Employment Agreement to which this Schedule B is attached).
For the purposes of this Schedule "A", the address of each of Tow Trust #1
and Tow Trust #2 shall be c/o Xxxxx X. Xxxxxxxxxx, Esq., 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, XX 00000, and the address of Tow shall be as set forth in Section 12
of the Agreement.
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