EXHIBIT 10.22
EMPLOYMENT AGREEMENT
WITH
XXXXXX XXXXXX
THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as
of May 1, 2001, by and between CLASSIC COMMUNICATIONS, INC., a Delaware
corporation ("Classic"), CLASSIC CABLE, INC., a Delaware corporation
(collectively, "Employer"), and XXXXXX XXXXXX ("Employee").
RECITALS:
Employer wishes to take steps to ensure that Employer will
continue to have Employee's services available to Employer and its subsidiaries,
on the terms and conditions hereinafter set forth, and Employee is willing to
accept such employment on such terms and conditions.
In consideration of the foregoing, the mutual provisions
contained herein, and for other good and valuable consideration, the parties
agree with each other as follows:
1. Employment. Employer hereby employs Employee, and Employee hereby
accepts such employment, upon the terms and subject to the conditions set forth
in this Agreement.
2. Term. Unless Employee's employment shall sooner terminate pursuant
to Sections 7 or 8 hereof, the term of employment under this Agreement shall
commence on May 1, 2001 (the "Commencement Date") and shall continue through
April 30, 2002 (such initial one-year term, together with any extensions thereof
in accordance with the next sentence of this Section 2 referred to as the
"Term"). The initial term of Employee's employment hereunder shall thereafter be
deemed to be automatically extended, upon the same terms and conditions, for
successive periods of one (1) year each until either party to this Agreement
gives the other written notice of termination of employment or until the death
of Employee. The period commencing on the Commencement Date and ending on the
date of termination of Employee's employment or the death of Employee shall be
referred to as the "Employment Period."
3. Compensation; Reimbursement.
(a) Employer shall pay to Employee as compensation for all
services rendered by Employee during the Employment Period a base annual salary
of $1350,000 per year (the "Basic Salary"), or such other amount as the parties
may agree on from time to time, payable in equal monthly installments or in
other more frequent installments, as determined by Employer. The
board of directors of Employer (the "Board of Directors") shall have the right
to increase Employee's compensation from time to time by action of the Board of
Directors. In addition, the Board of Directors, in its sole discretion, may,
with respect to any year during the Employment Period, award a bonus or bonuses
to Employee in addition to the bonus provided for in Section 3(b).
(b) In addition to the Basic Salary paid pursuant to Section
3(a), Employer agrees to pay as incentive compensation a one time $33,750.00
"signing bonus", as well as an annual bonus in an amount in accordance with the
bonuses paid to other senior officers of Employer, after the initial twelve (12)
month employment period, based upon Employee's performance, as determined each
year by the Board of Directors of Employer.
(c) Employer shall reimburse Employee for all reasonable
expenses incurred by Employee in the performance of his duties under this
Agreement; provided, however, that Employee must furnish to Employer an itemized
account, satisfactory to Employer, in substantiation of such expenditures.
(d) Employee shall be entitled to the use of a corporate
vehicle, or $500 per month car allowance, and such fringe benefits, including,
but not limited to, medical, dental and other insurance benefits, as may be
provided from time to time by Employer to other senior officers of Employer.
Employee shall also be entitled to participate in Employer's 401(k) plan.
4. Duties. Employee is engaged as the Chief Financial Officer of
Employer and of Employer's various ------ subsidiaries. In addition, Employee
shall have such other duties and hold such other offices as may from time to
time be reasonably assigned to his by the Chief Executive Officer and/or
President of Employer.
5. Extent of Services; Vacations and Days Off.
(a) During the Employment Period, Employee shall devote
substantially all of his time, energy and attention during regular business
hours to the benefit and business of Employer in performing his duties pursuant
to this Agreement.
(b) Employee shall be entitled to vacations with pay and to
such personal and sick leave with pay in accordance with the policy of Employer
as may be established from time to time by Employer and applied to other senior
officers of Employer.
6. Facilities. Employee will work from the offices of Employer in
Tyler, Texas. Employer shall provide Employee with a fully furnished office, and
the facilities of Employer shall be
generally available to Employee in the performance of his duties pursuant to
this Agreement.
7. Termination on Death or Incapacity; Effect of Illness.
(a) If Employee dies during the Term, Employer shall pay to
the estate of Employee the Basic Salary that would have otherwise been paid to
Employee plus any bonus compensation awarded, but not yet paid, through the end
of the month in which his death occurs. Employer shall have no additional
financial obligation under this Agreement to Employee or his estate. After
receiving the payments provided in this subparagraph (a), Employee and his
estate shall have no further rights under this Agreement.
(b) The term "permanent disability" as used in this Agreement
shall mean the inability of Employee, as determined by the Board of Directors,
by reason of physical or mental disability to perform the duties required of him
under this Agreement for a period of ninety (90) days in any one-year period.
Successive periods of disability, illness or incapacity will be considered
separate periods unless the later period of disability, illness or incapacity is
due to the same or related cause and commences less than six (6) months from the
ending of the previous period of disability. Upon such determination, the Board
of Directors may terminate Employee's employment under this Agreement upon ten
(10) days' prior written notice. Upon such termination of Employee's employment,
Employer shall pay to Employee the Basic Salary that would have otherwise been
paid to Employee plus any bonus compensation awarded, but not yet paid, through
the end of the month in which Employee's termination of employment occurs. If
any determination of the Board of Directors with respect to permanent disability
is disputed by Employee, the parties hereto agree to abide by the decision of a
panel of three physicians. Employee and Employer shall each appoint one member,
and the third member of the panel shall be appointed by the other two members.
Employee agrees to make himself available for and to submit to examinations by
such physicians as may be directed by Employer. Failure to submit to any such
examination shall constitute a breach of a material part of this Agreement.
(c) During any period of disability, illness or incapacity
during the term of this Agreement which renders Employee at least temporarily
unable to perform the services required under this Agreement for a period which
does not exceed ninety (90) days in any one-year period, Employee shall receive
the compensation payable under Section 3(a) of this Agreement, less any benefits
received by him under any disability insurance carried by or provided by
Employer.
8. Other Terminations.
(a)
(i) Employee may terminate his employment hereunder
upon giving not more than thirty (30) days' nor less than fifteen (15) days'
prior written notice to Employer.
(ii) If Employee gives notice pursuant to Section
8(a) above, Employer shall have the right to relieve Employee, in whole or in
part, of his duties under this Agreement (without reduction in compensation
through the termination date set forth in the notice to Employer).
(b) Employer may terminate Employee's employment hereunder at
any time, without prior notice and with or without Good Cause.
(c) If Employer shall terminate the employment of Employee
without Good Cause (as defined below) effective on a date earlier than the
termination date provided for in Section 2, Employee shall have the
nonforfeitable right to receive the Basic Salary, any awarded but unpaid bonus,
matching 401(k) contributions consistent with past practice (to the extent
permitted by such 401(k) plan and by law), health insurance (to the extent
permitted by such health insurance plans and by law) and other existing
benefits, paid monthly, to which he is entitled for a period of one-year from
the effective date of Employee's termination; provided that, notwithstanding
such termination of employment, Employee's covenants set forth in Sections 9, 10
and 11 are intended to and shall remain in full force and effect.
(i) If the employment of Employee is terminated for
Good Cause, or if Employee voluntarily terminates his employment, Employer shall
pay to Employee any Basic Salary earned and bonus awarded but unpaid prior to
the effective date of such termination. Under such circumstances, such payment
shall be in full and complete discharge of any and all liabilities or
obligations of Employer to Employee hereunder, and Employee shall be entitled to
no further benefits under this Agreement.
(ii) "Good Cause" shall include:
(1) Employee's conviction of a criminal
offense that has a material adverse effect upon the business or reputation or
Employer or any affiliate of Employer;
(2) commission by Employee of a material
breach of his duty of loyalty to Employer, any affiliate of Employer, or
Sections 10 or 11 of this Agreement;
(3) the willful failure by Employee to
substantially perform Employee's duties specified hereunder or such other duties
as may be reasonably defined by the Chief Executive Officer and President of
Employer from time to time (other than any such failure re-
sulting from Employee's disability), which failure to perform has not been cured
within fifteen (15) days after a written demand for substantial performance is
delivered to Employee by the Chief Executive Officer and President of Employer;
or
(4) any fraud, material misappropriation, or
embezzlement by Employee in connection with the operation or management of the
business of Employer.
(d) The parties agree that, because there can be no exact
measure of the damage that would occur to Employee as a result of a termination
by Employer of Employee's employment without Good Cause, the payments and
benefits paid and provided pursuant to this Agreement shall be deemed to
constitute liquidated damages and not a penalty for Employer's termination of
Employee's employment without Good Cause; provided that Employee shall be
required to use all reasonable efforts to mitigate his damages; provided further
that if Employee obtains new employment (including self-employment), any
payments and benefits paid and provided pursuant to this Agreement shall be
reduced or cancelled to the extent of any salary or other cash compensation and
benefits coverage earned or accrued in connection with such employment.
(e) Employer's obligation to make any of the payments or
provide any of the benefits described above is conditioned upon Employee
delivering a full release of any known or unknown claims arising out of or
related to this Agreement or Employee's employment or termination of employment
with Employer in a form which is reasonably acceptable to Employer.
9. Disclosure. Employee agrees that during the Employment Period, he
will disclose and disclose only to Employer all material ideas, methods, plans,
developments or improvements known by him which relate directly or indirectly to
the business of Employer, whether acquired by Employee before or during the
Employment Period. Nothing in this Section 9 shall be construed as requiring any
such communication where the idea, plan, method or development is lawfully
protected from disclosure as a trade secret of a third party or by any other
lawful prohibition against such communication.
10. Confidentiality. Employee agrees to keep in strict secrecy and
confidence any and all information Employee assimilates or to which he has
access during the Employment Period and which has not been publicly disclosed
and is not a matter of common knowledge in the fields of work of Employer.
Employee agrees that both during and after the Employment Period, he will not,
without the prior written consent of Employer, disclose any such confidential
information to any third person, partnership, joint venture, company,
corporation or other organization.
11. Non-Competition; Non-Solicitation; Non-Disparagement. Employee
hereby acknowledges that, during and solely as a result of his employment by
Employer, he will receive: (1)
special training and education with respect to the operations of a cable
television company and other related matters, and (2) access to confidential
information and business and professional contacts. In consideration of the
special and unique opportunities afforded to Employee by Employer as a result of
Employee's employment, as outlined in the previous sentence, Employee hereby
agrees as follows:
(a) During a period starting on the Commencement Date and
ending two (2) years following the end of the Employment Period, Employee shall
not, without the prior written consent of Employer, (i) directly or indirectly
engage in any business that competes with Employer or any subsidiary or
affiliate of Employer in their conduct of the cable television business, or
otherwise receive compensation for any services rendered regarding any aspect of
the cable television business anywhere within a thirty-five (35) mile radius of
any cable television system operated by Employer or any subsidiary or affiliate
of Employer; or (ii) engage or participate, directly or indirectly, in any
business which is substantially similar to that of Employer or any subsidiary or
affiliate of Employer, including, without limitation, serving as a consultant,
administrator, officer, director, employee, manager, landlord, lender,
guarantor, or in any similar or related capacity or otherwise receive
compensation for services rendered regarding any aspect of the cable television
business anywhere anywhere within a thirty-five (35) mile radius of any cable
television system operated by Employer or any subsidiary or affiliate of
Employer. Employee acknowledges that these limited prohibitions are reasonable
as to time, geographical area and scope of activities to be restrained and that
the limited prohibitions do not impose a greater restraint than is necessary to
protect Employer's goodwill, proprietary information and other business
interests. The mere ownership of a de minimis amount of securities in any
competitive enterprise and exercise of rights appurtenant thereto are not
prohibited.
(b) During the Employment Period, except as may be otherwise
herein provided, for a period of two (2) years following the end of the
Employment Period, regardless of the reason for such termination, Employee
agrees he will refrain from and will not, directly or indirectly, as an
individual, partner, officer, director, stockholder, employee, advisor,
independent contractor, joint venturer, consultant, agent, representative,
salesman or otherwise (i) solicit any of the employees of Employer to terminate
their employment or (ii) accept employment with or seek remuneration by any of
the clients or customers of Employer with whom Employer did business during the
Employment Period.
(c) Employee agrees that, during the Employment Period and the
non-competition period described in this Section 11, he will not make or publish
any statement which is, or may reasonably be considered to be, disparaging of
Employer, its subsidiaries or affiliates, or directors, officers, employees or
the operations, products or services of Employer or
any of its subsidiaries or affiliates, except in connection with the performance
of his services hereunder to the extent Employee makes the statement to
employees of Employer or its affiliates in good faith in furtherance of
Employer's business.
(d) The period of time during which Employee is prohibited
from engaging in certain business practices pursuant to Sections 11(a), (b) or
(c) shall be extended by any length of time during which Employee is in breach
of such covenants.
(e) It is understood by and between the parties hereto that
the foregoing restrictive covenants set forth in Sections 11(a) through (d) are
essential elements of this Agreement, and that, but for the agreement of
Employee to comply with such covenants, Employer would not have agreed to enter
into this Agreement. Such covenants by Employee shall be construed as agreements
independent of any other provision in this Agreement. The existence of any claim
or cause of action of Employee against Employer, whether predicated on this
Agreement, or otherwise, shall not constitute a defense to the enforcement by
Employer of such covenants.
(f) It is agreed by Employer and Employee that if any portion
of the covenants set forth in this Section 11 are held to be invalid,
unreasonable, arbitrary or against public policy, then such portion of such
covenants shall be considered divisible both as to time and geographical area.
Employer and Employee agree that, if any court of competent jurisdiction
determines the specified time period or the specified geographical area
applicable to this Section 11 to be invalid, unreasonable, arbitrary or against
public policy, a lesser time period or geographical area which is determined to
be reasonable, non-arbitrary and not against public policy may be enforced
against Employee. Employer and Employee agree that the foregoing covenants are
appropriate and reasonable when considered in light of the nature and extent of
the business conducted by Employer.
12. Specific Performance. Employee agrees that damages at law will be
an insufficient remedy to Employer if Employee violates the terms of Sections 9,
10 or 11 of this Agreement and that Employer would suffer irreparable damage as
a result of such violation. Accordingly, it is agreed that Employer shall be
entitled, upon application to a court of competent jurisdiction, to obtain
injunctive relief to enforce the provisions of such Sections, which injunctive
relief shall be in addition to any other rights or remedies available to
Employer. Employee agrees to pay to Employer all costs and expenses incurred by
Employer relating to the enforcement of the terms of Sections 9, 10 or 11 of
this Agreement, including reasonable fees and disbursements of counsel (both at
trial and in appellate proceedings).
13. Compliance with Other Agreements. Employee represents and warrants
that the execution of this Agreement by him and his performance of his
obligations hereunder will not conflict with, result in the breach of any
provision of or the termination of or constitute a default
under any Agreement to which Employee is a party or by which Employee is or may
be bound.
14. Waiver of Breach. The waiver by Employer of a breach of any of the
provisions of this Agreement by Employee shall not be construed as a waiver of
any subsequent breach by Employee.
15. Assignment. The rights and obligations of Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Employer. This Agreement is a personal employment contract and
the rights, obligations and interests of Employee hereunder may not be sold,
assigned, transferred, pledged or hypothecated.
16. Stock Options. Effective as of the Commencement Date, Employee
shall be granted, in accordance with and subject to the terms and conditions of
the Classic Communications, Inc. 1999 Omnibus Stock Incentive Plan (the "1999
Plan") and the incentive stock option award agreement (the "Stock Option
Agreement") by and between Classic and Employee an incentive stock option to
purchase 75,000 shares of Classic's Class A Voting Common Stock, par value $.01
per share ("Common Stock"), at the exercise price of $1.05 per share [determined
based on the greater of (i) market price on commencement date or (ii) average
closing price of 20 business preceding and including commencement date]. Each
option will vest and become exercisable as to twenty five percent (25%) of the
Common Stock on each of the first four (4) anniversaries of the grant date.
17. Entire Agreement. This Agreement, the 1999 Plan and the Stock
Option Agreement contain the entire agreement and supersede all prior agreements
and understandings, oral or written, between Employer (or its subsidiaries) and
Employee, with respect to the subject matter hereof. This Agreement may be
changed only by an agreement in writing signed by the party against whom any
waiver, change, amendment, modification or discharge is sought.
18. Construction and Interpretation.
(a) This Agreement shall be governed by and construed pursuant
to the laws of the State of Texas.
(b) The headings of the various sections in this Agreement are
inserted for convenience of the parties and shall not affect the meaning,
construction or interpretation of this Agreement.
(c) Any provision of this Agreement which is determined by a
court of competent jurisdiction to be prohibited, unenforceable or not
authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction. In any such case, such determination shall
not affect any other provision of this Agreement, and the remaining provisions
of this Agreement shall remain in full force and effect. If any provision or
term of this Agreement is susceptible to two or more constructions or
interpretations, one or more of which would render the provision or term void or
unenforceable, the parties agree that a construction or interpretation which
renders the term or provision valid shall be favored.
19. Notice. All notices which are required or may be given under this
Agreement shall be in writing and shall be deemed to have been duly given when
received if personally delivered; when transmitted if transmitted by telecopy or
similar electronic transmission method; one working day after it is sent, if
sent by recognized expedited delivery service; and five days after it is sent,
if mailed, first class mail, certified mail, return receipt requested, with
postage prepaid. In each case notice shall be sent:
To the Employer: Classic Communications, Inc. and Classic Cable, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: President
With copies to: Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
To the Employee: at the address and telecopy number stated in the signature
page hereto
* * *
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first-above written.
CLASSIC COMMUNICATIONS, INC.
By: /s/ Xxxx Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
-----------------------------
Title: President
----------------------------
CLASSIC CABLE, INC.
By: /s/ Xxxx Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
-----------------------------
Title: President
----------------------------
EMPLOYEE
/s/ Xxxxxx Xxxxxx
----------------------------------
