EXHIBIT 10.83
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement") is
made and entered into as of this 17th day of October, 1996, by and between
Hungarian Telephone and Cable Corp., a corporation organized under the laws of
the State of Delaware, United States of America (the "Company") and Xxxxxx X.
Xxxxxx ("Executive").
RECITALS:
A. The Company and Executive are parties to that certain
Employment Agreement, dated December 18, 1995 ("1995 Agreement").
B. On July 26, 1996, Executive's position with the Company
was changed from that of Director of Operations to that of Vice
President and Chief Operating Officer, thereby significantly
increasing Executive's duties and responsibilities.
C. The parties desire to amend and restate the 1995 Agreement to set
forth the terms and conditions under which Executive shall continue to serve in
the above-stated capacity of Vice President and Chief Operating Officer of the
Company.
NOW, THEREFORE, in consideration of the respective covenants and
agreements of the parties set forth herein, it is agreed as follows:
1. Employment and Duties. The Company agrees to employ Executive and
Executive accepts the employment, subject to the terms and conditions herein, to
serve as Vice President and Chief Operating Officer of the Company. Executive
shall report and be responsible solely to the President and Chief Executive
Officer of the Company. Executive's duties and responsibilities shall include
the duties and responsibilities as set forth in the Company's bylaws from time
to time in effect and such other duties and responsibilities as the President
and Chief Executive Officer may from time to time reasonably assign Executive,
in all cases consistent with Executive's position. Executive shall perform
faithfully the executive duties assigned to him to the best of his ability.
2. Place of Employment. Executive shall be employed at
the Company's offices located at Xxxxxxxxxx x.0, Xxxxxxxx,
Xxxxxxx.
3. Term. The term of employment under this Agreement
shall continue through December 31, 1999, unless earlier
terminated in accordance with the terms of this Agreement (the
"Employment Period").
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4. Effective Date. The effective date of this Agreement
is July 26, 1996, the date on which Executive was elected Vice
President and Chief Operating Officer by the Board of Directors
of the Company (the "Board").
5. Annual Salary. Executive will receive an annual base salary of One
Hundred Forty-Five Thousand Dollars ($145,000), payable in equal monthly
installments on the last day of each month. The Company shall be entitled to
deduct or withhold all taxes and charges which the Company may be required by
law to deduct or withhold therefrom. The Compensation and Stock Option Committee
of the Board (the "Compensation Committee") shall annually review Executive's
base salary in light of the performance of Executive and, if it finds
Executive's performance to be satisfactory, the Compensation Committee shall
increase such base salary by an amount it determines to be appropriate, but in
no event shall such increase be less than the annual change in the United States
Consumer Price Index for the most recently reported twelve (12) month period.
6. Share Award. In consideration of the Executive's (i) past services
to the Company and (ii) delivery of the aggregate par value therefor, the
Company hereby sells and assigns Executive seventeen thousand five hundred
(17,500) shares (the "Shares") of the Company's common stock, par value $.001,
("Common Stock"), which will be promptly registered with the United States
Securities and Exchange Commission (the "Commission") on Form S-8. Executive's
rights to the Shares will vest and certificates evidencing ownership of the
Shares will be released according to the following schedule, provided that if
Executive has not maintained continuous service with the Company from the date
hereof until the related vesting date (other than in circumstances set forth in
Paragraphs 19(b) and (c) all as yet unvested Shares shall be forfeited and
cancelled, so no certificate(s) therefor shall be released to the Executive:
Release Date Shares released
October 10, 1996 8,750
October 10, 1997 8,750
Prior to the scheduled release date of any installment of Shares, such
unreleased Shares may not be sold, assigned, transferred, pledged, or otherwise
encumbered by Executive. Executive hereby grants the Company an option to
purchase such number of Shares released to Executive as shall be sufficient to
allow Executive to pay taxes due on the released Shares, provided such purchase
by the Company does not violate the Company's certificate of incorporation, its
bylaws or the Delaware General Corporation Law.
7. Renegotiation Bonus. As consideration of
(i) Executive's agreement to amend and restate the 1995 Agreement
and to waive his rights to certain benefits under such agreement
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and (ii) delivery of the aggregate par value thereof, the Company hereby sells
and assigns Executive one thousand five hundred (1,500) shares of Common Stock,
which Shares will be promptly registered with the Commission on Form S-8. The
shares of Common Stock due Executive under this grant shall be delivered to
Executive as soon as reasonably practicable following the execution of this
Agreement.
8. Annual Housing Allowance. Executive will receive an annual housing
allowance (the "Housing Allowance") of Thirty-Six Thousand Dollars ($36,000),
payable in equal monthly installments. The Compensation Committee shall review
the amount of the Housing Allowance on an annual basis, and may increase the
amount based on cost of living increases, if applicable.
9. Annual Stock Options. Executive shall be entitled to
receive an award of options to purchase a target of twenty
thousand (20,000) shares of Common Stock annually (the
"Options").
(a) Calendar Year 1996. A determination of the Options to
which Executive will be entitled for the calendar year 1996 shall be
based on a combination of the annual line growth (representing 25% of
the grant) and the Operating Income Before Interest, Taxes,
Depreciation and Amortization (representing 75% of the grant). The
payout formula is as follows:
Less than 90% of objective = 0% of award
90% to 94.9% of objective = 70% of award
95% to 99.9% of objective = 85% of award
100% to 104.9% of objective = 100% of award
105% to 110% of objective = 115% of award
The objectives for annual line growth and Operating Income Before
Interest, Taxes, Depreciation and Amortization are those previously
established and agreed to by Executive and the Company in the 1995
Agreement and a letter dated May 1, 1996. The Options will be priced at
the lowest closing sale price during either January or December of
1996. The terms of the Options shall be set forth in a written stock
option contract and shall contain an exercise period beginning on April
1, 1997 and ending on March 31, 2002. The shares of Common Stock
purchased through such Options shall be delivered to Executive as soon
as reasonably practicable following written notice of exercise.
(b) Calendar Years 1997 through 1999. For the years 1997
through 1999, Executive will be entitled to participate in the
Company's 1992 Incentive Stock Option Plan, as amended (the "ISO
Plan"). Under the ISO Plan, Executive shall be entitled to receive an
award of options to purchase a target of twenty thousand (20,000)
shares of Common Stock annually on terms to be established by the
Compensation
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Committee. The Compensation Committee shall establish such terms,
including exercise price, by March 31st of the year following the year
in which such Options are attributable. In any given year, Executive
may receive an award that is less than, equal to, or greater than the
target award, depending upon the Company's performance measured against
annual financial targets agreed to by and between Executive and the
Compensation Committee.
10. Insurance. The Company will provide Executive, his
spouse and his minor dependents with health insurance coverage
under a fully comprehensive international scheme.
11. Automobile. The Company will provide Executive with an
automobile to be leased or purchased and maintained by the
Company.
12. Annual Leave. Executive will be entitled to thirty
(30) days annual paid vacation and a home leave allowance of Five
Thousand Dollars ($5,000).
13. Company Business Allowance. Section 911 of the Internal Revenue
Code provides an exemption for the payment of income taxes on $70,000 of
"foreign earned income," provided such taxpayer is present in a foreign country
or foreign countries (and not present in the United States) during at least
three hundred and thirty (330) full days in any 12 consecutive month period for
which the exemption is claimed. Executive agrees to reserve for Company business
fifteen (15) days annually of the time he is allowed to be in the United States
without incurring a loss of the above-stated tax exemption. If Executive is
required by Company business to be present in the United States for more than
fifteen (15) days in any calendar year and, thereby, loses or reduces tax
exemptions to which he would otherwise have been entitled, the Company will
reimburse Executive for any additional tax liability he incurs as a result of
such lost or reduced tax exemptions.
14. Hungarian Taxes. The Company will reimburse Executive
for (a) all Hungarian taxes, work permits, or other governmental
assessments that relate to his employment by the Company and (b)
any additional U.S. taxes resulting from such reimbursement.
15. Covenant Not to Compete. Executive hereby agrees that during the
term of this Agreement he will not, either through any kind of ownership (other
than ownership of securities of a publicly held corporation of which Executive
owns less than five percent (5%) of any class of outstanding securities), or as
a director, officer, principal, agent, employee, employer, advisor, consultant,
co-partner, or in any individual or representative capacity whatever, either for
his own benefit or for the benefit of any other person, firm, or corporation,
without the prior written consent of a duly authorized officer of the Company,
compete with the Company by engaging in any act, including, but
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not limited to, any of the following: (a) canvass, solicit, accept, or perform
any type of work performed by the Company for any "customer" (as hereinafter
defined) of the Company; (b) develop, design, market any services that may be
sold by the Company during the term of this Agreement; (c) request or advise any
firm to withdraw, curtail, or cancel its business with the Company; (d) give or
attempt to give any person, partnership, or corporation the right to solicit or
canvass any customer for the performance of services provided by the Company;
and (e) induce or attempt to influence any employee of the Company or any
employee of any customer to terminate his employment with the view toward
competing with the Company or any customer. As used herein, the term "customer"
includes any of the Company customers at any time during the term of this
Agreement.
16. Confidential Information.
(a) Nondisclosure. Executive expressly covenants and agrees
that he will not during the term of this Agreement or at any time after
the termination hereof, irrespective of the time, manner, or cause of
termination, reveal, divulge, disclose, or communicate to any person,
firm, or corporation, other than authorized officers, directors, and
employees of the Company, in any manner whatsoever, any "confidential
information" (as hereinafter defined) of the Company that would be
inconsistent with the position held by Executive or the duties being
performed by Executive at the direction of the Company.
(b) Return of Confidential Information and Other Property.
Upon termination of this Agreement, Executive will surrender to the
Company all confidential information including, without limitation, all
lists, charts, schedules, reports, financial statements, books and
records, and all copies thereof, of the Company and all other property
belonging to the Company whatsoever. As used herein, "confidential
information" means information disclosed to or known by Executive as a
consequence of or through his employment for the Company, not generally
known in the business in which the Company is or may become engaged,
about the Company, its business, products and processes.
17. Breach of Covenant Not to Compete and Confidentiality Provision.
Executive agrees that a substantial violation on his part of any covenant
contained in Paragraphs 15 and 16 above will cause such damage to the Company as
will be irreparable and for that reason, Executive further agrees that the
Company shall be entitled as a matter of right, to an injunction out of any
court of competent jurisdiction, restraining any further violation of said
covenants by Executive, his employer, employees, partners, or agents. Such right
to injunction shall be cumulative and in addition to whatever other remedies the
Company may have, including, specifically, recovery of liquidated and additional
damages. Executive expressly acknowledges and agrees that the
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respective covenants and agreements shall be construed in such a manner as to be
enforceable under applicable laws if a more limited scope of time is determined
by a court or competent jurisdiction to be required.
18. Indemnification. The Company agrees that if Executive is made a
party, or is threatened to be made a party, to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "Proceeding"), by
reason of the fact that he is or was a director, officer or employee of the
Company, Executive shall be indemnified and held harmless by the Company to the
fullest extent legally permitted or authorized by the Company's certificate of
incorporation or bylaws or resolutions of the Board or, if greater, by the laws
of the State of Delaware, against all cost, expense, liability and loss
(including, without limitation, attorney's fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by Executive in connection therewith. The Company agrees to
continue and maintain a directors' and officers' liability insurance policy
covering Executive to the extent the Company provides such coverage for any of
its other executive officers.
19. Termination.
(a) Reasons for Termination. The employment of Executive with
the Company shall terminate automatically upon Executive's death and
may be terminated by written notice (i) by the Company, upon
Executive's disability which renders him unable to perform his usual
and customary duties for a period of 180 consecutive days; (ii) by the
Company, with or without "cause" (as hereinafter defined); (iii) by
Executive, if he suffers a demotion or a lower status with the Company
other than for cause; or (iv) by Executive, in the event of a "change
in control" (as hereinafter defined), whether or not Executive suffers
a demotion or a lower status with the Company. For purposes of this
Agreement, "cause" shall mean (i) a failure by Executive to
substantially perform Executive's reasonable and legal duties and as
defined by goals established by the Board and agreed to by Executive,
other than a failure resulting from Executive's complete or partial
incapacity due to physical or mental illness or impairment, (ii) a
willful act by Executive that constitutes gross misconduct and that is
injurious to the Company, (iii) a willful breach by Executive of a
material provision of this Agreement, or (iv) a material and willful
violation of a federal or state law or regulation applicable to the
business of the Company. No act, or failure to act, by Executive shall
be considered "willful" unless committed without good faith and without
a reasonable belief that the act or omission was in the Company's best
interest. For purposes of this Agreement, a "change of control" shall
be deemed to have occurred if (1) any "person" (as such term is used in
Sections 13(d) and
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14(d) of the U.S. Securities and Exchange Act (the "Exchange Act")),
other than Citizens Utilities Company or its affiliates (together,
"Citizens"), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing thirty-five percent (35%) or more of the
combined voting power (with respect to the election of directors) of
the Company's then outstanding securities; (2) at any time after the
execution of this Agreement, a majority of the Board shall be replaced,
over a two-year period, from the directors who constituted the Board at
the beginning of such period, and such replacement shall not have been
approved by either two-thirds (2/3) of the Board as constituted at the
beginning of such period or Citizens; (3) the consummation of a merger
or consolidation of the Company with or into any other corporation
(other than Citizens), other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
more than sixty-five percent (65%) of the combined voting power (with
respect to the election of directors) of the securities of the Company
or of such surviving entity outstanding immediately after such merger
or consolidation; or (4) the consummation of a plan of complete
liquidation of the Company or of an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
business or assets.
(b) Termination Benefits. If Executive's employment is
terminated prior to the expiration of the term of this Agreement, for
any reason noted above (other than for "cause"), Executive will be
entitled to receive the following benefits as severance (the "Severance
Benefits"):
(i) a lump sum payment equal to nine (9) months'
salary and nine (9) months' Housing Allowance at
Executive's then-current annual salary and Housing
Allowance levels;
(ii) payment of any salary, expenses, allowances
and benefits accrued by Executive up to the date
of the termination;
(iii) the immediate vesting and release of any
unvested unreleased portion of the shares of
Common Stock granted hereunder, without
restriction; and
(iv) a pro-rata share of stock options, if any,
that are awardable under any incentive stock
option plan (in addition to the ISO Plan)
established by the Company.
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(c) Benefits in the Event of Executive's Death. Except as set
forth below, if Executive's employment terminates automatically in the
event of Executive's death, Executive's estate will be entitled to
receive the Severance Benefits. The Company may, at its option,
maintain a life insurance policy for Executive in an amount deemed to
be appropriate by the Board and designating Executive's estate as the
beneficiary. If the Company elects to maintain such life insurance and
the policy amount equals or exceeds the value of the Severance Benefits
(as determined by the Board), Executive's estate shall only be entitled
to receive the proceeds of the insurance policy. If the policy amount
is less than the value of the Severance Benefits, the Company shall pay
to Executive's estate an amount equal to the difference between the
value of the Severance Benefits and the amount to which the estate
would be entitled under the insurance policy. The Company shall
determine the value of the Severance Benefits as soon as practicable
after Executive's death but in no event later than thirty (30) days
thereafter.
(d) Date of Termination; Provision of Severance Benefits. The
date of termination of Executive's employment by the Company under this
Paragraph 19 shall be one (1) month after receipt by Executive of
written notice of termination, provided, however, that if the
termination is for cause the date of termination shall be the date
specified in the notice of termination or if no date is specified then
the date on which such notice is received by the Executive. The date of
termination by Executive under this Paragraph 19 shall be one (1) month
after receipt by the Company of written notice of termination. All
benefits to which Executive is entitled under subparagraph (b) hereof
shall be provided on the date of termination. In the case of automatic
termination in the event of Executive's death, the benefits shall be
provided no later than thirty (30) days from the date of Executive's
death.
20. Miscellaneous.
(a) Rights Under Plans and Programs. Notwithstanding anything
in this Agreement to the contrary no provision of this Agreement is
intended, nor shall it be construed, to reduce or in any way restrict
any benefit to which Executive may be entitled under any agreement,
plan, arrangement, or program providing benefits for Executive.
(b) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of
this Agreement and supersedes all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the
subject matter of this Agreement.
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(c) Notices. Any notice or request to be given hereunder by
any party to the other shall be in writing and shall be deemed to have
been duly given on the next business day after the same is sent, if
delivered personally or sent by telecopy or overnight delivery, or five
calendar days after the same is sent, if sent by registered or
certified mail, return receipt requested, postage prepaid, as set forth
below, or to such other persons or addresses as may be designated in
writing in accordance with the terms hereof by the party to receive
such notice.
If to the Company, to:
Hungarian Telephone and Cable Corp.
000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No.: 203/348-9128
Attn: General Counsel
with a required copy to:
Xxxxxxxxxx and Xxxxx, L.L.P.
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile No.: 202/745-0916
Attn: Xxxxxx X. Xxxxxx
If to Executive, to:
the address or facsimile number
for Executive as set forth
in the Company's records
with a required copy to:
Xxxxxxxxx and Xxxxxxx
0000 Xxxxxxxxxxxx Xxx., X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile No.: 202/662-6291
Attn: Xxxx Xxxxxx, Esq.
(d) Governing Law; Forum;Consent to Jurisdiction. This
Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to the principles
of conflict of laws thereof. Each of the parties to this Agreement
hereby irrevocably and unconditionally (i) consents to submit to the
exclusive jurisdiction of the courts of the State of New York for any
proceeding arising in connection with this Agreement (and each such
party agrees not to commence any such proceeding, except in such
courts), (ii) to the extent such party is not a resident of the State
of New York, agrees to appoint an agent in the State of New York as
such party's agent for acceptance of legal process in any such
proceeding against
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such party with the same legal force and validity as if served upon
such party personally within the State of New York, and to notify
promptly each other party hereto of the name and address of such agent,
(iii) waives any objection to the laying of venue of any such
proceeding in the courts of the State of New York, and (iv) waives, and
agrees not to plead or to make, any claim that any such proceeding
brought in any court of the State of New York has been brought in an
improper or otherwise inconvenient forum.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, and each of such counterparts shall for all purposes
be deemed to be an original, but all such counterparts together shall
constitute but one instrument.
(f) Executive's Successors. This Agreement and all
rights of Executive hereunder shall inure to the benefit of,
and be enforceable by, Executive's personal or legal
representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
(g) Assignment. Neither this Agreement, nor the
rights and obligations hereunder, may be assigned by either
party without the prior written consent of the other party.
(h) Parties in Interest. Nothing in this Agreement, expressed
or implied, is intended to confer on any person other than the parties
hereto or their respective successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
(i) Amendment. This Agreement may not be amended
except by an instrument in writing signed on behalf of each
of the parties.
(j) Extension; Waiver. Either party to this Agreement may (a)
extend the time for the performance of any of the obligations or other
acts of the other party to this Agreement or (b) waive compliance by
the other party with any of the agreements or conditions contained
herein or any breach thereof. Any agreement on the part of a party to
any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
(k) Severability. The provisions of this Agreement are
severable and, if any provision of this Agreement is determined to be
invalid or unenforceable by any court of competent jurisdiction, such
provision (in any other jurisdiction) and the other provisions hereof
(in any jurisdiction) shall not be rendered otherwise invalid or
unenforceable and such provision shall be deemed to be modified to the
extent necessary to render it legal, valid and enforceable, and if no
such modification shall render it
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legal, valid and enforceable, then this Agreement shall be construed as
if not containing the provision held to be invalid, and the rights and
obligations of the parties shall be construed and enforced accordingly.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
HUNGARIAN TELEPHONE AND CABLE
CORP.
By:/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
President and Chief
Executive Officer
XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
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