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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of April 15, 1999, by
and between OPTEL, INC., a Delaware corporation (the "Company"), and XXXXXXXX
XXXXXXXXXX ("Executive").
W I T N E S S E T H :
WHEREAS, Executive is currently employed by the Company as Chief Financial
Officer of the Company; and
WHEREAS, the Company desires to continue to employ Executive and Executive
has agreed to such continuation, subject to the terms of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the Company and Executive (individually a "Party" and together
the "Parties") agree as follows:
1. Definitions.
As used in this Agreement, unless the context otherwise requires:
(a) "Affiliate" of a Person shall mean a Person that directly or
indirectly controls, is controlled by, or is under common control with the
Person specified.
(b) "Aggregate Life Insurance Benefits" shall have the meaning set
forth in Section 9(a)(ii).
(c) "Average Annual Bonus" shall mean the average of the two most
recent annual bonuses (not including any payments from long-term incentive
programs) received by or due to Executive for completed fiscal years immediately
prior to the termination of the Term of Employment.
(d) "Base Salary" shall mean the salary provided for in Section 4.
(e) "Board" shall mean the Board of Directors of the Company.
(f) "Cause" shall mean:
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(i) Executive's conviction of a crime involving moral
turpitude (excluding offenses such as driving while intoxicated); or
(ii) Executive's (A) commission of a fraud upon the Company or
(B) material breach of this Agreement (including by wilfully failing or
neglecting to perform Executive's duties hereunder), which breach, if curable,
is not substantially cured within 10 days after written notice to Executive
specifying the nature of the breach.
(g) A "Change in Control" shall mean the occurrence of any one of the
following events:
(i) Any "person," as such term is used in Sections 3(a)(9) and
13(d) of the Securities Exchange Act of 1934 (other than Executive, Le Groupe
Videotron Ltee, Sojecci Ltee, Sojecci (1995) Ltee, Xxxxx Xxxxxxx and his spouse
and descendants, Caisse de depot et placement du Quebec, and their respective
Affiliates (collectively, all or any of Le Groupe Videotron Ltee, Sojecci Ltee,
Sojecci (1995) Ltee, Xxxxx Xxxxxxx and his spouse and descendants, Caisse de
depot et placement du Quebec, and their respective Affiliates constitute the
"Existing Control Group")), is a "beneficial owner," as such term is used in
Rule 13d-3 promulgated under that act, of shares of the Voting Stock of the
Company having more total votes in an election for directors than shares of
Voting Stock of which the Existing Control Group is the beneficial owner and, at
the same time, the Existing Control Group does not have the power, by contract
or otherwise, to elect or designate a majority of the members of the Board;
(ii) the majority of the members of the Board consists of
individuals other than Incumbent Directors, which term means the members of the
Board on the date of this Agreement; provided that any individual becoming a
director subsequent to such date whose election or nomination for election as a
director was supported by two-thirds of the directors who were Incumbent
Directors at the time of such election or nomination shall be an Incumbent
Director;
(iii) the Company adopts any plan of liquidation providing for
the distribution of all or substantially all of its assets;
(iv) all or substantially all of the assets or business of the
Company are disposed of pursuant to a merger, consolidation or other transaction
(unless the shareholders of the Company immediately prior to such merger,
consolidation or other transaction beneficially own, directly or indirectly, in
substantially the same proportion as they owned the Voting Stock of the Company,
the Voting Stock or other ownership interests of the Person or Persons, if any,
that succeed to the business of the Company) and at any time thereafter the
Existing Control Group does not have the power, by contract or otherwise, to
elect or designate a majority of the members of the Board; or
(v) the Company combines with another Person and is the
surviving corporation but, immediately after the combination, the shareholders
of the Company immediately prior to the combination hold, directly or
indirectly, not more than 50% of the Voting Stock of the surviving corporation
(there being excluded from the number of shares held by such
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shareholders, but not from the Voting Stock of the surviving corporation, any
shares received by Affiliates of such other Person in exchange for stock of such
other Person) and at any time thereafter the Existing Control Group does not
have the power, by contract or otherwise, to elect or designate a majority of
the members of the Board.
(h) "Confidential Information" shall mean all information that is not
known or available to the public concerning the business of the Company or any
Subsidiary relating to its products, product development, trade secrets,
customers, suppliers, finances, and business plans and strategies. For this
purpose, information known or available generally within the trade or industry
of the Company or any Subsidiary shall be deemed to be known or available to the
public. Confidential Information shall include information that is, or becomes,
known to the public as a result of a breach by Executive of the provisions of
Section 13.
(i) "Constructive Termination Without Cause" shall mean a termination
of the Term of Employment by written notice given by Executive within 60 days
following the occurrence, without Executive's prior written consent, of one or
more of the following events (except in consequence of a prior termination):
(i) a reduction in or elimination of (A) Executive's then
current Base Salary, or (B) Executive's opportunity for any long-term incentive
award for which he is eligible under Section 6 or the termination or material
reduction of any material employee benefit or perquisite enjoyed by him
including the bonus provided for under Section 5; provided, however, that in the
case of clause (B), only if the reduction or elimination is greater than that
applied to other executives of the Company of the same class or level as
Executive;
(ii) the failure to elect or reelect Executive to the position
specified in Section 3(a), or Executive's removal, without Cause, from such
position, or a material diminution in Executive's duties, authority or
responsibility as described in Section 3(a), or the assignment to Executive of
duties which are materially inconsistent with such duties or which materially
impair Executive's ability to function in such position, and, in the case of any
such assignment, the failure of the Company to cure such inconsistency or
impairment within 15 days after its receipt of notice thereof from Executive;
(iii) the failure to continue Executive's participation in any
incentive compensation plan for which Executive is eligible unless executives of
the same class or level as Executive also cease to participate in such plan or a
plan providing a substantially similar opportunity is substituted; or
(iv) the relocation of the Company's principal office outside
the area comprised by Dallas and Tarrant Counties, Texas, having dimensions of
approximately 58 miles by 29 miles and commonly referred to as the Dallas-Fort
Worth Metroplex.
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(j) "Disability" shall mean Executive's inability, due to physical or
mental incapacity, to substantially perform Executive's duties and
responsibilities under this Agreement for a period of 180 consecutive days or
for 180 days in a 365-day period.
(k) "MDU Business" shall mean the delivery of video and
telecommunications services to residential multiple dwelling units.
(l) "Minimum Severance Period" shall have the meaning set forth in
Section 9(d)(vi)(A), subject to modification as provided in Section 9(e) in the
event of a Change in Control.
(m) "Non-Extension Event" shall mean any termination of the Term of
Employment resulting from an election by the Company not to renew the Term of
Employment.
(n) "Person" shall mean an individual, firm, corporation, trust, joint
venture, partnership, limited liability company, association, unincorporated
organization or other entity or any governmental body or subdivision, agency,
commission or authority thereof.
(o) "Stock" shall mean the Common Stock of the Company.
(p) "Subsidiary" shall mean any Person of which the Company owns,
directly or indirectly, more than 50% of the Voting Stock or, in the case of a
Person other than a corporation, more than 50% of the equity interest.
(q) "Term of Employment" shall mean the period or periods specified in
Section 2.
(r) "Voting Stock" shall mean capital stock of any class or classes
having general voting power under ordinary circumstances, in the absence of
contingencies, to elect a majority of the directors of a corporation.
2. Term of Employment.
The Company hereby employs Executive, and Executive hereby accepts such
employment, for the Term of Employment commencing April 15, 1999 and ending at
the close of business on April 15, 2001, subject to earlier termination of the
Term of Employment in accordance with the terms of this Agreement. The Term of
Employment shall be automatically renewed from year to year unless either the
Company or Executive provides the other with written notice of non-renewal at
least 30 days prior to the date on which the Term of Employment would otherwise
expire.
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3. Position, Duties and Responsibilities.
(a) During the Term of Employment, Executive shall be employed as Chief
Financial Officer of the Company. In that capacity Executive shall have the
duties, authority and responsibilities normally associated with such position
and shall report to the Chief Executive Officer of the Company. Executive shall,
at the request of the Board or the Chief Executive Officer of the Company, also
serve as an officer and/or director of one or more Subsidiaries without
additional compensation.
(b) During the Term of Employment Executive shall devote his full
attention and expend his best efforts, energies and skills on a full-time basis
to the business of the Company and its Subsidiaries.
(c) Executive's services to the Company will be rendered primarily at
the Company's principal office. Executive acknowledges, however, that
Executive's services may require extensive travel.
(d) Nothing herein shall preclude Executive from (i) serving as a
director of one or more other corporations not engaged in competition with the
Company or of one or more trade associations and/or charitable organizations,
subject in each case to prior approval by the Chief Executive Officer of the
Company, (ii) engaging in charitable activities and community affairs, (iii)
managing Executive's personal investments and affairs and those of Executive's
family, and (iv) engaging in other business transactions, provided that such
activities individually and in the aggregate do not reflect adversely on
Executive's personal or business reputation or the Company or its business and
do not interfere with the proper performance of Executive's duties and
responsibilities to the Company and its Subsidiaries.
4. Base Salary.
Executive shall receive Base Salary from the Company at the annual rate
of $210,000, payable in accordance with the regular payroll practices of the
Company, but in no event less frequently than monthly. Executive's Base Salary
shall be subject to review by the Company on an annual basis but shall not be
decreased.
5. Annual Bonus.
Executive shall be entitled to be considered for receipt of an annual
bonus, the calculation of which is to be determined in accordance with an
incentive plan established and administered by the Board which includes a
"target" bonus for Executive for each bonus period, as such plan may be modified
by the Board from time to time.
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6. Long-Term Incentive Programs.
Executive shall be eligible to participate in any long-term incentive
programs of the Company on the same basis as other senior executives of the
Company.
7. Employee Benefit Programs and Vacation.
(a) During the Term of Employment Executive shall be entitled to
participate in all employee pension and welfare benefit plans and programs made
available to the Company's senior executives generally, as such plans or
programs may be in effect from time to time.
(b) Executive shall be entitled to four weeks of vacation per year.
8. Reimbursement of Business and Other Expenses and Perquisites.
(a) Executive is authorized to incur reasonable business expenses in
carrying out his duties and responsibilities under this Agreement, and the
Company shall promptly reimburse Executive for all such expenses, all subject to
and in accordance with the Company's policies and procedures as adopted and in
effect from time to time and applicable to its senior executives of comparable
status.
(b) To assist Executive in the performance of his duties and
responsibilities under this Agreement, the Company shall provide to Executive an
allowance for the use of an automobile in accordance with the Company's policies
applicable generally to the Company's senior executives of comparable class or
status; provided, however, that, if Executive currently uses a leased automobile
provided by the Company, then in lieu of such allowance the Company may continue
to provide Executive with the use of such leased automobile for the remaining
initial term of the applicable lease.
(c) Executive shall be eligible to receive all perquisites made
generally available by the Company to its senior executives of comparable class
or status.
(d) Executive shall be reimbursed for cost of air travel (economy
class) for up to two round trip tickets between Dallas and Canada for Executive
and his immediate family during each calendar year covered by this Agreement. In
addition, the event of a death of Executive's or Executive's wife's immediately
family, the Company will reimburse Executive for the costs of round trip travel
(economy class) for Executive and Executive's immediately family between Dallas
and Canada.
(e) Executive shall be reimbursed for all reasonable expenses
associated with the preparation of his and his spouse's United States and
Canadian income tax returns for tax years that end during the Term of
Employment.
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(f) During the Term of Employment, Executive shall be reimbursed for
the cost of private school tuition for Executive's children.
(g) The Company will contribute on Executive's behalf 5% of Executive's
base salary to the pension fund of Executive's choice. Payments to the fund will
be made bi-weekly during the Term of Employment.
(h) The Company will reimburse Executive for the reasonable costs of
English classes taken by Executive and members of his immediate family during
the Term of Employment.
9. Termination of Term of Employment.
(a) Termination Due to Death. The Term of Employment shall terminate
upon Executive's death. In the event of such termination due to Executive's
death, Executive's estate or Executive's beneficiaries, as the case may be,
shall be entitled to:
(i) the proceeds payable in the event of Executive's death
under the group life insurance policy maintained by the Company for the benefit
of its senior executive employees and others;
(ii) an amount, payable promptly in a lump sum, equal to the
excess, if any, of (A) Base Salary for the unexpired portion of the Term of
Employment remaining as of the time immediately prior to Executive's death, over
(B) the aggregate amount of life insurance proceeds payable to Executive's
estate or beneficiaries pursuant to clause (i) of this Section 9(a) or pursuant
to any other policy on Executive's life for which premiums are paid by the
Company or any of its Affiliates (the "Aggregate Life Insurance Benefits");
(iii) if the date of Executive's death coincides with the last
day of a bonus period, a bonus for such bonus period in accordance with the
terms of the applicable incentive plan; otherwise, a bonus for the bonus period
in which Executive's death occurs, determined pro rata with respect to
Executive's target bonus for such bonus period based on the number of completed
months of Executive's employment by the Company during such bonus period;
(iv) the balance of any bonus earned (but not yet paid) for
any bonus period prior to the bonus period in which Executive's death occurs;
(v) any amounts earned, accrued or owing but not yet paid
under Section 6, 7 or 8; and
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(vi) any other or additional benefits provided for in
accordance with applicable plans and programs of the Company.
(b) Termination Due to Disability. The Term of Employment may be
terminated by the Company by written notice to Executive in the case of
Executive's Disability. In the event of such termination due to Disability,
Executive shall be entitled to:
(i) an amount, payable promptly in a lump sum, equal to the
excess, if any, of (A) Base Salary for the unexpired portion of the Term of
Employment remaining as of the time immediately prior to such termination, over
(B) the amount of any disability benefits provided to Executive by the Company
or under any disability insurance paid for, or for which premiums paid by
Executive were reimbursed, by the Company;
(ii) if such termination coincides with the last day of a
bonus period, a bonus for such bonus period in accordance with the terms of the
applicable incentive plan; otherwise, a bonus for the bonus period in which such
termination occurs, determined pro rata with respect to Executive's target bonus
for such bonus period based on the number of completed months of Executive's
employment by the Company during such bonus period,
(iii) the balance of any bonus earned (but not yet paid) for
any bonus period prior to the bonus period in which such termination occurs;
(iv) any amounts earned, accrued or owing but not yet paid
under Section 6, 7 or 8; and
(v) any other or additional benefits provided for in
accordance with applicable plans and programs of the Company.
(c) Termination by the Company for Cause. In the event the Company
terminates the Term of Employment for Cause, Executive shall be entitled to:
(i) Base Salary through the date of such termination;
(ii) any bonus earned (but not yet paid) for any bonus period
prior to the bonus period in which such termination occurs;
(iii) any amounts earned, accrued or owing but not yet paid
under Section 6, 7 or 8; and
(iv) any other or additional benefits provided for in
accordance with applicable plans or programs of the Company.
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(d) Termination Without Cause or Constructive Termination Without
Cause. In the event the Term of Employment is terminated by the Company without
Cause, other than due to Executive's Disability or death, or in the event the
Term of Employment is terminated due to a Constructive Termination Without
Cause, Executive shall be entitled to:
(i) Base Salary through the date of such termination;
(ii) if the date of such termination coincides with the last
day of a bonus period, a bonus for such bonus period in accordance with the
terms of the applicable incentive plan; otherwise, a bonus for the bonus period
in which such termination occurs, determined pro rata with respect to
Executive's target bonus for such bonus period based on the number of completed
months of Executive's employment by the Company during such bonus period;
(iii) the balance of any bonus earned (but not yet paid) for
any bonus period prior to the bonus period in which such termination occurs;
(iv) any amounts earned, accrued or owing but not yet paid
under Section 6, 7 or 8;
(v) any other or additional benefits provided for in
accordance with applicable plans and programs of the Company; and
(vi) to elect, within 30 days after such termination, either
(x) to cease being an employee of the Company and receive the lump-sum payment
described in section 9(d)(vi)(A) or (y) to remain an employee of the Company for
the period described in Section 9(d)(vi)(B). After Executive makes such
election, the following provisions shall apply:
(A) In the event Executive makes the election
provided in clause (x) of Section 9(d)(vi), then, subject to
the requirements of Section 9(j), the Company shall pay to
Executive in a lump sum: (1) an amount equal to Base Salary
for the period (the "Minimum Severance Period") that is the
longer of 12 months or the unexpired portion of the Term of
Employment remaining as of the time immediately prior to such
termination, plus (2) an amount equal to Average Annual Bonus
pro-rata for the Minimum Severance Period.
(B) In the event Executive makes the election
provided in clause (y) of Section 9(d)(vi), then, subject to
the requirements of Section 9(j), Executive will remain an
employee of the Company (but without any title) until the end
of the Minimum Severance Period, and the Company shall pay to
Executive Base Salary for such period plus Average Annual
Bonus pro-rata for such period; provided, however, that
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(1) if Executive dies during such period,
Executive's payments pursuant to this Section
9(d)(vi)(B) shall cease, and Executive's estate or
beneficiaries, as the case may be, will be entitled
to receive the Aggregate Life Insurance Benefits plus
a lump sum amount (which shall be paid by the Company
promptly after Executive's death) equal to the
excess, if any, of (x) the balance of the payments of
Base Salary and Average Annual Bonus that Executive
would have been entitled to receive pursuant to this
Section 9(d)(vi)(B) had Executive remained on the
Company's payroll until the end of such period over
(y) the amount of the Aggregate Life Insurance
Benefits; and
(2) if Executive accepts substantially
full-time employment with any other Person during
such period or notifies the Company in writing of
Executive's intention to terminate his employment
during such period, Executive will cease to be an
employee of the Company effective upon the earlier of
the effective date of such termination as specified
by Executive in such notice or the commencement of
such employment, and the Company shall promptly pay
to Executive a lump sum equal to the balance of the
payments of Base Salary and Average Annual Bonus that
Executive would have been entitled to receive
pursuant to this Section 9(d)(vi)(B) had Executive
remained on the Company's payroll until the end of
such period.
(C) In the event Executive makes the election
provided in clause (y) of Section 9(d)(vi), then during the
period Executive remains on the payroll of the Company,
Executive will continue to be eligible to receive the medical
and life insurance benefits which all other employees of the
Company are then entitled to receive, as such benefits may be
amended, changed or eliminated from time to time. Executive
shall not be entitled to any other perquisite or benefit
provided by the Company to its senior executives or employees
generally or otherwise specifically provided for in this
Agreement and shall not be entitled to any additional awards
or grants under any long-term incentive plan. In the event
Executive makes the election provided in clause (y) of Section
9(d)(vi), Executive will continue to be an employee of the
Company for purposes of any stock option and restricted shares
agreements until such time as Executive leaves the payroll of
the Company.
(e) Acceleration of Entitlements in Connection with a Change in Control
or Termination. Upon a Change in Control (regardless of whether Executive
continues in employment by the Company or the termination of the Term of
Employment for any reason whatsoever) Executive shall become immediately
entitled to exercise in full any stock option to acquire Stock during the
remainder of the term of such option. Without limitation of the preceding
sentence, upon the termination of the Term of Employment (including upon a Non-
Extension Event or Disability or death) otherwise than for Cause, Executive
shall become
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immediately entitled to exercise in full any stock option to acquire Stock
during the remainder of the term of such option, to the extent such option would
otherwise have vested or become exercisable within 12 months after such
termination of the Term of Employment but, unless a Change in Control shall have
occurred, all such options that have not previously expired shall automatically
expire on the date that is 12 months after such termination of the Term of
Employment. If, in connection with a Change in Control or within 12 months after
a Change in Control, the Term of Employment is terminated without Cause, other
than due to Disability or death, or due to a Constructive Termination Without
Cause, then, without limitation of the payments, benefits and elections provided
in Section 9(d) and the first sentence of this Section 9(e), upon such Change in
Control or such later termination, all amounts, entitlements and benefits
awarded to Executive or to which Executive is otherwise entitled under any
grant, plan or program of the Company but which are not yet vested shall become
fully vested except to the extent such vesting would be inconsistent with the
terms of the relevant plan. Without limitation of the benefits to Executive
pursuant to the preceding sentence or any of the other provisions of this
Agreement, if, in connection with a Change in Control or within 12 months after
a Change in Control, the Term of Employment is terminated due to a Constructive
Termination Without Cause or by the Company without Cause (other than due to
Disability or death), then, (A) the "Minimum Severance Period" for purposes of
Section 9(d) shall be not less than 24 months and (B) upon such Change in
Control (or such later termination) all amounts, entitlements and benefits
awarded to Executive or to which Executive is otherwise entitled under any
grant, plan or program of the Company but which are not yet vested shall become
fully vested except to the extent such vesting would be inconsistent with the
terms of the relevant plan. In connection with the occurrence of a Change in
Control, Executive and the Company agree to negotiate in good faith payment
arrangements and covenant changes (without reducing the total amount payable
pursuant to this Section 9(e)) designed to preserve to the Company the
deductibility for federal income tax purposes of, and eliminate any excise tax
imposed by Section 4999 of the Code payable in respect of, amounts paid or
benefits inuring to Executive pursuant to this Section 9(e).
(f) Voluntary Termination. A termination of the Term of Employment by
Executive on his own initiative, other than a termination due to death or
Disability or a Constructive Termination without Cause, shall be treated as a
Termination for Cause, and, accordingly, Executive shall have only the
entitlements provided in Section 9(c).
(g) Termination Because of Non-Renewal. In the event of a Non-
Extension Event, Executive shall be entitled to:
(i) Base Salary through the date of expiration of the Term of
Employment; (ii) if the expiration of the Term of Employment coincides with the
last day of a bonus period, a bonus for such bonus period in accordance with the
terms of the applicable incentive plan; otherwise, a bonus for the bonus period
in which the Term of Employment expires, determined pro rata with respect to
Executive's target bonus for such bonus
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period based on the number of completed months of Executive's employment by the
Company during such bonus period;
(iii) the balance of any bonus earned (but not yet paid) for
any bonus period prior to the bonus period in which the Term of Employment
expires;
(iv) any amounts earned, accrued or owing but not yet paid
under Section 6, 7 or 8;
(v) any other or additional benefits provided for in
accordance with applicable plans and programs of the Company; and
(vi) to elect within 30 days after such termination, either
(x) to cease being an employee of the Company and receive the lump-sum payment
described in section 9(g)(vi)(A) or (y) to remain an employee of the Company for
the period described in Section 9(g)(vi)(B). After Executive makes such
election, the following provisions shall apply:
(A) In the event Executive makes the election
provided in clause (x) of Section 9(g)(vi), subject to the
requirements of Section 9(j), the Company shall pay to
Executive in a lump sum: (1) an amount equal to Base Salary
for a period of 12 months (or 24 months, if a Change in
Control has occurred during the Term of Employment and the
Term of Employment has not been renewed at least once after
the Change in Control), plus (2) an amount equal to Average
Annual Bonus pro-rata for the same period.
(B) In the event Executive makes the election
provided in clause (y) of Section 9(g)(vi), subject to the
requirements of Section 9(j), Executive will remain an
employee of the Company (but without any title) for the period
of 12 months following the expiration of the Term of
Employment (or 24 months, if a Change in Control has occurred
during the Term of Employment and the Term of Employment has
not been renewed at least once after the Change in Control),
and the Company shall pay to Executive Base Salary for such
period plus Average Annual Bonus pro-rata for such period;
provided, however, that
(1) if Executive dies during such period,
Executive's payments pursuant to this Section
9(g)(vi)(B) shall cease, and Executive's estate or
beneficiaries, as the case may be, will be entitled
to receive the Aggregate Life Insurance Benefits,
plus a lump sum amount (which shall be paid by the
Company promptly after Executive's death) equal to
the excess, if any, of (x) the balance of the
payments of Base Salary and Average Annual Bonus that
Executive would have been entitled to receive
pursuant to this Section 9(g)(vi)(B) had Executive
remained on the Company's payroll until
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the end of such period over (y) the amount of the
Aggregate Life Insurance Benefits; and
(2) if Executive accepts substantially
full-time employment with any other Person during
such period or notifies the Company in writing of
Executive's intention to terminate Executive's
employment during such period, Executive will cease
to be an employee of the Company, effective upon the
earlier of the effective date of such termination as
specified by Executive in such notice or the
commencement of such employment, and the Company
shall promptly pay to Executive a lump sum equal to
the balance of the payments of Base Salary and
Average Annual Bonus that Executive would have been
entitled to receive pursuant to this Section
9(g)(vi)(B) had Executive remained on the Company's
payroll until the end of such period.
(C) In the event Executive makes an election provided in
clause (y) of Section 9(g)(vi), then during the period Executive
remains on the payroll of the Company, Executive will continue to be
eligible to receive the medical and life insurance benefits all other
employees of the Company are then entitled to receive, as amended,
changed or eliminated, from time to time. Executive shall not be
entitled to any other perquisite or benefit provided by the Company to
its senior executives generally or otherwise specifically provided for
in this Agreement and shall not be entitled to any additional awards or
grants under any long-term incentive plan. In the event of an election
pursuant to clause (y) of Section 9(d)(vi), Executive will continue to
be an employee of the Company for purposes of any stock option and
restricted shares agreements until such time as Executive leaves the
payroll of the Company.
(h) No Mitigation; No Offset. In the event of any termination of the
Term of Employment under this Section 9, Executive shall be under no obligation
to seek other employment and there shall be no offset against amounts due
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment obtained by Executive except as specifically provided
in this Section 9.
(i) Nature of Payments. Any amounts due under this Section 9 are in the
nature of severance payments considered to be reasonable by the Company and are
not in the nature of a penalty.
(j) General Release. In partial consideration for, and as a condition
of, the Company's obligation to make the payments described in Sections 9(d)(vi)
and 9(g)(vi), Executive shall execute and deliver to the Company a release of
all claims Executive shall then have against the Company, its Affiliates and
their related Persons arising out of or in connection with Executive's
employment or termination of employment, including, but not limited to, a
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release of all claims of discrimination. The Company will deliver such release
to Executive at or about the time it delivers or receives the notice of
termination, and Executive shall execute and deliver such release to the Company
within 21 days thereafter, except that in case of expiration of the Term of
Employment following a Non-Extension Event, the release will be delivered to
Executive upon such expiration and shall be executed and delivered by Executive
within 21 days after such expiration. If Executive fails to execute and deliver
such release to the Company within such 21-day period, or if Executive revokes
Executive's consent to such release as provided for therein, Executive will not
be eligible to receive any further payments from the Company pursuant to Section
9(d)(vi) or 9(g)(vi).
(k) Other Severance. In the event the Company's written severance pay
policy applicable to Executive provides for greater severance pay and benefits
than are provided for in Section 9(d) or 9(g), Executive may elect to receive
termination pay and benefits under the terms and conditions of such policy in
lieu of the payments and benefits under Section 9(d) or 9(g). It is understood
by the Parties that Executive shall not be entitled to both the payments and
benefits under the severance pay policy and those available under Section 9(d)
or 9(g). Notwithstanding the foregoing, in addition to being entitled to the
greater of the payments and benefits under the severance pay policy and under
Section 9(d) or 9(g), as applicable, Executive shall be entitled to professional
outplacement services (including office space and secretarial services), at a
cost not exceeding 10% of Executive's annual Base Salary, in accordance with the
Company's policies regarding outplacement services; provided, however, that
payments pursuant to this sentence shall be made only for actual outplacement
services, and Executive shall not have the option to elect to receive all or
part of the maximum allowances therefor in lieu of outplacement services.
(l) Relocation. Notwithstanding the provisions of Section 9(k), in the
event Executive becomes entitled to payments and benefits under Section 9(b),
9(d) or 9(g), Executive shall also be entitled to receive from the Company
relocation assistance payments, consisting of payment or reimbursement of:
(i) costs incurred in the sale of Executive's primary
residence in the Dallas area, including sales commissions not to exceed local
custom, and all other normal closing costs in connection with such sale and, in
the event the gross proceeds from the sale of Executive's primary residence are
less than the contract purchase price paid by Executive on his purchase of such
residence, the Company will reimburse Executive for the difference less amounts
payable to Executive pursuant to the preceding clause of this paragraph (i);
(ii) all reasonable moving expenses to another location in the
United States or Canada, including packing, transport, temporary storage and
unpacking (including the cost of moving one vehicle), all through movers or
moving agents designated or approved by the Company;
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(iii) reasonable costs (not exceeding costs of economy air
fare and appropriate lodging) of one house-hunting trip for Executive and
spouse; and
(iv) a tax "gross-up" for all sums paid to Executive pursuant
to clauses (i) through (iv) of this paragraph (l) that are includable in
Executive's taxable income for U.S. Federal Income Tax purposes (i.e., an amount
which, after the payment of the U.S. Federal, state and local income taxes to
which Executive is subject on the payments made to or for Executive's benefit
pursuant to this paragraph (l), calculated at the maximum rate applicable to
individuals, irrespective of the actual tax payments made by Executive, will be
equal to the costs for which reimbursement is to be provided pursuant to clauses
(i) through (iii) of this paragraph (l));
provided, however, that payments pursuant to this paragraph (l) shall be made
only for actual expenses in connection with Executive's relocation outside the
Dallas area, and Executive shall not have the option to elect to receive all or
part of the maximum allowances therefor in lieu of relocation expenses; and
provided, further, that such payments shall only be available in respect of
relocation that occurs within (x) nine months after the end of the Term of
Employment and (y) February 28, 2002.
10. Indemnification.
(a) 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 Executive is or was a director, officer or employee of the Company or
is or was serving at the request of the Company as a director, officer, member,
employee or agent of another Person, including service with respect to employee
benefit plans, whether or not the basis of such Proceeding is Executive's
alleged action in an official capacity while serving as a director, officer,
member, employee or agent, Executive shall be indemnified and held harmless by
the Company to the fullest extent permitted or authorized by the Company's
certificate of incorporation or bylaws 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 (other than
such as may be imposed with respect to compensation received by Executive) or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by Executive in connection therewith, and such indemnification shall
continue as to Executive even if Executive has ceased to be a director, member,
employee or agent of the Company or other Person and shall inure to the benefit
of Executive's heirs, executors and administrators. The Company shall advance to
Executive to the extent permitted by law all reasonable costs and expenses
incurred by him in connection with a Proceeding within 20 days after receipt by
the Company of a written request, with appropriate documentation, for such
advance. Such request shall include an undertaking by Executive to repay the
amount of such advance if it shall ultimately be determined that Executive is
not entitled to be indemnified against such costs and expenses.
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(b) 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 its other executive officers.
(c) Promptly after receipt by Executive of notice of any claim or the
commencement of any action or proceeding with respect to which Executive is
entitled to indemnity hereunder, Executive shall notify the Company in writing
of such claim or the commencement of such action or proceeding, and the Company
shall (i) assume the defense of such action or proceeding, (ii) employ counsel
reasonably satisfactory to Executive and (iii) pay the reasonable fees and
expenses of such counsel. Notwithstanding the preceding sentence, Executive
shall be entitled to employ counsel separate from counsel for the Company and
from any other party in such action if Company counsel reasonably determines
that a conflict of interest exists which makes representation by counsel chosen
by the Company not advisable. In such event, the reasonable fees and
disbursements of such separate counsel for Executive shall be paid by the
Company to the extent permitted by law.
(d) After the Term of Employment, (i) at the request of the Company,
Executive shall cooperate with and assist the Company (to the extent that such
activities do not unreasonably interfere with the performance of Executive's
other business activities or employment) to prepare for or defend against any
action, suit, proceeding or claim brought or threatened to be brought against
the Company or to prepare for or institute any action, suit, proceeding or claim
to be brought or threatened to be brought against a third party arising out of
or based upon any matter or thing whatsoever arising out of or which may be
related to matters as to which Executive has or acquires knowledge or
information by reason of his employment by the Company or any of its
Subsidiaries, and (ii) upon the request of Executive, the Company shall
reimburse Executive for all reasonable travel, legal and other out-of-pocket
expenses that may be incurred by Executive related to assisting the Company, at
its request, to prepare for or defend against any such action, suit, proceeding
or claim brought or threatened to be brought against the Company or to prepare
for or institute any action, suit, proceeding or claim to be brought or
threatened to be brought against a third party and in providing evidence,
producing documents or otherwise participating in any such action, suit,
proceeding or claim.
11. Effect of Agreement on Other Benefits.
Except as specifically provided in this Agreement, the existence of
this Agreement shall not prohibit or restrict Executive's entitlement to full
participation in the employee benefit and other plans or programs in which
senior executives of the Company are eligible to participate.
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12. Confidentiality.
Executive acknowledges that Executive is bound by that certain
nondisclosure agreement executed by Executive upon the commencement of his
employment with the Company and that the terms thereof shall not be modified or
affected by this Agreement.
13. Non-Competition.
(a) During the Term of Employment and (unless the Term of Employment
expires following a Non-Extension Event or is terminated by the Company without
Cause or voluntarily by Employee due to a Constructive Termination Without
Cause) for a period of nine months thereafter, Executive shall not, directly or
indirectly, except when acting on behalf of the Company, whether as an employee,
consultant, partner, principal, agent, distributor, representative, stockholder
or otherwise, plan, develop, conduct or otherwise engage in the MDU Business in
any metropolitan area world-wide in which the Company or any Subsidiary then
conducts or is actively planning to conduct the MDU Business (except that he may
be a stockholder holding not more than a 1% common stock interest in a Person
whose shares are publicly traded and which engages in the MDU Business in any
such area). Notwithstanding the foregoing, Executive shall be free at any time
following the Term of Employment to accept employment with or provide other
services to any Person whose business includes the MDU Business but only if (i)
the MDU Business is not the principal or predominant business of such Person and
(ii) the services of Executive do not principally or predominantly relate to the
MDU Business. By way of example only, if the Term of Employment were to end on
the date of this Agreement, Executive would be free to be employed by a typical
incumbent local exchange or long distance carrier or by a typical franchised
cable operator for so long as Executive's services did not principally or
predominantly relate to the provision of video and telecommunications services
to residential multiple dwelling units in the markets in which the Company now
operates or is actively planning to operate.
(b) During the Term of Employment and for a period of 12 months
thereafter, Executive shall not, directly or indirectly, (i) solicit any
customer of the Company or any Subsidiary to do business with any Person that
engages in the MDU Business or (ii) solicit any Person, other than his
secretary/administrative assistant, who is employed by the Company or any
Subsidiary or who was employed by the Company or any Subsidiary within 12 months
of such solicitation to (A) terminate his or her employment with the Company or
any Subsidiary, (B) accept employment with anyone other than the Company or any
Subsidiary or (C) in any manner interfere with the business of the Company or
any Subsidiary.
(c) Executive acknowledges that the Company has no adequate remedy at
law and would be irreparably harmed if Executive breaches or threatens to breach
any of the provisions of Section 12 or Section 13(a) or 13(b), and therefore
Executive agrees that the Company or any Subsidiary, as the case may be, shall
be entitled to temporary or permanent
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mandatory or injunctive relief to terminate or forestall any breach or
threatened breach of any of those provisions and to specific performance of the
terms of each of those provisions, without the need to demonstrate irreparable
injury or post bond or other security. Executive further agrees that he shall
not, in any proceeding seeking injunctive or other equitable relief to enforce
the provisions of Section 12 or Section 13(a) or 13(b), raise the defense that
the Company or any Subsidiary has an adequate remedy at law. Nothing in this
Section 13(c) shall be construed to prohibit the Company or any Subsidiary from
pursuing any other rights or remedies available to it at law or in equity or
which may be otherwise available to it.
(d) If it is determined that any of the provisions of this Section 13,
or any part thereof, is unenforceable because of the duration or geographical
scope of such provision, it is the intention of the Parties that the duration or
scope of such provision, as the case may be, shall be reduced so that such
provision becomes enforceable and, in its reduced form, such provision shall
then be enforceable and shall be enforced.
14. Intellectual Property.
Any processes, inventions, ideas, know-how and other similar data
created or developed by Executive while employed by the Company which relate to
the business then conducted by the Company or any of its Subsidiaries shall be
the Company's exclusive and absolute property, and Executive hereby assigns to
the Company, now and hereafter, all of his right, title and interest to any and
all of the same. Any work in connection with the services rendered by Executive
hereunder shall be considered "work made for hire" under the Copyright Law of
1976 or any successor law, and the Company shall be the owner of such work as if
the Company were the author of such work.
15. Documents; Conduct; References.
(a) Executive hereby expressly covenants and agrees that, following
termination of the Term of Employment for any reason, or any time, upon the
Company's request, Executive will promptly return to the Company all property of
the Company and its Subsidiaries in his or her possession or control (whether
maintained at his or her office, home or elsewhere), including, without
limitation, all copies of all management studies, business or strategic plans,
budgets, notebooks and other printed, typed electronically stored or written
materials, documents, diaries, disks, calendars and data of or relating to the
Company or its Subsidiaries or their respective personnel or affairs.
(b) Executive hereby expressly covenants and agrees that Executive will
not at any time, during or after the Term of Employment, publicly denigrate,
ridicule or intentionally criticize the Company or any of its Subsidiaries or
any of their respective products or services, properties, employees, officers or
directors, including, without limitation, by way of news interviews or the
expression of personal view, opinions or judgments to the news media.
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(c) The Company hereby expressly covenants and agrees that the Company
will not at any time, during or after the Term of Employment, publicly
denigrate, ridicule or intentionally criticize Executive, including, without
limitation, by way of news interviews or the expression of personal views,
opinions or judgments to the news media.
(d) The Company hereby expressly covenants and agrees that, following
the Term of Employment, the Company will, unless otherwise requested by
Executive in any instance or required by law, provide to any prospective
employer seeking information regarding Executive's employment with the Company a
neutral reference in accordance with the general policies of the Company
applicable to requests for employment references.
16. Acknowledgment of Representation by Counsel.
The Parties acknowledge that they have been represented by counsel or
knowingly waive their right to be represented by counsel with regard to this
Agreement and the subject matter hereof. Each Party agrees and acknowledges that
he or it has not relied upon any tax advice, legal counsel or business advice
provided by the other Party.
17. Assignability; Binding Nature.
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of Executive) and
assigns. No rights or obligations of the Company under this Agreement may be
assigned or transferred by the Company, except that such rights or obligations
may be assigned or transferred pursuant to a merger or consolidation in which
the Company is not the surviving corporation, or the sale or liquidation of all
or substantially all of the assets of the Company, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee assumes the liabilities, obligations and
duties of the Company, as contained in this Agreement, either contractually or
by operation of law. The Company further agrees that, in the event of a sale of
assets or liquidation as described in the preceding sentence, it shall take
whatever action it legally can in order to cause such assignee or transferee to
expressly assume the liabilities, obligations and duties of the Company
hereunder. No rights or obligations of Executive under this Agreement may be
assigned or transferred by Executive other than Executive's rights to
compensation and benefits.
18. Entire Agreement.
Except as herein otherwise expressly provided, this Agreement contains
the entire understanding and agreement between the Parties concerning the
subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between the
Parties with respect thereto, including any agreement between Executive and any
Affiliate of the Company dated prior to the date hereof.
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19. Amendment or Waiver.
No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by Executive and an authorized officer of the
Company. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
signed by Executive or an authorized officer of the Company, as the case may be.
20. Severability.
In the event that any provision or portion of any provision of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions and portions remaining of any
provisions of this Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by law.
21. Beneficiaries/References.
Executive shall be entitled to select (and change, to the extent
permitted under any applicable law) a beneficiary or beneficiaries to receive
any compensation or benefit payable hereunder following Executive's death by
giving the Company written notice thereof. In the event of Executive's death or
a judicial determination of Executive's incompetence, reference in this
Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.
22. Governing Law/Jurisdiction.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Texas without reference to principles
of conflict of laws.
23. Resolution of Disputes.
Any disputes arising under or in connection with this Agreement shall
be resolved by binding arbitration before a single arbitrator, to be held in
Dallas, Texas, in accordance with the rules and procedures of the American
Arbitration Association. Judgment upon the award rendered by the arbitrator
shall be final and subject to appeal only to the extent permitted by law. Each
Party shall bear its or his own expenses incurred in connection with any
arbitration. Anything to the contrary notwithstanding, each Party has the right
to proceed with a court action for injunctive relief or relief from violations
of law not within the jurisdiction of an arbitrator.
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24. Notices.
Any notice required or permitted hereunder to be given to a Party shall
be effective only if given in writing and shall be deemed to have been given
when delivered personally or sent by certified or registered mail, postage
prepaid, return receipt requested or by Federal Express or other similar
service, duly addressed to the Party concerned at the address indicated below or
to such changed address as such Party may hereafter specify by notice to the
other Party:
If to the Company:
OpTel, Inc.
0000 X. Xxxxxxxxxxx Xxxx, #0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
If to Executive:
000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
25. Headings.
The captions or headings of the sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
26. Execution of Agreement and Further Actions.
This Agreement may be executed in several counterpart copies each of
which shall constitute an original and the same instrument notwithstanding that
both Parties are not signatories to the same counterpart. The Parties agree to
execute such other documents and to take such other action as may from time to
time be necessary or appropriate to carry out the intent of this Agreement,
provided that the same are not inconsistent with the provisions hereof.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
OPTEL, INC.
By:
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XXXXXXXX XXXXXXXXXX
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