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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
WITH
XXXXXX X. XXXXXX
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of July 29, 1999, but is effective for all purposes as of the Commencement
Date (as hereinafter defined), by and between CLASSIC CABLE, INC., a Delaware
corporation (the "Employer"), and XXXXXX X. XXXXXX, residing at (the
"Employee").
R E C I T A L S:
Simultaneously with the execution of this Agreement, the Employer has
purchased and acquired all of the shares of Xxxxxx Group, Inc., a Delaware
corporation.
The Employer recognizes the important contributions that the Employee
has made to Xxxxxx Group, Inc. as an officer and key employee.
The Employer wishes to take steps to ensure that the Employer will
continue to have the Employee's services available to the Employer and its
subsidiaries.
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. The Employer hereby employs the Employee, and the
Employee hereby accepts such employment, upon the terms and subject to the
conditions set forth in this Agreement.
2. Term. The term of employment under this Agreement shall commence on
July 28, 1999 (the "Commencement Date") and shall continue through July 27,
2000, provided, however, that beginning on the Commencement Date, and on each
day thereafter, the term of this Agreement shall be extended by one additional
day, unless either party to this Agreement gives the other written notice of
termination of employment.
3. Compensation; Reimbursement.
(a) The Employer shall pay to the Employee as compensation
for all services rendered by the Employee during the term of this
Agreement a basic annualized salary of $175,000 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 the Employer. The Board of
Directors of the Employer shall have the right to increase the
Employee's compensation from time to time by action of the Board of
Directors. In addition, the Board of Directors of the Employer, in its
sole discretion, may, with respect to any year during the term hereof,
award a bonus or bonuses to the Employee in addition to the bonuses
provided for in Section 3(b).
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(b) In addition to the Basic Salary paid pursuant to Section
3(a), the Employer may pay as incentive compensation an annual bonus based upon
the Employee's performance, as determined each year by the Board of Directors
of the Employer.
(c) The Employer shall reimburse the Employee for all
reasonable expenses incurred by the Employee in the performance of his duties
under this Agreement; provided, however, that the Employee must furnish to the
Employer an itemized account, satisfactory to the Employer, in substantiation
of such expenditures.
(d) The Employee shall be entitled to the use of (i) a
corporate vehicle, (ii) the use of a country club membership in the name of the
Employer, in either Tyler, Texas or Austin, Texas, subject to the approval of
the Employer; provided that Employer shall pay the membership fee and
reasonable monthly maintenance fees and Employee shall pay all other costs of
such membership; and (iii) such fringe benefits, including, but not limited to,
medical and other insurance benefits, as may be provided from time to time by
the Employer to other senior officers of the Employer.
4. Duties. The Employee is engaged as the Executive Vice
President of Operations of the Employer and of the Employer's various
subsidiaries. In addition, the Employee shall have such other duties and hold
such other offices as may from time to time be reasonably assigned to him by
the Chief Executive Officer and/or President of the Employer.
5. Extent of Services; Vacations and Days Off.
(a) During the term of his employment under this Agreement,
the Employee shall devote substantially all of his time, energy and attention
during regular business hours to the benefit and business of the Employer in
performing his duties pursuant to this Agreement.
(b) The Employee shall be entitled to vacations with pay and
to such personal and sick leave with pay in accordance with the policy of the
Employer as may be established from time to time by the Employer and applied to
other senior officers of the Employer.
6. Facilities. The Employer shall provide the Employee with a
fully furnished office, and the facilities of the Employer shall be generally
available to the Employee in the performance of his duties pursuant to this
Agreement.
7. Termination on Death, Illness or Incapacity.
(a) If the Employee dies during the term of his employment,
the Employer shall pay to the estate of the Employee the Basic Salary that
would have otherwise been paid to the Employee through the end of the month in
which his death occurs. The Employer shall have no additional financial
obligation under this Agreement to the Employee or his estate. After receiving
the payments provided in this subparagraph (a), the Employee and his estate
shall have no further rights under this Agreement.
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(b) (i) During any period of disability, illness or
incapacity during the term of this Agreement which renders the Employee at
least temporarily unable to perform the services required under this Agreement
for a period which does not exceed ninety (90) continuous days in any one-year
period, the Employee shall receive the compensation payable under Section 3(a)
of this Agreement plus any bonus compensation earned up to the date of
termination but not yet paid, less any benefits received by him under any
disability insurance carried by or provided by the Employer.
(ii) The term "permanent disability" as used in this
Agreement shall mean the inability of the Employee, as determined by the Board
of Directors of the Employer, 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 the
Employee's employment under this Agreement upon ten (10) days' prior written
notice. If any determination of the Board of Directors with respect to
permanent disability is disputed by the Employee, the parties hereto agree to
abide by the decision of a panel of three physicians. The Employee and the
Employer shall each appoint one member, and the third member of the panel shall
be appointed by the other two members. The Employee agrees to make himself
available for and to submit to examinations by such physicians as may be
directed by the Employer. Failure to submit to any such examination shall
constitute a breach of a material part of this Agreement.
8. Other Terminations.
(a) (i) The Employee may terminate his employment hereunder
upon giving not more than thirty (30) days' nor less than fifteen (15) days'
prior written notice to the Employer.
(ii) If the Employee gives notice pursuant to Section
8(a) above, the Employer shall have the right to relieve the 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 the
Employer).
(b) The Employer may terminate the Employee's employment
hereunder at any time, without prior notice.
(c) If the Employer shall terminate the employment of the
Employee without Good Cause (as defined below) effective on a date earlier than
the termination date provided for in Section 2, the Employee shall have the
nonforfeitable right to receive the Basic Salary, matching 401-(k)
contributions consistent with past practice (to the extent permitted by law),
health insurance and other existing benefits, paid monthly, that he is entitled
to for the remainder of the term of this Agreement; provided that,
notwithstanding such termination of employment, the Employee's covenants set
forth in Sections 9, 10 and 11 are intended to and shall remain in full force
and effect.
(d) (i) If the employment of the Employee is terminated for
Good Cause, or if the Employee voluntarily terminates his employment, the
Employer shall pay to the Employee any Basic Salary earned but not paid to the
Employee prior to the effective date of such termination.
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Under such circumstances, such payment shall be in full and complete discharge
of any and all liabilities or obligations of the Employer to the Employee
hereunder, and the Employee shall be entitled to no further benefits under this
Agreement.
(ii) "Good cause" shall include:
(1) the Employee's conviction of a criminal offense
that has a material adverse effect upon the business or reputation or the
Employer or any affiliate of the Employer;
(2) commission by the Employee of a material breach
of his duty of loyalty to the Employer, any affiliate of the Employer or
Sections 9, 10 or 11 of this Agreement; and
(3) the willful failure by the Employee to
substantially perform the Employee's duties specified hereunder or such other
duties as may be reasonably defined by the Chief Executive Officer or President
of the Employer from time to time (other than any such failure resulting from
the 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 the Employee by the Chief Executive Officer or President of the
Employer; or
(4) any fraud, material misappropriation, or
embezzlement by the Employee in connection with the operation or management of
the business of the Employer.
(e) The parties agree that, because there can be no exact
measure of the damage that would occur to the Employee as a result of a
termination by the Employer of the 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 the Employer's
termination of the Employee's employment without good cause; and provided that
Employee shall be required to use all reasonable efforts to mitigate his
damages.
(f) The Employer's obligation to make any of the payments or
provide any of the benefits described above is conditioned upon the Employee
delivering a full release of any known or unknown claims arising out of or
related to this Agreement or the Employee's employment or termination of
employment with the Employer in a form which is reasonably acceptable to the
Employer.
9. Disclosure. The Employee agrees that during the term of his
employment by the Employer, he will disclose and disclose only to the Employer
all material ideas, methods, plans, developments or improvements known by him
which relate directly or indirectly to the business of the Employer, whether
acquired by the Employee before or during his employment by the Employer.
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.
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10. Confidentiality. The Employee agrees to keep in strict secrecy and
confidence any and all information the Employee assimilates or to which he has
access during his employment by the Employer and which has not been publicly
disclosed and is not a matter of common knowledge in the fields of work of the
Employer. The Employee agrees that both during and after the term of his
employment by the Employer, he will not, without the prior written consent of
the 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. The Employee
hereby acknowledges that, during and solely as a result of his employment by
the Employer, he has received and shall continue to 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 the Employee by the Employer as a result of
the Employee's employment, as outlined in the previous sentence, the Employee
hereby agrees as follows:
(a) During a period starting on the date hereof and ending
two (2) years following the termination of his employment under this Agreement,
the Employee shall not, without the prior written consent of the Employer, (i)
directly or indirectly engage in any business that competes with the Employer
or any Affiliate of the 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 the Employer or any
Affiliate of the Employer. The 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 the 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.
(b) During his employment with the Employer and, except as
may be otherwise herein provided, for a period of two (2) years following the
termination of his employment with the Employer, regardless of the reason for
such termination, the 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 (1) solicit any of the
employees of the Employer to terminate their employment or (2) accept
employment with or seek remuneration by any of the clients or customers of the
Employer with whom the Employer did business during the term of the Employee's
employment.
(c) The Employee agrees that, during the term of this
Agreement and the non-competition period, he will not make or publish any
statement which is, or may reasonably be considered to be, disparaging of the
Employer, its subsidiaries or affiliates, or directors, officers, employees or
the operations, products or services of the Employer or any of its subsidiaries
or affiliates, except in connection with the performance of his services
hereunder to the extent the Employee makes the statement to employees of the
Employer or its affiliates in good faith in furtherance of the Employer's
business.
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(d) The period of time during which the 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 the
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 the
Employee to comply with such covenants, the Employer would not have agreed to
enter into this Agreement. Such covenants by the Employee shall be construed as
agreements independent of any other provision in this Agreement. The existence
of any claim or cause of action of the Employee against the Employer, whether
predicated on this Agreement, or otherwise, shall not constitute a defense to
the enforcement by the Employer of such covenants.
(f) It is agreed by the 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.
The Employer and the 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 the Employee. The Employer and the Employee agree that the
foregoing covenants are appropriate and reasonable when considered in light of
the nature and extent of the business conducted by the Employer.
12. Specific Performance. The Employee agrees that damages at law will
be an insufficient remedy to the Employer if the Employee violates the terms of
Sections 9, 10 or 11 of this Agreement and that the Employer would suffer
irreparable damage as a result of such violation. Accordingly, it is agreed
that the 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 the Employer. The Employee agrees to pay to the Employer
all costs and expenses incurred by the 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. The 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 the Employee is a party or by which the Employee is or may be bound.
14. Waiver of Breach. The waiver by the Employer of a breach of any of
the provisions of this Agreement by the Employee shall not be construed as a
waiver of any subsequent breach by the Employee.
15. Assignment. The rights and obligations of the Employer under this
Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Employer. This
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Agreement is a personal employment contract and the rights, obligations and
interests of the Employee hereunder may not be sold, assigned, transferred,
pledged or hypothecated.
16. Entire Agreement. This Agreement contains the entire agreement and
supersedes all prior agreements and understandings, oral or written, between
the 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.
17. 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.
18. 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 Cable, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: President
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With copies to: Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
To the Employee: at the address stated in the
preamble hereto
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first-above written.
CLASSIC CABLE, INC.
By: /s/ Xxxxxx X. Seach
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Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
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