SEPARATION AND CONSULTING AGREEMENT
THIS AGREEMENT (the "Agreement") made and entered into effective as of
September 1, 1996, by and between OpTel, Inc., a Delaware corporation with its
principal office at 0000 X. Xxxxxxxxxxx Xxxx, Xxxxxx, Xxxxx 00000 (the
"Company"), and Xxxxx X. Xxxxxx, an individual residing in Chapel Hill, North
Carolina ("Consultant");
WITNESSETH:
WHEREAS, Consultant has served as Chairman of the Board of Directors of the
Company (the "Board") since April 1, 1995; and
WHEREAS, Consultant has resigned from the office of Chairman of the Board,
from membership in the Board and from any executive functions with the Company
effective as of the date of this Agreement; and
WHEREAS, the Company agrees to provide certain consideration to Consultant
in exchange for a waiver and release of claims by Consultant; and
WHEREAS, the Company desires to secure the further services of Consultant
in the capacity as a consultant and advisor to the Company; and
WHEREAS, in consideration of such arrangements, the parties hereto are
willing to enter into this Agreement upon the terms and conditions herein set
forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the parties hereto agree as follows:
1. Engagement as Consultant: Upon the mutual agreement of the parties from
time to time, Consultant agrees to serve the Company as an independent
contractor under the terms and conditions herein provided. Consultant agrees to
perform such services as shall be requested by the Company and agreed to by
Consultant, at such times as are mutually agreeable to Consultant and the
Company; provided, however, that Consultant shall not be obligated to perform
services to the extent such services would interfere with Consultant's pursuit
of other business interests not inconsistent with the terms of this Agreement.
2. Specific Transition Services: Consultant agrees that, in connection with
winding up his duties as Chairman of the Board, he will continue to pursue a
corporate relationship with Lincoln Properties Company, and will use his
continuing good faith best efforts to assist the Company to negotiate a master
agreement under which the Company will provide
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telecommunications services to properties owned and managed by Lincoln
Properties Company in the Company's markets.
3. Consideration for Execution of Agreement and Waiver and Release: In
consideration for Consultant's execution of this Agreement and the Waiver and
Release attached hereto as Attachment A, Consultant shall be entitled to the
consideration set forth in this Paragraph 3. This consideration is provided
subject to the binding execution by Consultant of the attached Waiver and
Release and shall constitute payment in full of any claims by Consultant in any
and all capacities accrued through the date of this Agreement.
a. Lump Sum. The Company shall pay Consultant a one-time lump-sum
payment of $70,000. Such amount shall be paid as soon as practicable upon
the expiration of the Waiver Revocation Period described in the Waiver and
Release with no revocation thereof (the "Waiver Effective Date").
b. Warrant Award. The Company shall issue to Consultant, pursuant to
the Warrant Agreement attached hereto, a warrant (the "Warrant") to acquire
1,360 shares of Class A common stock of the Company at an exercise price of
$984 per share, which shall become effective as of the Waiver Effective
Date. The Warrant shall not be treated as an incentive stock option, but
shall be treated as a nonqualified stock option under Section 83 of the
Internal Revenue Code of 1986, as amended. The Warrant shall be exercisable
as of the Waiver Effective Date, and shall terminate and expire on August
31, 1999, unless earlier terminated pursuant to its terms. The Warrant
shall be subject to all other terms and conditions set forth in the Warrant
Agreement.
4. Further Consideration for Consulting Services: In addition to the
consideration described in Paragraph 3 above, Consultant shall be entitled to
further consideration for consulting services as described in this Paragraph 4.
a. Consulting Payments. Consultant shall be entitled to payment at a
daily rate of $3,500 for every day during which Consultant performs any
consulting duties described in Paragraphs I and 2 above; provided, however,
that the maximum payment for services rendered during the month of
September, 1996 shall be $ 15,000.
b. Reimbursement for Expenses. The Company will reimburse Consultant
for all reasonable out-of-pocket expenses incurred by him in connection
with his performance of services under this Agreement in accordance with
the Company's standard policies, practices and procedures. Consultant shall
submit to the Company claims for reimbursement and documentation of
expenses within sixty days of the date on which such expenses are incurred.
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c. Employee Benefits. Consultant will not be eligible to participate
in any employee benefit plans, programs or arrangements maintained by the
Company.
5. Confidentially; Noncompetition; Nonsolicitation:
A. Confidentiality: Consultant recognizes and acknowledges that in the
course of his duties with the Company and as a result of the position of trust
he has held and may continue to hold with the Company he has obtained or will
obtain private or confidential information and proprietary data relating to the
Company and its affiliates. Consultant agrees that for a period of five years
from the effective date of this Agreement, he will not, either directly or
indirectly, disclose or use confidential information acquired during his
relationship with the Company except in connection with his duties under this
Agreement or with the prior written consent of the Chairman of the Board of
Directors or unless compelled to do so by process of law. Furthermore,
Consultant agrees that, if compelled by process of law to violate the provisions
of this Paragraph 5. Consultant will provide prior written notice to the Company
in accordance with the notice provisions of Paragraph 11 of this Agreement so as
to permit the Company to seek a protective order or other protective measure;
and Consultant agrees to provide such notice as soon as reasonably practicable
and with all due diligence recognizing that disclosure of confidential
information could be harmful to the Company. Finally, Consultant agrees that the
provisions of this Agreement shall constitute "confidential information" as
described in this Paragraph 5.
B. Noncompetition: Unless and to the extent that the Company gives
Consultant a written waiver, Consultant agrees that for a period of one year
from the effective date of this Agreement, he will not (whether acting alone or
in concert with others, including actions as a member of a partnership or a
joint venture or an investor in or a holder of securities of or an employee of,
any corporation or other entity, or otherwise), (i) directly or indirectly
engage in, (ii) have any interest in any person, firm, or corporation (except
the Company) that directly or indirectly engages in, or (iii) perform any
services for any person, firm or corporation (except the Company) that directly
or indirectly engages in the "Business" (as defined in Paragraph 5.F. below) in
the states of Florida, Texas, Colorado, Illinois, Arizona or California.
Notwithstanding the foregoing, however, this provision shall not prohibit
Consultant (i) from holding as a passive investment up to 5% of the outstanding
securities of any class of a company whose securities are publicly traded, so
long as Consultant does not serve as a member of the board of directors or an
executive officer of or otherwise provide advice or services to such company,
(ii) from continuing to hold an investment interest in Vanguard Communications,
L.P., and (iii) from serving as Chairman of the Board of Directors and holding
an indirect investment interest in Campuslink Communications Systems, Inc.
("Campuslink"), for so long as Campuslink is not in violation of any agreement
with the Company. Any request for a written waiver of any part of this covenant
shall be submitted in writing to the Company in accordance with the provisions
of Section 11. The Company agrees to consider any such request within 10
business days of its receipt. The failure affirmatively to consent to any such
request shall be deemed disapproval of the request. The Company agrees to act
reasonably in considering any such request.
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C.. Nonsolicitation: Consultant agrees that he shall not, directly or
indirectly, during the period commencing on the effective date of this Agreement
and ending May 10, 1999, (a) take any action to solicit or divert any business
or customers away from the Company or its affiliates, (b) induce customers,
suppliers, agents or other persons under contract or otherwise associated or
doing business with the Company or its affiliates to terminate, reduce or alter
any such association or business with or from the Company or its affiliates
and/or (c) induce any person in the employment of the Company or its affiliates
or any consultant to the Company or its affiliates to terminate such employment
or consulting arrangement or accept employment or enter into any consulting
arrangement with anyone other than the Company or its affiliates.
D. Enforcement: Consultant hereby agrees that a violation of the provisions
of Paragraph 5 or 6 would cause irreparable injury to the Company and its
affiliates, for which they would have no adequate remedy at law. Any controversy
or claim arising out of or relating to the provisions of this Paragraph 5 or 6,
or any alleged breach of Paragraph 5 or 6, shall be settled by binding
arbitration in accordance with Paragraph 9B. Notwithstanding the foregoing,
however, the Company specifically retains the right before, during or after the
pendency of any arbitration to seek injunctive relief from a court having
jurisdiction for any actual or threatened breach of Paragraph 5 or 6 without
necessity of complying with any requirement as to the posting of a bond or other
security (it being understood that Consultant hereby waives any such
requirement). Any such injunctive relief shall be in addition to any other
remedies to which the Company may be entitled at law or in equity or otherwise,
and the institution and maintenance of an action or judicial proceeding for, or
pursuit of, such injunctive relief shall not constitute a waiver of the right of
the Company to submit the dispute to arbitration.
If any provision of Paragraph 5 or 6 is found by either a court of
competent jurisdiction or the arbitrators to be unreasonably broad, oppressive
or unenforceable, such court or arbitrators (i) shall narrow the scope of the
Agreement in order to ensure that the application thereof is not unreasonably
broad, oppressive or unenforceable, and (ii) to the fullest extent permitted by
law, shall enforce such Agreement as though reformed.
E. Survival: The provisions of Paragraphs 5 and 6 shall survive the
termination of this Agreement regardless of the date, cause or manner of such
termination.
F. Business: For purposes of this paragraph 5, the term "Business" means
the acquisition, development and operation of systems employing 18 Ghz spectrum
and/or any other media (including, without limitation, SMATV and coaxial or
fiber-optic cable but excluding systems employing facilities licensed in the
ITFS, MDS or MMDS) for or in connection with the delivery of private cable
television, telephone and other communication services to (i) residents of MDUs
(ii) Institutions, and (iii) Commercial Facilities. "Commercial Facilities"
means commercial, governmental and industrial offices and other facilities, each
having 25 or more first outlets. "Institutions" means hotels, motels and prisons
and educational and hospital facilities, each having 25 or more first outlets.
"MDUs" means, collectively multiple dwelling units (comprising high-rise and
low-rise apartment, condominium and cooperative complexes, town-house
developments, mobile home parks and congregate care and other similar
facilities), each containing 25 or more dwelling units.
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6. Nondisparagement: As a material inducement to the Company to enter into
this Agreement, Consultant agrees that he will not (i) publicly criticize or
disparage the Company or any affiliate, or privately criticize or disparage the
Company or any affiliate in a manner intended or reasonably calculated to result
in public embarrassment to, or injury to the reputation of, the Company or any
affiliate in any community in which the Company or any affiliate is engaged in
business; (ii) directly or indirectly take any action inconsistent with the
Waiver and Release; or (iii) commit damage to the property of the Company or any
affiliate or otherwise engage in any misconduct which is injurious to the
business or reputation of the Company or any affiliate; provided, however, that
Consultant will not be in breach of the covenant contained in (ii) above solely
by reason of his testimony which is compelled by process of law. Consultant
further agrees that he will not make any public or private oral or written
statement to any person, or take any action or position inconsistent with, the
agreed statement of facts set forth on Exhibit A. As used in Sections 5 and 6 of
this Agreement, the term "affiliate" means the Company; Le Groupe Videotron Ltee
("Videotron"); any direct or indirect subsidiary of the Company; any direct or
indirect subsidiary of Videotron; any other entity in which the Company,
Videotron or any of their direct or indirect subsidiaries owns more than 50% of
the outstanding equity interests; any officer, director or employee of the
Company or of any of the foregoing entities; and any former officer, director or
employee of the Company or of any of the foregoing entities.
7. Indemnification: The Company agrees to indemnify and defend Consultant
to the extent permitted under Delaware law against all losses and expenses
(including reasonable attorneys' fees and expenses) in connection with any claim
arising out of or otherwise related to Consultant's services as a member of the
Board of Directors or for actions taken in good faith as a consultant pursuant
to this Agreement; provided, however, that such indemnification shall not extend
to any claims by or that may relate to Vanguard Communications, L.P. or any of
its affiliates or Consultant's passive investment position as a limited partner
of Vanguard Communications, L.P. or any of its affiliates.
8. Effect of Prior Agreements: This Agreement contains the entire
understanding between the parties hereto relating to the subject matter hereof
and supersedes any other prior agreement between the Company and Consultant.
9. General Provisions:
A. Nonassignabilitv. Neither this Agreement nor any right or interest
hereunder shall be subject, in any manner, to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, whether voluntary or
involuntary, by operation of law or otherwise, any attempt at such shall be
void; and further provided, that any such benefit shall not in any way be
subject to the debts, contract, liabilities, engagements or torts of Consultant,
nor shall it be subject to attachment or legal process for or against
Consultant.
B. Submission to Arbitration. Subject to the right of the Company to seek
injunctive relief under the provisions of Paragraph 5D above, any controversy or
claim arising out of or relating to this contract or its alleged breach shall be
settled by binding arbitration in Dallas, Texas before three arbitrators in
accordance with the Commercial Arbitration Rules of the American
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Arbitration Association ("AAA"), and any judgment on the award rendered by the
arbitrators may be entered by any court having jurisdiction thereof. The
arbitrators shall be selected by mutual agreement of the parties, if possible;
provided, however, that persons eligible to be selected as arbitrators shall be
limited to attorneys-at-law who (a) are on the AAA's Large, Complex Case Panel
or a Center for Public Resources ("CPR") Panel of Distinguished Neutrals, or who
have professional credentials similar to the attorneys listed on such AAA and
CPR Panels, and (b) who practiced law for at least 15 years as an attorney in
Texas specializing in either general commercial litigation or general corporate
and commercial matters. If the parties fail to reach agreement upon appointment
of an arbitrator within thirty days following receipt by one party of the other
party's notice of desire to arbitrate, the arbitrator shall be selected from a
panel or panels of persons submitted by the AAA who qualify as described above.
The selection process shall be that which is set forth in the AAA Commercial
Arbitration Rules then prevailing, except that, if the parties fail to select an
arbitrator from one or more panels, AAA shall not have the power to make an
appointment but shall continue to submit additional panels until an arbitrator
has been selected.
In any such arbitration proceeding, the arbitrators shall not have the
power or authority to award punitive damages to any party. Judgment upon the
award rendered may be entered in any court having jurisdiction. Each of
Consultant and the Company shall, subject to the award of the arbitrators, pay
an equal share of the arbitrators' fees. The arbitrators shall have the power to
award recovery of all costs and fees (including attorneys' fees, administrative
fees, arbitrators' fees, and court costs) to the prevailing party.
C. Taxes. Consultant acknowledges that he has sought the advice of his own
tax advisor regarding the tax treatment of income under this Agreement. The
Company shall withhold from the amounts payable to Consultant under Paragraphs 3
and 4 of this Agreement all federal, state and local taxes that shall be
required pursuant to any law or governmental regulation or ruling.
D. Source of Payments. All payments provided in this Agreement shall be
paid in cash from the general funds of the Company, and no special or separate
funds shall be established and no other segregation of assets shall be made to
assure payments. Consultant shall have no right, title, or interest whatever in
or to any investments which the Company may make to aid the Company in meeting
its obligations hereunder. Nothing contained in this Agreement, and no action
taken pursuant to this provision, shall create or be construed to create a trust
of any kind, or a fiduciary relationship, between the Company and Consultant or
any other person. To the extent that any person acquires a right to receive
payments from the Company hereunder, such right shall be no greater than the
right of an unsecured creditor of the Company.
10. Modification and Waiver:
A. Amendment of Agreement. This Agreement may not be modified or amended
except by an instrument in writing signed by the parties hereto.
B. Waiver. No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be an estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel.
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11. Notices: All notices or communications hereunder shall be in writing,
addressed as follows:
To the Company:
OpTel,Inc.
0000 X. Xxxxxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attn: Chairman of the Board
Copy: General Counsel
To Consultant:
Xxxxx X. Xxxxxx
00000 Xxxxx
Xxxxxx Xxxx, XX 00000
All such notices shall be conclusively deemed to be received and shall be
effective, (i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy
or facsimile transmission, upon confirmation of receipt by the sender of such
transmission or (iii) if sent by registered or certified mail, on the fifth day
after the day on which such notice is mailed.
12. Governing Law: This Agreement has been executed and delivered in the
State of Texas, and its validity, interpretation, performance, and enforcement
shall be governed by the laws of said State.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereunto by its officers thereunto duly authorized,
and Consultant has signed this Agreement, all as of the day first above written.
OpTel, Inc.
By:
-------------------------------
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Xxxxx X. Xxxxxx ("Consultant")
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EXHIBIT A
Xxxxx X. Xxxxxx has elected to resign from the office of Chairman of the
Board of Directors of OpTel, Inc. He has agreed to continue to serve as an
independent consultant to OpTel, Inc.
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Dated: November 12, 1996
Attachment A
WAIVER AND RELEASE
In exchange for the consideration offered under the Separation and
Consulting Agreement between me and OpTel, Inc. (the "Company"), dated September
1, 1996, and the Warrant Agreement attached thereto (collectively known as the
"Agreement"), I hereby waive all of my claims and release the Company, its
affiliates, its subsidiaries and each of their directors and officers, employees
and agents, and employee benefit plans and the fiduciaries and agents of said
plans (collectively referred to as the "Corporate Group") from any and all
claims, demands, actions, liabilities and damages. All payments under the
Agreement are voluntary on the part of the Company and are not required by any
legal obligation of the Company to me other than the Agreement itself. I choose
to accept this offer.
I understand that signing this Waiver and Release is an important legal
act. I acknowledge that the Company has advised me in writing to consult an
attorney before signing this Waiver and Release. I understand that I have until
21 calendar days after the date shown above to consider whether to sign and
return this Waiver and Release to the Company by first-class mail or by hand
delivery in order for it to be effective.
In exchange for the consideration offered to me by the Company pursuant to
the Agreement, which is in addition to any remuneration or benefits to which I
am already entitled, I agree not to xxx or file any charges of discrimination,
or any other action or proceeding with any local, state and/or federal agency or
court regarding or relating in any way to the Company, and I knowingly and
voluntarily waive all claims and release the Corporate Group from any and all
claims, demands, actions, liabilities, and damages, whether known or unknown,
arising out of or relating in any way to the Company, except with respect to
rights under the Agreement and such rights or claims as may arise after the date
this Waiver and Release is executed. This Waiver and Release includes, but is
not limited to, claims and causes of action under: Title VII of the Civil Rights
Act of 1964, as amended; the Age Discrimination in Employment Act of 1967, as
amended; the Civil Rights Act of 1866, as amended; the Civil Rights Act of 1991;
the Americans with Disabilities Act of 1990; the Older Workers Benefit
Protection Act of 1990; the Employee Retirement Income Security Act of 1974, as
amended; the Family and Medical Leave Act of 1993; the Texas Commission on Human
Rights Act; the Texas Labor Code; and/or contract, tort, defamation, slander,
wrongful termination or other claims or any other state or federal statutory or
common law.
Should any of the provisions set forth in this Waiver and Release be
determined to be invalid by a court, agency or other tribunal of competent
jurisdiction, it is agreed that such determination shall not affect the
enforceability of other provisions of this Waiver and Release.
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I acknowledge that this Waiver and Release and the Agreement set forth the
entire understanding and agreement between me and the Company or any other
member of the Corporate Group concerning the subject matter of this Waiver and
Release and supersede any prior or contemporaneous oral and/or written
agreements or representations, if any, between me and the Company or any other
member of the Corporate Group.
I understand that for a period of 7 calendar days following my signing this
Waiver and Release (the "Waiver Revocation Period"), I may revoke my acceptance
of the offer by delivering a written statement to the Company by hand or by
registered mail, addressed to the address for OpTel, Inc. specified in the
Agreement, in which case the Waiver and Release will not become effective. In
the event I revoke my acceptance of this offer, the Company shall have no
obligation to provide me the consideration offered under the Agreement. I
understand that failure to revoke my acceptance of the offer within the Waiver
Revocation Period will result in this Waiver and Release being permanent and
irrevocable.
I acknowledge that I have read this Waiver and Release, have had an
opportunity to ask questions and have it explained to me and that I understand
that this Waiver and Release will have the effect of knowingly and voluntarily
waiving any action I might pursue, including breach of contract, personal
injury, retaliation, discrimination on the basis of race, age, sex, national
origin, or disability and any other claims arising prior to the date of this
Waiver and Release.
By execution of this document, I do not waive or release or otherwise
relinquish any legal rights I may have which are attributable to or arise out of
acts, omissions or events of the Company or any other member of the Corporate
Group which occur after the date of execution of this Waiver and Release.
I acknowledge that this Waiver and Release waives any rights I may have as
a shareholder or a derivative shareholder of the Company with respect to any
events which may have occurred up to and including the date of execution hereof,
excluding any rights I may have solely by virtue of my investment interests in
Vanguard Communications, L.P.
AGREED TO AND ACCEPTED this
_______ day ____________, of 1996.
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Xxxxx X. Xxxxxx
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