EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into by and between
CABLETEL MANAGEMENT, INC., a Colorado corporation with principal offices located
at 0000 X. Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 (the "Company"), and
XXXXX X. XXXXX, a resident of the State of Colorado ("Employee").
A. The Company is a wholly owned subsidiary of CableTel Europe LLC
("CTE"), for which the Company provides management and consulting personnel. CTE
and its affiliates CableTel (Holland) Holding B.V. and D2PC Communications
S.A.R.L., collectively, are referred to herein as "CableTel."
B. The Company wishes to employ Employee and Employee wishes to be
employed by the Company in key management positions with the Company and
CableTel.
C. The Company and Employee, respectively, desire to enter into an
Employment Agreement under the terms and conditions contained herein.
AGREEMENT
In consideration of the rights and obligations created hereunder, the
parties agree as follows:
1. EMPLOYMENT. This Agreement is made between the Company, as employer,
and the Employee and replaces and voids any and all prior employment agreements
made between the Company and Employee. This Agreement shall commence as of the
Effective Date (as set forth in Section 16) for an indefinite period subject to
termination as specified in Section 5.
2. TITLE AND DUTIES. Employee shall be employed by the Company and shall
serve as Chairman and Chief Executive Officer of the Company and of CTE.
Employee shall perform, on a fulltime basis, such duties and bear such
responsibilities, as may be determined from time to time by the Board of
Managers of CTE (the "Board"), commensurate with his position and shall serve
the Company and CTE faithfully and to the best of his ability under the
direction of the Board; provided, that Employee shall be entitled to continue
his involvement in personal business and in the business and operations of
NewTel Holdings, Ltd., Jersey Cable, Ltd. and NewTel, Ltd., each a Channel
Islands company (collectively, the "NewTel Business"), it being understood such
involvement may from time to time require services on his part, but will not in
any event materially interfere with the performance of Employee's duties
hereunder.
3. COMPENSATION.
(a) SALARY. For all services rendered by Employee hereunder, Employee
shall receive a base salary, payable semimonthly in arrears, at the annual rate
of $175,000. The Board shall review Employee's salary annually at the end of
each calendar year and shall provide for such increases to Employee's base
salary as the Board may determine to be appropriate taking into account both
CableTel's and Employee's performance
(b) BENEFITS. In addition to salary payments as provided in
Section 3(a), the Company shall provide Employee with the benefits of such
insurance plans, hospitalization plans, 401(k) and supplemental retirement plans
and other employee fringe benefit plans as are approved by the Board, it being
understood that such benefits shall be comparable to those customarily provided
to executive management personnel of companies in the telecommunications
industry of comparable size and value as
CableTel. In addition, Employee shall be reimbursed for the reasonable costs of
his advisors with respect to the negotiation of this Agreement. Employee shall
be entitled to sick leave and vacation in accordance with the Company's
established policies applicable to its employees generally, provided that
Employee shall be entitled to a minimum of four weeks vacation each year.
Benefits to be provided by the Company under Sections 5(d), (e) and (f) after
termination of this Agreement for the periods specified therein shall include
health insurance and long term disability insurance providing substantially the
same health insurance and long term disability insurance as was provided to
Employee at the time of the termination of this Agreement.
(c) BONUSES. At the end of each calendar year, Employee shall be
eligible to receive an incentive bonus as authorized by the Board pursuant to
objectives set by the Board, in an amount up to 55% of Employee's base salary
for such year, which amount on the first anniversary of the Effective Date shall
be $95,000, subject to Employee's having met the performance targets established
by the Board.
4. OFFICE SPACE AND EXPENSES; PERSONAL RESIDENCE. The Company shall
provide Employee with appropriate office facilities in the greater Denver,
Colorado metropolitan area, executive secretarial support and other staff
personnel as may reasonably be required, in the reasonable discretion of
Employee, to accomplish the Company's business plan. The Company agrees that
Employee may continue to maintain his principal residence in the greater Denver,
Colorado metropolitan area. If Employee and the Board determine it to be
necessary in order to properly fulfill his responsibilities under this Agreement
to maintain another office in any location in which the Company is then doing
business ("Location"), the Company shall provide adequate housing for Employee
in the form of an apartment or other rental unit in the Location. The Company
shall reimburse Employee for the reasonable amount of hotel, travel,
entertainment and other expenses reasonably incurred by Employee in the
discharge of his duties hereunder, including but not limited to costs incurred
by Employee for living expenses while in, and travel to and from, any Location
on Company business; it being agreed that all international travel shall and all
hotel accommodations and other expenses shall be at levels customary for a chief
executive of a company in the telecommunications industry of comparable size and
value as CableTel.
5. TERMINATION. Employee's employment hereunder shall terminate on the
following terms and conditions:
(a) DEATH. If Employee dies during the term of this Agreement, this
Agreement shall terminate as of the date of Employee's death. The Company shall,
within 180 days after the date of Employee's death, make a cash lump sum payment
(less applicable withholding taxes) to his estate in an amount equal to the
salary (at the level payable in the year of Employee's death) that would have
been payable either for the period of time extending from the date of death to
the date 18 months after the Initial Closing Date (as defined in Section 17), or
for the six months next following the date of death, whichever period of time is
longer.
(b) DISABILITY. If during the term of this Agreement Employee becomes
disabled, the Company may terminate this agreement 30 days after receipt by
Employee or his duly appointed legal representative of Notice of Termination (as
defined below). For purposes of this Section 5(b), Employee shall be "disabled"
if he is unable effectively to perform his duties hereunder by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months. If this Agreement is terminated under this
Section 5(b), Employee shall continue to receive his base salary (at the level
payable in the year of termination) either for the period of time extending from
the date of termination of employment to the date 18 months after the Initial
Closing Date, or for the six months next following the date of termination,
whichever period of time is longer.
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For purposes of this Agreement, a "Notice of Termination" means a written
notice from the Company which (a) indicates the specific termination provision
in this Agreement relied upon, (b) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee's employment under the provision so indicated and (c) to
the extent applicable, sets forth the date of termination.
(c) CAUSE. The Company may terminate this Agreement for "cause" upon
receipt by Employee, or on such later date as shall be specified, of Notice of
Termination stating that termination is pursuant to this Section 5(c). For
purposes of this agreement, "cause" shall be defined as any of the following:
(i) any act by Employee, where in respect of such act Employee is ultimately
convicted or enters a plea of guilty or NOLO CONTENDERE to a felony; (ii)
Employee's willful misconduct, gross negligence, perpetration of or
participation in a fraud, in each case where such acts are materially injurious
to the Company or any of its subsidiaries or any affiliate thereof, or (iii)
Employee's material breach of Sections 5 (Confidentiality) or Section 6
(Noncompetition and Nonsolicitation) of the Executive Securities Agreement dated
as of May 18, 1998 by and between CTE and Employee, in each case where
Employee's acts are materially and demonstrably injurious to the Company or an
Affiliate (as defined below). If this Agreement is terminated for cause,
Employee's rights hereunder shall cease immediately on the date of such
termination.
For purposes of this Agreement, the term "Affiliate" means a
person, firm or corporation that directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with, the
Company.
(d) NONPERFORMANCE. The Company may terminate Employee's employment
in the event of Nonperformance. The term "NONPERFORMANCE" shall mean the
occurrence of any of the following:
(i) the repeated failure or refusal in any material respect of
Employee to perform his duties hereunder or to follow, in a manner
reasonably acceptable to the Board, policies or directives established by
the Board;
(ii) the failure of the Company and its subsidiaries to achieve
financial, operating or other performance objectives formally established
by the Board in an approved business plan or operating budget (which may be
embodied in any board resolution or in any document approved by the Board
such as a business plan or budget) together with a determination by the
Board that Employee's performance or failure to perform has been a material
factor in the failure of the Company and its subsidiaries to achieve such
performance objectives; or
(iii) the failure of Employee to achieve specific, formally
adopted performance objectives established by the Board after consultation
with employee and good faith consideration by the Board of Employee's
expressed view of the objectives.
Prior to any termination of Employee's employment for Nonperformance,
the Board shall meet in formal session (but without the attendance of Employee)
upon proper notice to consider the matter of Employee's performance after which
the Board may deliver to Employee written notice (a "NONPERFORMANCE NOTICE")
stating that the Board believes Nonperformance has occurred. Employee shall have
at least 15 calendar days to prepare for a meeting with the Board, at which time
Employee may present any information on market and competitive conditions and
any other factors bearing upon his performance. In assessing Employee's
performance, the Board shall give due consideration to such conditions and such
other factors and shall work with Employee in good faith to establish criteria
which, if satisfied by Employee within 35 days or such longer time as may
reasonably be necessary in view of the criteria (the "CURE PERIOD") after such
meeting, will prevent the Company from terminating Employee for
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Nonperformance (until such time as another Nonperformance Notice shall be given
and the procedures set forth in this Section 6(d) shall be followed). It is
understood, however, that if Employee and the Board fail to agree on such
criteria, such criteria, and the length of the Cure Period if longer than 35
days, shall be those established in good faith by the Board.
If Employee has failed to resolve the Nonperformance to the
satisfaction of the Board by the end of the Cure Period, Employee's employment
will be subject to termination at anytime thereafter immediately upon adoption
of a resolution to that effect by a majority of the entire Board and upon
delivery by the Company or the Board to Employee of written Notice of
Termination stating that termination is pursuant to this Section 5(d), which
notice shall set forth the date of termination and specifically identify the
basis for the Board's belief that Nonperformance has occurred and not been
cured.
If Employee is discharged pursuant to this Section 5(d), this
Agreement shall immediately terminate at the date set forth in the Notice of
Termination and Employee shall be entitled to receive (i) within thirty days
after the date of termination, a cash lump sum severance payment equal to the
amount of his base salary (at the level payable in the year of termination) that
would have been payable either for the period of time extending from the date of
termination of employment to the date 18 months after the Initial Closing Date,
or for the six months next following the date of termination of employment,
whichever period of time is longer, and (ii) a continuation of his benefits as
specified in Section 3(b) for such period.
(e) WITHOUT CAUSE. The Company may terminate Employee's employment
without cause by delivering to Employee a Notice of Termination stating that
termination is pursuant to this Section 5(e). If Employee is discharged without
cause, this Agreement shall immediately terminate at the date set forth in the
Notice of Termination and Employee shall be entitled to received (i) within
thirty days after the date of termination, a cash lump sum severance payment
equal to the amount of his base salary and bonus (at the level payable in the
year of termination) that would have been payable for the 24 months next
following the date of termination of employment and (ii) a continuation of his
benefits as specified in Section 3(b) for such period.
(f) CHANGE OF CONTROL. If Employee's employment is terminated by the
Company or if Employee resigns after his salary, benefits or any other required
payments (including without limitation any payments pursuant to this Section 5)
are reduced below the minimum levels required by this Agreement or after being
assigned to a position of lesser title, authority or responsibility, or if
Employee is required to move his principal residence from the greater Denver,
Colorado metropolitan area, in any such case within a six-month period after the
occurrence of a Change of Control, this Agreement shall immediately terminate as
of the later of (i) the date next following the date the Change of Control was
effective or (ii) the date Employee resigned or his employment is terminated.
Any such termination shall be treated in the same manner as a termination
without cause pursuant to Section 5(e). Employee agrees that payment of the
amounts due in that event shall constitute liquidated damages or severance pay
or both.
A "Change in Control" will be deemed to have occurred if a person
(as defined in Section 18-101(12) of the Delaware Limited Liability Company
Act), who does not beneficially own (as defined below) any equity interest in
CTE entitled to vote in the election of Representatives to CTE's Board of
Managers ("Membership Interest") as of the Initial Closing Date, becomes the
beneficial owner of a Membership Interest with 51% of the voting power of all
Membership Interests. A "beneficial owner" is any person who, directly or
indirectly, through any contract, arrangement, understanding, relationship, or
otherwise has or shares (i) the power to vote or direct the voting of such
equity interest or (ii) the power to dispose, or direct the disposition of, such
equity interest.
(g) BY EMPLOYEE. Employee may resign from his employment with the
Company at any time. In such event, this Agreement shall terminate immediately.
Such resignation shall have the same
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effect under this agreement as a termination of this Agreement by the Company
for cause, I.E., Employee's rights hereunder shall cease immediately upon such
termination.
6. FULL SETTLEMENT. In no event shall the Employee be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Employee under any of the provisions of this Agreement, but such
amounts shall be reduced by the amount Employee obtains from other employment.
The Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which Employee may reasonably incur as a result of any
contest by the Company or Employee of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by Employee about the amount of
any payment pursuant to this Agreement), but only if Employee is successful on
the merits of any such contest plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Internal Revenue Code of 1986, as amended (the "Code").
7. LIMITATION ON PAYMENTS. Notwithstanding anything in this Agreement to
the contrary, if the total payments or distributions by the Company to or for
the benefit of Employee would be subject to the excise tax ("Excise Tax")
imposed by Section 4999 of the Code, then the cash amounts payable to Employee
hereunder shall be reduced, in the manner agreed by the Company and the
Executive, to the extent necessary so that the total of all such payments shall
be $1.00 less than the amount that would trigger the imposition of the Excise
Tax.
8. WAIVER OF BREACH. A waiver by either party of a breach of any
provision of this Agreement by the other party shall not be construed as a
waiver of any breach of another provision or subsequent breach of the same
provision.
9. SEVERABILITY. The invalidity or unenforceability in any application of
any provision in this Agreement will not affect the validity or enforceability
of any other provision or of such provision in any other application.
10. NOTICES. All communications, requests, consents and other notices
provided for in this Agreement shall be in writing and shall be deemed given if
and when delivered personally by hand, sent by telecopy at the appropriate
number indicated below with electronic confirmation of receipt, or mailed by
first class mail, postage prepaid, addressed as follows:
(a) If to the Company:
CableTel Management, Inc.
0000 X. Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Facsimile No.: 000-000-0000
Att.: Chairman of the Board
with a copy to:
Madison Dearborn Partners
Three First Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx Xxxxxxxx
and to:
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Xxxxxxxx X. XxXxxxxx
0000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
(b) If to Employee:
Xx. Xxxxx X. Xxxxx
0000 X. Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Facsimile No.: 000-000-0000
or to such other address or telecopy number as either party may designate by
notice pursuant to this Section 10.
11. JURISDICTION; VENUE; LIMITATION. The District Court of the County of
Arapahoe Colorado, United States of America, shall have exclusive jurisdiction,
including personal jurisdiction, and shall be the exclusive venue for any
controversies or claims arising out of Employee's employment by the Company or
out of this Agreement, except as otherwise agreed by the parties. Any action or
proceeding to enforce the provisions of this Agreement, or to recover damages
from the alleged breach of any provisions of this Agreement shall be commenced
within six months of a party's first notice of a breach by the other party.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, without reference to the
principles of conflict of laws.
13. ASSIGNMENT. The Company may, with the written consent of Employee,
assign its rights and delegate its obligations under this Agreement to any
Affiliate or, with the express waiver by Employee of the provisions of Section
6(e) to any acquire of substantially all of the business of the Company whether
through merger, purchase of assets or otherwise. Otherwise, neither party may
assign any rights or delegate any duties under this Agreement. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective legal representatives, heirs, and permitted successors and assigns.
14. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding of the parties and supersedes all prior understandings, agreements
or representations by the parties, written or oral, that relate to the subject
matter of this Agreement.
15. AMENDMENTS. No provision of this Agreement may be amended or waived
except by an instrument in writing signed by the Employee and the Company (after
obtaining Board approval).
16. EFFECTIVE DATE. This Agreement shall be effective as of January 1,
1998.
17. INITIAL CLOSING DATE. As used herein, "Initial Closing Date" shall
have the meaning set forth in Section 1C of that certain Equity Purchase
Agreement by and among CTE, Employee and the other Purchasers named therein.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement the 18th day of May, 1998.
COMPANY:
CABLETEL MANAGEMENT, INC.,
a Colorado corporation
By: /s/ Xxxxx X. Xxxxx
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Title: CEO
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EMPLOYEE:
/s/ XXXXX X. XXXXX
-----------------------------------------
Xxxxx X. Xxxxx
(Signature page for Xxxxx X. Xxxxx Employment Agreement)
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