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EXHIBIT 10.13
THIS AGREEMENT CONTAINS A PRE-DISPUTE AGREEMENT TO ARBITRATE ANY AND ALL
DISPUTES, AS MORE FULLY DESCRIBED IN SECTION 21 HEREOF.
CLASSIC COMMUNICATIONS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Option
Agreement"), dated as of the [25th day of August, 1999] [December 7, 1999] (the
"Date of Grant"), by and between Classic Communications, Inc., a Delaware
corporation (the "Company"), and [NAME OF EMPLOYEE] (the "Optionee"). Any
capitalized terms used but not defined herein shall have their respective
meanings set forth in Section 22.
WHEREAS, the Company desires to provide the Optionee with an
opportunity to purchase shares of its Class A voting common stock, par value
$.01 per share ("Common Stock"), as hereinafter provided;
NOW THEREFORE, in consideration of the mutual covenants
hereinafter set forth and for other good and valuable consideration, the parties
do hereby agree as follows:
1. Number of Shares. Effective as of the date hereof, the
Company hereby grants to the Optionee the right and option (the "Option") to
purchase, on the terms and conditions hereinafter set forth, [NUMBER OF OPTION
SHARES] shares of the Company's Common Stock (the "Option Shares") at a price of
[twenty dollars ($20.00)] [twenty-five dollars ($25.00)] per share (the "Option
Exercise Price"). The Option is not intended to constitute an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Option Term. The term of the Option and of this Option
Agreement (the "Option Term") shall commence on the Date of Grant and, unless
the Option is previously terminated pursuant to this Option Agreement, shall
terminate upon the expiration of ten (10) years from the Date of Grant. Upon
expiration of the Option Term, all rights of the Optionee hereunder shall
terminate.
3. Conditions of Exercise. (a) Subject to Sections 7 and 8
below, the Option shall vest and become exercisable as to twenty-five percent
(25%) of the Option Shares on each of the first four (4) anniversaries of the
Date of Grant.
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(b) Except as otherwise provided herein, the right of
the Optionee to purchase Option Shares with respect to which this Option has
become exercisable may be exercised in whole or in part at any time or from time
to time prior to expiration of the Option Term; provided, however, that the
Option may not be exercised for a fraction of a share of Common Stock.
4. Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split or similar change
affecting the Common Stock, a substitution or proportionate adjustment shall be
made in the kind, number and Option Exercise Price of the shares of Common Stock
subject to the unexercised portion of the Option, as may be determined by the
Administrator in its sole discretion.
5. Nontransferability of Option. Except under the laws of
descent and distribution or as otherwise provided by the Administrator, the
Option and this Option Agreement shall not be transferable and, during the
lifetime of Optionee, the Option may be exercised only by Optionee; provided,
however, that the Optionee shall be permitted to transfer the Option to a trust
controlled by the Optionee during the Optionee's lifetime for estate planning
purposes. Without limiting the generality of the foregoing, except as otherwise
provided herein, the Option may not be assigned, transferred, pledged or
hypothecated in any way, shall not be assignable by operation of law, and shall
not be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Option shall be null and void and without effect.
6. Method of Exercise of Option. The Option may be exercised
by means of written notice of exercise to the Company specifying the number of
Option Shares to be purchased, accompanied by payment in full of the aggregate
Option Exercise Price and any applicable withholding taxes (i) in cash or by
check, (ii) by means of a cashless exercise procedure either through a broker
or, at the discretion of the Administrator, through withholding of shares of
Common Stock otherwise issuable upon exercise of the Option in an amount
sufficient to pay the aggregate Option Exercise Price and any applicable
withholding taxes, (iii) in the form of unrestricted Common Stock already owned
by the Optionee which, (x) in the case of unrestricted Common Stock acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (y) have an aggregate Fair Market Value on
the date of surrender equal to the aggregate Option Exercise Price of the Common
Stock as to which such Option shall be exercised, or
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(iv) by any other means of exercise authorized from time to time by the Board or
the Administrator.
7. Effect of Termination of Employment. Subject to Section
3(a), upon the termination of Optionee's employment or service with the Company
or any Subsidiary under any circumstances (including without limitation by
reason of the sale of such Subsidiary), the Option shall immediately terminate
as to any Option Shares that have not previously vested as of the date of such
termination (the "Termination Date"). Any portion of the Option that has vested
as of the Termination Date shall be exercisable in whole or in part for a period
of 90 days following the Termination Date; provided, however, that in the event
of termination by reason of death or Disability, such exercise period shall
extend until the date that is six months from the Termination Date; provided,
further, that if (i) the Optionee terminates his or her employment with the
Company or any Subsidiary to join a competitor of the Company or any Subsidiary
or (ii) the Optionee's employment with the Company or any Subsidiary is
terminated for Cause, such exercise period shall be limited to a period of ten
days following the Termination Date. Upon expiration of such 90-day, six-month
or 10-day period, as applicable, any unexercised portion of the Option shall
terminate in full. For purposes of this paragraph 7, "Cause" shall mean (w) the
Optionee's conviction of a criminal offense that could reasonably be expected to
have an adverse effect upon the business or reputation of the Company any
Subsidiary, (x) an action by Optionee involving personal dishonesty, theft or
fraud in connection with Optionee's duties as an officer or employee of the
Company or any Subsidiary, (y) Optionee's repeated failure to abide by or follow
any lawful direction of the Board, Chief Executive Officer or President of the
Company or any Subsidiary or (z) the Optionee's violation of his or her
non-disclosure, non-solicitation or non-competition obligations to the Company
or any Subsidiary. Notwithstanding anything to the contrary, in no event may any
Option be exercised after the expiration of the term of such Option.
8. Effect of Change Of Control. In the Event of a Change of
Control (as defined below), unless otherwise determined by the Administrator or
the Board in writing prior to the occurrence of such Change of Control, the
portion of the Option, if any, not exercisable and vested shall become fully
exercisable and vested. For purposes of this Section 8, a "Change of Control"
shall be deemed to have occurred if:
(a) any "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act, as amended (other than the Company or any
of its Subsidiaries; any trustee or other fiduciary holding securities under an
employee
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benefit plan of the Company or any of its Subsidiaries; any Initial Holder or
Permitted Transferee thereof (as defined in the Company's Amended and Restated
Certificate of Incorporation); or any company owned, directly or indirectly, by
the stockholders of the Company (in substantially the same proportions as their
ownership of Common Stock of the Company) is or becomes after the Date of Grant
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities acquired directly
from the Company or its affiliates) representing 50% or more of the combined
voting power of the Company's then outstanding securities; or
(b) the stockholders of the Company approve a merger
or consolidation of the Company with any other corporation or entity, other than
(i) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least 50% of the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person
(other than existing stockholders) acquires more than 50% of the combined voting
power of the Company's then outstanding securities; or
(c) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
9. Notices. All notices and other communications under this
Agreement shall be in writing and shall be given by facsimile or first class
mail, certified or registered with return receipt requested, and shall be deemed
to have been duly given three days after mailing or 24 hours after transmission
by facsimile to the respective parties named below:
If to Company: Classic Communications, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
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with a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
If to the Optionee: At the address set forth on the signature page
attached hereto.
Either party hereto may change such party's address for notices by notice duly
given pursuant hereto.
10. Securities Laws Requirements. The Option shall not be
exercisable to any extent, and the Company shall not be obligated to transfer
any Option Shares to the Optionee upon exercise of such Option, if such
exercise, in the opinion of counsel for the Company, would violate the
Securities Act of 1933, as amended, the Exchange Act (or any other federal or
state statutes having similar requirements as may be in effect at that time),
the requirements of any stock exchange upon which the Common Stock may then be
listed or the provisions of any other law. Further, the Company may require as a
condition of transfer of any Option Shares pursuant to any exercise of the
Option that the Optionee furnish a written representation that he or she is
purchasing or acquiring the Option Shares for investment and not with a view to
resale or distribution to the public. The certificates for the Option Shares may
include any legend which the Administrator deems appropriate to reflect any
restrictions on transfer. All certificates for Option Shares shall be subject to
such stock-transfer orders and other restrictions as the Administrator may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable federal or state securities law, and the
Administrator may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.
11. Withholding Requirements. The Company's obligations under
this Option Agreement shall be subject to all applicable tax and other
withholding requirements, and the Company shall, to the extent permitted by law,
have the right to deduct any withholding amounts from any payment or transfer of
any kind otherwise due to the Optionee.
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12. Administration. This Option Agreement shall be
administered, in accordance with applicable law, by the Board, or, at the
Board's sole discretion, by the Committee, which shall be appointed by the
Board, and which shall serve at the pleasure of the Board.
13. Fractional Shares. No fractional shares of Common Stock
shall be issued or delivered. The Company shall determine whether cash or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
14. Failure to Enforce Not a Waiver. The failure of the
Company to enforce at any time any provision of this Option Agreement shall in
no way be construed to be a waiver of such provision or of any other provision
hereof.
15. Governing Law. This Option Agreement shall be governed by
and construed according to the laws of the State of Delaware without regard to
its principles of conflict of laws.
16. Amendments. This Option Agreement may be amended or
modified at any time only by an instrument in writing signed by each of the
parties hereto.
17. Rights as a Stockholder. Neither the Optionee nor any of
the Optionee's successors in interest shall have any rights as a stockholder of
the Company with respect to any Option Shares until the date of issuance of a
stock certificate for such Option Shares.
18. Agreement Not a Contract of Employment. Neither the
granting of the Option or this Option Agreement shall constitute or be evidence
of any agreement or understanding, express or implied, that the Optionee has a
right to continue as an officer, director, employee, consultant or advisor of
the Company or any Subsidiary or affiliate of the Company for any period of time
or at any specific rate of compensation.
19. Authority of the Administrator. The Administrator shall
have full authority to interpret and construe this Option Agreement. The
determination of the Administrator as to any such matter of interpretation or
construction shall be final, binding and conclusive.
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20. Indemnification. No member of the Board or the
Administrator, nor any officer or employee of the Company or its Subsidiaries
acting on behalf of the Board or the Administrator, shall be personally liable
for any action, determination, or interpretation taken or made in good faith
with respect to this Option Agreement, and all members of the Board or the
Administrator and each and any officer or employee of the Company or its
Subsidiaries acting on their behalf shall, to the extent permitted by law, be
fully indemnified and protected by the Company or its Subsidiaries in respect of
any such action, determination or interpretation.
21. Dispute Resolution. The parties hereto will use their
reason able best efforts to resolve any dispute hereunder through good faith
negotiations. A party hereto must submit a written notice to any other party to
whom such dispute pertains, and any such dispute that cannot be resolved within
30 calendar days of receipt of such notice (or such other period to which the
parties may agree) will be submitted to an arbitrator selected by mutual
agreement of the parties. In the event that, within 50 days of the written
notice referred to in the preceding sentence, a single arbitrator has not been
selected by mutual agreement of the parties, a panel of arbitrators (with each
party to the dispute being entitled to select one arbitrator and, if necessary
to prevent the possibility of deadlock, one additional arbitrator being selected
by such arbitrators selected by the parties to the dispute) shall be selected by
the parties. Except as otherwise provided herein or as the parties to the
dispute may otherwise agree, such arbitration will be conducted (1) in
accordance with the then existing rules of the Center for Public Resources
("CPR") and (2) at the Company's corporate headquarters in Austin, Texas. The
decision of the arbitrator or arbitrators, or of a majority thereof, as the case
may be, made in writing will be final and binding upon the parties hereto as to
the questions submitted, and the parties will abide by and comply with such
decision. The parties hereto expressly agree and understand that they may not
seek and the arbitrator(s) may not award punitive or exemplary damages and any
award of any such arbitrator(s) shall be limited to compensatory damages. Unless
the decision of the arbitrator(s), as the case may be, provides for a different
allocation of costs and expenses determined by the arbitrators to be equitable
under the circumstances, the prevailing party or parties in any arbitration will
be entitled to recover all reasonable fees (including but not limited to
attorneys' fees) and expenses incurred by it or them in connection with such
arbitration from the nonprevailing party or parties; provided, however, that any
and all costs and expenses of CPR necessary and payable prior to any such
arbitration shall be allocated equally between the parties, subject to any
re-allocation of such costs and expenses by the arbitrator(s). The parties
hereto expressly agree and understand that the dispute resolution procedure
described above shall the sole and exclusive remedy for any and
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all disputes arising under or relating to this Option Agreement or the
administration thereof.
22. Definitions. For purposes of this Option Agreement, the
following terms shall be defined as set forth below:
(a) "Administrator" means the Board or, at the
Board's sole discretion, the Committee.
(b) "Board" means the Board of Directors of the
Company.
(c) "Committee" means the compensation committee of
the Board or any committee the Board may subsequently appoint to administer this
Option Agreement. To the extent necessary and desirable, the Committee shall be
composed entirely of individuals who meet the qualifications referred to in
Section 162(m) of the Code and Rule 16b-3 under the Exchange Act. If at any time
the Board shall not administer this Option Agreement, then the functions of the
Board specified herein shall be administered by the Committee.
(d) "Disability" means the inability of an Optionee
to perform substantially his duties and responsibilities to the Company or any
Parent Corporation or Subsidiary by reason of a physical or mental disability or
infirmity (i) for a continuous period of six months or (ii) at such earlier time
as the Optionee submits medical evidence satisfactory to the Administrator that
the Optionee has a physical or mental disability or infirmity that will likely
prevent the Optionee from returning to the performance of the Optionee's work
duties for six months or longer. The date of such Disability shall be the last
day of such six-month period or the day on which the Optionee submits such
satisfactory medical evidence, as the case may be.
(e) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(f) "Fair Market Value" means, as of any given date,
with respect to any awards granted hereunder, (A) if the Common Stock is
publicly traded, the closing sale price of a share of Common Stock on such date,
(B) the fair market value of a share of Common Stock as determined in accordance
with a method prescribed in the agreement evidencing any award hereunder, or (C)
the fair market value of a share of Common Stock as otherwise determined by the
Administrator in the good faith exercise of its discretion.
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(g) "Parent Corporation" means any corporation (other
than the Company) in an unbroken chain of corporations ending with the Company,
if each of the corporations in the chain (other than the Company) owns stock
possessing 50% or more of the combined voting power of all classes of stock in
one of the other corporations in the chain.
(h) "Subsidiary" means any corporation (other than
the Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations (other than the last corporation) in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Option Agreement on the day and year first above written.
CLASSIC COMMUNICATIONS, INC.
By
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Name
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Title
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The undersigned has had the opportunity to read
the terms and provisions of the foregoing Option
Agreement. The undersigned hereby accepts and
agrees to all the terms and provisions of the
foregoing Option Agreement. THE UNDERSIGNED
UNDERSTANDS THAT THIS OPTION AGREEMENT CONTAINS A
PRE-DISPUTE AGREEMENT TO ARBITRATE ANY AND ALL
DISPUTES, AS MORE FULLY DESCRIBED IN SECTION 21
HEREOF.
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The Optionee
Address:
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