ADELPHIA COMMUNICATIONS CORPORATION
SALE BONUS PROGRAM
Communications Corporation Sale Bonus Program (the Program) applies to those
eligible employees of Adelphia Communications Corporation (the Company) and
those of its affiliates that are debtors and debtors in possession under
chapter 11 of title 11 of the United States Code whose cases (collectively, the
Chapter 11 Case) are jointly administered under case number 02-41729 (REG)
(each, a Debtor, and collectively, the Debtors or Adelphia), and who are
selected to participate in accordance with Section 3 of this Program.
AND EFFECTIVE DATE
purpose of this Program is to encourage Participants (as defined in
Section 3) to continue their employment with the Debtors (or a successor)
during the period of and following the Chapter 11 Case by establishing a
program governing the circumstances under which a Participant will be eligible
to receive a bonus (a Sale Bonus) payable in connection with a Change in
Control (as defined below).
Program is adopted and effective as of September 21, 2004 (the Effective
Date), in accordance with an order issued by the United States Bankruptcy
Court for the Southern District of New York (the Bankruptcy Court), such
court having jurisdiction over the Chapter 11 Case.
AND AMOUNT OF BONUS
Those employees of the Debtors who have received written notice from
the Program Administrator (as defined below) that they have been selected for
coverage under the Program shall be eligible to participate in the Program
(each a Participant). Such notice
shall set forth the amount of each Participants Sale Bonus and shall be
distributed as soon as practicable following the Effective Date. The date of such notice shall be referred to
as the Participation Date.
Subject to Section 5 below, unless otherwise agreed between the
Company and a Participant, if a Participant is eligible to receive a Sale
Bonus, such amount shall be payable as follows:
respect to fifty percent (50%) of the Sale Bonus, in one lump sum payment,
within ten (10) business days following the effective date of a Change in
Control (the First Sale Bonus Payment Date); provided, the Participant
is employed by a Debtor (or such Debtors successor) on the First Sale Bonus
Payment Date; and,
respect to fifty percent (50%) of the Sale Bonus, in one lump sum payment,
within ten (10) business days following the six month anniversary of the
effective date of the Change in Control (the Second Sale Bonus Payment Date);
provided, the Participant is employed by a Debtor (or such Debtors
successor) on the Second Sale Bonus Payment Date.
anything contained herein to the contrary, in the event a Participants
employment is terminated (i) as a result of death or disability (as defined in
the Companys long-term disability plan), (ii) by a Debtor (or such Debtors
successor) without Cause, or (iii) following a Change in Control, by the
Participant for Good Reason, in each case, prior to payment of the Sale Bonus,
the following provisions shall apply:
such termination occurs prior to the First Sale Bonus Payment Date, such
Participant shall be entitled to receive the unpaid portion of his/her entire
Sale Bonus amount, if and to the extent that the Chief Executive Officer of the
Company (the CEO), in his sole discretion, determines such Participant shall
receive such amounts.
such termination occurs on, or following, the First Sale Bonus Payment Date,
but prior to the Second Sale Bonus Payment Date, such Participant shall be
entitled to receive any unpaid amounts of his/her entire Sale Bonus.
the event a Participant voluntarily terminates employment with a Debtor, or
his/her employment is terminated for any reason other than the reasons set
forth in Section 5(a) above, prior to any payment date, such Participant
shall be ineligible to receive the then unpaid portion of his/her Sale Bonus or
any other benefit under this Program.
anything contained herein to the contrary, a Participant may be required to
execute an agreement releasing any and all claims the Participant may have
against, among others, the Debtors or their current or former shareholders,
officers, employees or directors, each of the foregoing in their capacity as
such, (the Release) and any applicable revocation period set forth in the
Release must have expired, before he/she will receive payment of his/her Sale
anything contained herein to the contrary, the obligation of the Debtors to a
Participant to make any payments under this Program shall cease and the
Participant agrees to pay to the Debtors, upon written demand of the Company,
in a single cash, lump sum, the net after-tax amounts received under this
Program, if either of the following occur: (i) the Participant breaches any
restrictive covenant that he/she is bound to pursuant to any agreement with one
or more of the Debtors, or an employee benefit plan of one or more of the
Debtors, or (ii) the Participant discloses his/her status as a Participant in,
or right to receive a benefit under, this Program, or any of the terms and
conditions of the Program, unless legally required to disclose such
information, to any person other than his/her spouse and/or attorney, provided
such spouse and attorney shall also be bound by this confidentiality
6. DEFINITIONS. For purposes of this Program, the
following definitions shall apply:
Plan shall mean the plan or plans of reorganization involving the Debtors in
connection with the Chapter 11 Case.
shall mean the board of directors of the Company.
shall have the meaning set forth in any employment agreement a Participant has
entered into with a Debtor; provided, however, that if a
Participant is not party to such an employment agreement, Cause shall mean:
(i) a Participants refusal or repeated failure to perform the duties assigned
to him or her; (ii) any act by the Participant that has the effect of injuring
the reputation or business of the Debtor for which the Participant is employed;
(iii) the conviction by the Participant of a felony; (iv) any violation by the
Participant of the rules, regulations or policies of the Debtor for which the
Participant is employed; (v) theft by the Participant; or (vi) commission by
the Participant of an act of gross misconduct, fraud or embezzlement.
in Control shall mean the occurrence of any of the following events, whether
on, before or following the Emergence Date, in each case pursuant to the terms
of a definitive written agreement with one or more of the Debtors entered into
on or prior to the Emergence Date:
of an acquisition on or after the Emergence Date by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the Exchange Act) (a Person))
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of either (A) the then-outstanding shares of
common stock of the Company issued pursuant to the Bankruptcy Plan (the
Outstanding Company Common Stock) or (B) the combined voting power of the
then-outstanding voting securities of the Company issued pursuant to the
Bankruptcy Plan entitled to vote generally in the election of directors (the
Outstanding Company Voting Securities); or
of a merger, consolidation or similar corporate transaction involving the
Company or all or substantially all of its subsidiaries or a sale or other
disposition of all or substantially all of the consolidated assets of the
Company or all or substantially all of its
subsidiaries in one or more transactions (each, a Business Combination);
provided, however, a Business Combination shall not constitute a Change in
Control if all of the following conditions are met: (A) the beneficial owners of the Outstanding
Company Stock and the Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more
than 50% of the then-outstanding shares of common stock and the combined voting
power of the then-outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting
from such Business Combination (including, without limitation, a corporation
that, as a result of such transaction, owns the Company or all or substantially
all of the Companys assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination, (B) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more of
the then-outstanding shares of common
stock of the corporation resulting from such Business
Combination or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such ownership
existed prior to the Business Combination, and (C) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Board at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
of a sale or other disposition to a Person that is not an affiliate of the
Company of a strategic cluster, a specific division or business unit of the
Company or other Debtor for which a Participant primarily performs his/her
services that is not described in clause (ii) of this Section 6(d);
provided, that strategic cluster
shall mean the cable systems operated by the Company or other Debtors in the
following geographic locations: (I) Northern New England/Eastern New
York, (II) Cleveland/Greater Ohio Valley, (III) Florida/Southeast, (IV)
California/Western, (V) Virginia/Maryland/Colorado Springs/Kentucky, (VI) Pennsylvania,
and (VII) Western New York/Connecticut; provided, further, that no Change in
Control shall be deemed to have occurred for purposes of this Program unless
the Participant eligible to receive a Sale Bonus has primarily performed
his/her services for the strategic cluster, specific division or business unit
that was involved in such sale or other disposition, as determined by the
Date shall mean the date on which the Bankruptcy Plan becomes effective in accordance
with its terms.
Reason shall have the meaning set forth in any employment agreement a
Participant has entered into with a Debtor; provided, however,
that if a Participant is not party to such an employment agreement, Good
Reason shall mean the occurrence of any of the following events, without the
Participants express written consent:
is a material reduction in Participants base salary or target incentive bonus;
is a diminution of the Participants duties;
Participant is demoted or removed from the position held at the time such grant
was made; or,
Participant is relocated to a principal place of employment that is further
from his/her principal place of residence than the greater of (A) 50 miles or
(B) the distance between his/her principal place of residence and his/her
principal place of employment as of the Participation Date.
under this Program shall not constitute wages and shall be paid by one or more
of the Debtors from the general assets of the Debtors; provided that no
director, officer, agent or employee of the Debtors shall be personally liable
in the event the Debtors are unable to make any payments under this Program due
to a lack of, or inability to access, funding or financing, legal prohibition
(including statutory or judicial limitations) or failure to obtain any required
consent. Notwithstanding anything in
this Program to the contrary, any payments to be made hereunder shall only be
made as and to the extent the Debtors have adequate funding therefor.
under this Program are subject to Federal, state and local income tax
withholding and all other applicable Federal, state and local taxes. The Debtors shall withhold, or cause to be
withheld, from any payments made hereunder all applicable Federal, state and
local withholding taxes and may require the employee to file any certificate or
other form in connection therewith.
contained herein shall give any Participant the right to be retained in the
employment of any Debtor, or any successor, or affect the right of the Debtors
to dismiss any Participant at will.
Program is not a term or condition of any individuals employment and no
Participant shall have any legal right to payments hereunder except to the
extent all conditions relating to the receipt of such payments have been
satisfied in accordance with the terms of this Program as set forth herein.
contained herein shall give a Participant any right to any employee benefit
upon termination of employment with any Debtor, except as specifically provided
herein, required by law or provided by the terms of another employee benefit
plan document relating to the treatment of former employees generally.
person having a benefit under this Program may assign, transfer or in any other
way alienate the benefit, nor shall any benefit under this Program be subject
to garnishment, attachment, execution or levy of any kind.
as determined by the Plan Administrator in its sole discretion and except with
respect to benefits provided under the Adelphia Communications Corporation Key
Employee Continuity Program, effective September 21, 2004, receipt of all
benefits under this Program by any Participant shall be (i) in lieu of all
other change in control payments of any kind whatsoever due to such Participant
under any other plan or agreement of one or more of the Debtors, including,
without limitation, any benefits payable under any employment agreement between
one or more of the Debtors and the Participant that are specifically identified
as a change in control or sale bonus, and (ii) deemed a waiver of a
Participants rights with respect to any and all such payments.
Program shall be administered by the CEO.
In the event the CEOs employment with the Company terminates, the
Compensation Committee of the Board shall administer the Program. The term Program Administrator shall refer
to the CEO, except as described in the preceding
sentence, in which case the Program Administrator shall refer to the
Compensation Committee of the Board or its designee (the Compensation
Committee). For purposes hereof, the
CEO, subject to review and approval by the Compensation Committee, is
authorized to establish the Sale Bonus amounts each Participant will have the
opportunity to earn hereunder, subject to any aggregate amounts available under
the Program. The CEO may designate the
employees to be covered under the Program upon, and following, the Effective
Date. In the event a Participants
employment has terminated, the CEO may add or substitute Participants to the
Program or reallocate the amount of the Sale Bonus forfeited by a Participant
whose employment has terminated.
is no requirement that the amount of any award for any eligible employee be
uniform as to particular individuals or as to one or more classes of eligible
employees or Participants.
to the express provisions of this Program, the Program Administrator shall have
sole authority to interpret the Program (including any vague or ambiguous
provisions) and to make all other determinations deemed necessary or advisable
for the administration of the Program.
In addition, the determination of whether any conduct, action or failure
to act on the part of any Participant constitutes Cause, shall be made by the
Program Administrator in its sole discretion.
All determinations and interpretations of the Program Administrator
shall be final, binding and conclusive as to all persons.
the Program Administrator nor any employee, officer, agent, or director of any
of the Debtors shall be personally liable by reason of any action taken with
respect to the Program for any mistake of judgment made in good faith, and one
or more of the Debtors shall indemnify and hold harmless each employee, officer
or director of the Debtors, including the Program Administrator, to whom any
duty or power relating to the administration or interpretation of the Program
may be allocated or delegated, against any reasonable cost or expense
(including counsel fees) or liability (including any sum paid in settlement of
a claim with the approval of the Board) arising out of any act or omission to
act in connection with the Program unless arising out of such persons own
fraud, bad faith or gross negligence.
This Program and all action taken under it shall be governed as to
validity, construction, interpretation and administration by the laws of the
State of Colorado and applicable Federal law.
The Board may amend, suspend or terminate the Program or any portion
thereof at any time; provided, however, that unless the written consent of a
Participant is obtained, no such amendment or termination shall materially and
adversely affect the rights of such
Participant. During the pendency
of the Chapter 11 Case, no amendment or modification of the Program that
materially increases the cost of the Program to the Debtors shall be adopted
without formal authorization from the Board and thereafter, the Bankruptcy
Court, upon notice.
IN WITNESS WHEREOF, the Company has caused the Program to be
implemented following Bankruptcy Court approval.
ADELPHIA COMMUNICATIONS CORPORATION
William T. Schleyer
Chairman and CEO
I am pleased
to advise you that the Board of Directors of Adelphia Communications
Corporation and the United States Bankruptcy Court for the Southern District of
New York have approved the implementation of the Adelphia Communications
Corporation Sale Bonus Program (the Program) and that you have been selected
for coverage under this Program. In
accordance with the provisions of the Program, this letter will serve as a
written notice of your selection as a Participant.
The purpose of
the Program is to encourage you to continue your employment with Adelphia (as
defined in the Program) (or a successor) during the period of and following the
Chapter 11 Case (as defined in the Program).
By adoption of this Program, Adelphia wishes to provide you with a bonus
(the Sale Bonus) payable in connection with a Change in Control (as defined
in the Program).
Except in the
case of certain termination events provided in Section 5 of the Program, you
are eligible for a total Sale Bonus under the Program equal to $________, 50%
of which will be paid within 10 business days following the effective date of a
Change in Control, and the remaining 50% of which will be paid within 10
business days following the six month anniversary of such effective date;
provided you are employed by Adelphia (or a successor) on such payment
dates. Please carefully review the
Programs provisions regarding termination of employment as set forth in Section
5(a) of the Program.
under the Program is contingent upon satisfactory performance and you agreeing
to be bound by the terms and conditions of the attached Program document. Please read this document carefully,
including the confidentiality provisions contained in Section 5(d). If you wish to be covered by this Program,
please sign and date this letter and return it to Jerry Rybin at 5619 DTC
Parkway, Greenwood Village, CO 80111, no later than ___________.
this letter, you acknowledge receipt of a copy of the Program and understand
and agree that your employment with Adelphia will continue to be at-will,
that either you or Adelphia may terminate your employment relationship with
Adelphia at any time, and that nothing in the Program is intended to imply or create
any guarantee of employment between you and Adelphia.
Chairman and Chief Executive Officer