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EXHIBIT 10.11
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 1st
day of September, 1996, by and between ▇▇▇▇ ▇▇▇▇▇▇ ("Frelas"), and World Cable
Communications, Inc., a New York corporation ("WCCI" or the "Company").
WITNESSETH:
WHEREAS, Frelas desires to serve as Chief Financial Officer of the Company,
and the Company desires to employ Frelas as Chief Financial Officer, and Frelas
and the Company desire to embody in this Agreement the terms and conditions
under which Frelas shall be employed;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Frelas and the Company, intending
to be legally bound hereby, AGREE AS FOLLOWS:
1. DEFINITIONS
For the purposes of this agreement, the following definitions shall apply:
a. "Affiliate" of the Company shall mean any other Person controlling,
controlled by, or under common control with the Company.
b. "Associated Company" of the Company shall mean any Affiliate of the
Company or any Subsidiary.
c. "Bank Financing" shall mean the closing of a financing arrangement under
which WCCI borrows or obtains the ability to borrow at least $75 million in
principal amount from a single financial institution or a syndicate of financial
institutions.
d. The "Company" shall mean World Cable Communications, Inc., a New York
corporation.
e. "Debt Offering" shall mean the closing of an underwritten offering of
debt securities of WCCI pursuant to Rule 144A under the Securities Act of 1933,
as amended, covering the offer and sale of at least $100 million in principal
amount of such securities.
f. "Dollars" and "$" each mean the lawful currency of the United States of
America.
g. "Effective Date" shall mean the date first above written.
h. "Frelas" shall mean ▇▇▇▇ ▇▇▇▇▇▇.
i. "Initial Public Offering" means the closing of an underwritten public
offering of shares of common stock of WCCI to be listed on the New York Stock
Exchange or the American Stock Exchange, or to be quoted on the National
Association of Securities Dealers Automated Quotation System or the National
Market System of the National Association of Securities Dealers pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of at least twenty percent (20%) of the common stock
of WCCI outstanding immediately after such closing.
j. "Person" shall mean a natural person, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or other entity, or a governmental entity or any department, agency
or political subdivision thereof.
k. "Subsidiary" shall mean each corporation, partnership, joint venture or
other entity in which WCCI, at the time as of which such determination is being
made, owns, directly or indirectly, any of the outstanding voting securities or
equity interests.
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2. EMPLOYMENT, DUTIES AND RESPONSIBILITIES
a. Performance of Job Duties. Frelas shall serve as the Chief Financial
Officer of the Company and shall perform such services and duties with respect
to the Company and Associated Companies as may be assigned to him, in such
locations as the Company may direct, subject to the general supervision of the
Chief Executive Officer and the Board of Directors of the Company. Frelas shall
devote all of his skill, time, attention, and best efforts to furthering the
Company's businesses, affairs, interests and welfare.
b. Appointment to Management Board or Supervisory Board. The parties
contemplate that Frelas will be appointed to the Management Board or Supervisory
Board of one or more Associated Companies with respect to certain duties and
responsibilities to be carried out in Poland. The compensation arrangements in
connection with such appointment(s) shall be the subject of a separate agreement
between Frelas and each such Associated Company.
c. Compliance with Laws. Frelas agrees to comply with all federal, state,
local, and foreign laws, and to comply with all of the Company's rules,
regulations, and policies in force during his employment, as well as with all
the rules, regulations and policies prescribed for all Associated Companies for
whom or with respect to the business of which he performs services during the
term of this Agreement.
3. TERM OF AGREEMENT
This Agreement shall go into effect as of the Effective Date and shall
terminate on the fifth anniversary of the Effective Date, unless terminated
earlier as provided in Section 8.
4. COMPENSATION
As compensation and consideration for the performance by Frelas of his
obligations under this Agreement, Frelas shall be entitled to the following:
a. Base Salary. During the term of this Agreement, the Company shall pay
to Frelas a base annual salary (the "Base Salary") totaling One Hundred and
Fifty Thousand Dollars (U.S. $150,000) less any compensation paid to Frelas
pursuant to any separate agreement entered into as contemplated by Section 2(b)
above. This Base Salary may be increased by the Company in its sole discretion.
The Base Salary shall be paid in installments payable every second week.
b. Eligibility for Annual Bonus. Frelas shall be eligible for an annual
bonus of up to Fifty Thousand Dollars ($50,000). The performance criteria for
such annual bonus shall be determined on a yearly basis by agreement between
Frelas and the Company.
c. Eligibility for Initial Bonus. WCCI shall pay Frelas a bonus of Fifty
Thousand Dollars ($50,000) if a Debt Offering and a Bank Financing are both
successfully concluded on or before the earlier of (i) March 31, 1997, and (ii)
the date this Agreement is terminated.
d. Eligibility for Bonus upon Initial Public Offering. WCCI shall pay
Frelas a bonus of Three Hundred Fifty Thousand Dollars ($350,000) if an Initial
Public Offering is successfully concluded before this Agreement is terminated.
e. Stock Options and Repurchase.
(1) Frelas shall be granted a non-transferable option to purchase 241
shares of WCCI common stock, $0.01 par value per share, upon the terms and
conditions of a stock option agreement substantially in the form of Exhibit
A, at a price of $1,991.70 per share. The option to purchase forty-eight
(48) of these shares will vest each year on the anniversary date of the
Effective Date beginning with the first anniversary of the Effective Date,
provided, however, that the option to purchase forty-nine (49) of these
shares will vest on the fifth anniversary of the Effective Date), and
provided further that no portion of such option shall vest after the date
(the "Cut-Off Date") that is the earlier of (i) the date that this
Agreement is terminated and (ii) the date on which the Company sends Frelas
a notice referred to in Section 8(b).
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(2) No option granted to Frelas pursuant to this Section 4(e) may be
exercised later than the tenth anniversary of the Effective Date.
(3) If this Agreement is terminated pursuant to any of Sections 8(a),
8(b), or 8(c), Frelas shall have only sixty (60) days after the date of
termination to exercise the option granted under this Section 4(e) with
respect to that portion of the option that has vested as of the Cut-Off
Date, and Frelas shall have no right to exercise the option with respect to
that portion of the option that has not then vested.
(4) If this Agreement is terminated pursuant to Section 8(a) or 8(b),
WCCI shall be entitled (but not obligated) to repurchase the option and, if
the option has been exercised in whole or part, the common stock issued as
a result of such exercise, at a price as set forth on Exhibit B to this
Agreement, in the case of the option and stock issued before the date of
termination only within sixty (60) days of the date of termination, and in
the case of stock issued after the Cut-Off Date only within sixty (60) days
of such issuance.
(5) If this Agreement is terminated pursuant to Section 8(c) WCCI
shall be entitled to repurchase the option and, if exercised in whole or
part, the common stock issued as a result of such exercise, at the greater
of (i) 85% of the fair market value thereof (determined in accordance with
Section 4(e)(6)), and (ii) the price as set forth on Exhibit B to this
Agreement, in the case of the option and stock issued before the date of
termination only within sixty (60) days of the date of termination, and in
the case of stock issued after the Cut-Off Date only within sixty (60) days
of such issuance.
(6) For purposes of determining the fair market value of the option
and/or the common stock issued as a result of such exercise, if Frelas and
the Company cannot agree on a fair market value within thirty (30) days
after the Company proposes a value to Frelas, the Company shall appoint an
appraiser reasonably acceptable to Frelas, and the appraiser's valuation
shall be final and binding on both parties. The appraiser's costs and fees
shall be shared equally between Frelas and the Company.
(7) For as long as Frelas is an employee of the Company or an
Associated Company, Frelas shall be prohibited from transferring any shares
of WCCI common stock that he acquires through whole or partial exercise of
the option granted by this Section 4(e) to any Person other than the
Company. At any time when Frelas is not such an employee, the Company shall
have a right of first refusal with respect to any or all shares of WCCI
common stock that Frelas acquires through whole or partial exercise of the
option granted by this Section 4(e), and Frelas shall not transfer any such
shares to a third party without first offering to the Company the
opportunity, exercisable for at least 15 days, to purchase such shares at
the same or better price and terms as may be offered to Frelas by such
third party.
(8) If Frelas ceases to be an employee of the Company or any
Associated Company at any time following the fifth anniversary of the
Effective Date, the Company may within sixty (60) days of the date Frelas
ceases to be an employee of the Company or Associated Company require
Frelas to sell to it any or all shares that Frelas has acquired through
whole or partial exercise of the option granted by this Section 4(e) at a
price equal to 90% of the fair market value thereof (determined in
accordance with Section 4(e)(6)).
(9) The provisions of this Section 4(e) shall survive termination of
this Agreement.
f. Allowances. The Company shall provide Frelas with an apartment
allowance, use of a company car, and a personal travel allowances, each as set
forth on Exhibit C.
g. Expenses. The Company shall reimburse Frelas for reasonable
out-of-pocket expenses incurred by Frelas in connection with the business of the
Company and in performance of his duties under this Agreement, upon his
presentation to the Company of an itemized accounting of such expenses with
reasonable supporting data, subject, however, to the Company's policies relating
to business-related expenses as in effect from time to time.
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h. Additional Employee Benefits and Perquisites. In addition to the
foregoing, Frelas shall receive certain benefits and perquisites of current
Company employees, as may be determined from time to time by the Company,
including but not limited to:
(1) Benefits. During the term of this Agreement, Frelas shall be
eligible to participate in such life insurance, disability, health, dental,
and major medical insurance benefits as may be maintained from time to time
for the benefit of the employees of the Company, in each case to the extent
and in the manner available to other executive officers of the Company, as
well as in such pension and such other employee benefit plans and programs
as the Company may, in its sole to discretion, offer to Frelas. Frelas's
participation in each such benefit, plan or program shall be subject to the
terms and provisions of such plan or program, provided, however, that with
respect to any benefit plan adopted by the Company that bases the benefits
available under such plan to the compensation received by Frelas, such
benefits shall be calculated on the basis and to the extent of Frelas's
Base Salary.
(2) Vacation. Frelas shall be entitled to 20 days of paid vacation
during each calendar year. Frelas shall also be entitled to all paid
holidays given by the Company to its executives.
i. Deduction and Withholding. All compensation and other benefits to or on
behalf of Frelas pursuant to this Agreement shall be subject to such deductions
and withholding as may be agreed to by Frelas or required by applicable law.
5. CONFIDENTIALITY
a. Confidentiality. Frelas acknowledges that during the course of his
employment with the Company he will, from time to time, be invested with
confidential information (including without limitation) trade secrets relating
to, inter alia, the business practices, technology, products, business plans,
marketing, financial information and plans, and research activities of the
Company, Associated Companies, and customers and suppliers of the foregoing.
Frelas hereby agrees to keep all such information confidential, regardless
whether documents containing such information are marked as confidential, if he
has been told, or should reasonably know or expect, that such information is
confidential. Frelas also agrees that he will not, except as required in the
conduct of Company business, or as authorized in writing by the Company,
publish, disclose or make use of any such information or knowledge unless and
until such information or knowledge shall have ceased to be secret or
confidential without his fault.
b. Exclusive Property. Frelas confirms that all confidential information
is the exclusive property of the Company. All business records, papers and other
documents kept or made by Frelas relating to the business of the Company or an
Associated Company shall be and remain the property of the Company or the
Associated Company. Upon the termination of his employment with the Company or
upon the request of the Company at any time, Frelas shall promptly deliver to
the Company, and shall retain no copies of, any written materials, records and
documents made by Frelas or coming into his possession concerning the business
or affairs of the Company or an Associated Company other than personal notes or
correspondence of Frelas not containing proprietary information relating to such
business or affairs.
c. Inventions, Rights to Improvements. Frelas hereby sells, transfers and
assigns to the Company any right, title and interest in any and all inventions,
improvements, discoveries, and ideas (whether or not patentable or
copyrightable) (collectively the "Inventions") which Frelas may make or conceive
while acting in his capacity as an employee of the Company during the term of
this Agreement, and which relate to or are applicable to any phase of the
Company's and the Associated Companies' businesses. Frelas hereby agrees to
communicate promptly and disclose to the Company all information, details and
data pertaining to the aforementioned Inventions and to execute any documents
and do any act reasonably necessary to perform Frelas's duties under this
Section 5(c). Frelas also affirms that if any such Inventions shall be deemed
confidential by the Company, he will not disclose any such Inventions without
prior written authorization from a majority of the members of the Company's
Board of Directors.
d. Survival of Section. The provisions of this Section 5 shall survive the
termination of this Agreement for any reason whatsoever.
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6. EXCLUSIVITY/NON-COMPETITION
a. Exclusivity/No Competing Employment. For the term of this Agreement and
a period of one (1) year following the later of (i) expiration or earlier
termination of this Agreement or (ii) the date Frelas is no longer employed by
the Company or any Associated Company (the "Restricted Period"), Frelas shall
not directly or indirectly compete with the Company or any Associated Company,
and he shall not directly or indirectly own an interest in, manage, operate,
join, control, perform services for, lend money to, render financial or other
assistance to, participate in, or be connected with, as an officer, employee,
partner, stockholder, consultant or otherwise, any individual, partnership,
firm, corporation or other business organization or entity that at such time is
engaged in the same type of business as the Company or any Associated Company.
b. No Interference. During the Restricted Period, Frelas shall not,
whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization, intentionally
solicit, endeavor to entice away from the Company or an Associated Company, or
otherwise interfere with the relationship of the Company or an Associated
Company with any person who is employed by the Company or an Associated Company,
or any person or entity who is, or was within the twelve-month period
immediately preceding, a customer or client of the Company or an Associated
Company.
c. Stock Ownership. Nothing in this Agreement shall prohibit Frelas from
acquiring or holding any securities of any company listed on a national
securities exchange or quoted on the automated quotation system of the National
Association of Securities Dealers, Inc., provided that at any time during the
Restricted Period Frelas and members of his immediate family do not own more
than five percent (5%) of any voting securities of any company engaged in the
same type of business as the Company.
d. Territorial Scope. The prohibitions in Sections 6(a) and 6(b) shall
apply to Poland and any other place where the Company or any Associated Company
is doing business on the first day of the Restricted Period.
e. Survival of Section. The provisions of this Section 6 shall survive the
termination of this Agreement for any reason whatsoever.
7. REMEDIES
a. Arbitration. The Parties agree, expressly renouncing any other forum
for the resolution of disputes, that except as provided in Section 7(b), any
disputes arising out of, relating to, or arising in connection with this
Agreement or arising out of, relating to, or arising in connection with Frelas'
employment, shall be finally settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (except
insofar as those rules are modified by the terms of this Section 7). The
arbitration will be held in Hartford, Connecticut; and it shall be held as
promptly as possible at such time as the arbitration tribunal may determine. The
arbitration will be held in the English language. The arbitrator(s) shall state
the reasons upon which the award is based. Judgment upon the arbitration award
may be entered in any court of competent jurisdiction (including without
limitation the courts of the United States, any country where the Company or any
Associated Company is engaged in business, and the respective political
subdivisions of each of the foregoing), or application may be made to any such
court for a judicial acceptance of the award and an order of enforcement, as the
case may be. If any Party employs an attorney or commences legal or arbitral
proceedings to enforce the provisions of this Agreement, the prevailing Party
shall be entitled (unless the relevant tribunal decides otherwise) to recover
from the other, reasonable costs incurred in connection with such enforcement,
including but not limited to, attorney's fees and costs of investigation and
litigation/arbitration. Except as otherwise specifically provided in this
Section 7, no Party shall institute any action or proceeding against any other
Party in any court with respect to any dispute which is or could be the subject
of a claim or proceeding pursuant to this Section 7.
b. Equitable Remedies. Frelas hereby acknowledges that breaches of
Sections 5 or 6 of this Agreement may result in material irreparable injury to
the Company for which there is no adequate remedy at law, that it will not be
possible to measure damages for such breaches, and that in the event of such a
breach or threat
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thereof the Company shall be entitled (notwithstanding the provisions of Section
7(a)) to seek and obtain a temporary restraining order, a preliminary
injunction, a permanent injunction or other equitable relief restraining Frelas
from engaging in activities prohibited by this Agreement. Frelas further
acknowledges that in the event of such a breach or threat thereof the Company
shall be entitled to obtain such other or further relief as may be required to
specifically enforce any of the covenants of this Agreement. Frelas hereby
agrees and consents that such injunctive or other relief may be sought in any
state or federal court of competent jurisdiction in the County of Hartford,
State of Connecticut, or in the nation, state and/or political subdivision
thereof in which such violation may occur, or in any other court having
jurisdiction, at the election of the Company. Frelas agrees to and hereby does
submit to in persona jurisdiction before each and every such court for that
purpose.
c. Suspension of Payments. Frelas hereby acknowledges that should an
alleged breach of Sections 5 or 6 of this Agreement occur, the Company is
entitled to suspend any payments due to Frelas during litigation of any action
it may bring against Frelas for injunctive and/or monetary relief.
d. Remedies not Exclusive. The remedies of this Section shall be
cumulative and not exclusive, and shall be in addition to any other remedy which
the Company may have.
e. Survival of Remedies. This Section 7 shall survive the termination of
this Agreement for any reason whatsoever.
8. TERMINATION OF EMPLOYMENT
This Agreement and Frelas's employment hereunder may be terminated without
any breach of this Agreement under the following conditions:
a. Termination by Frelas. Frelas may terminate this Agreement, with or
without cause, by sending written notice thereof at least six (6) months in
advance of the date of his proposed termination.
b. Termination by the Company for Cause. The Company may terminate the
Agreement and Frelas's employment for Cause prior to the expiration of this
Agreement as provided in this Section 8(b). If the Cause is susceptible of
remedy by Frelas, then the Company shall first deliver to Frelas written notice
of such Cause; and if Frelas has not remedied the Cause within thirty (30) days
after receipt of that notice, the Company may terminate this agreement forthwith
thereafter by written notice effective immediately. If the Cause is not
susceptible of remedy by Frelas, then the Company may terminate this agreement
forthwith by written notice effective immediately. If the Company terminates
Frelas's employment for Cause, Frelas shall not be entitled to any compensation
or benefits after the effective date of his termination. For purposes of this
Section 8(c) "Cause" shall mean (1) dishonesty or fraud resulting in damage to
the business of the Company or any of its Associated Companies; (2) embezzlement
or theft of assets of the Company or any of its Associated Companies; (3)
competing with the Company or aiding a competitor of the Company or any of its
Associated Companies to the detriment of the Company or any of its Associated
Companies; (4) a substantial breach of this Agreement; (5) conduct of an illegal
or criminal nature under the laws of the United States, Poland, or any political
subdivision thereof; (6) conduct or activities that, as determined by the
Company in the reasonable exercise of its discretion, is injurious to the
reputation or affairs of the Company or any Associated Company; (7) violation,
as determined by the Company in the reasonable exercise of its discretion, of
any applicable polices and procedures set forth in the Chase Enterprises
Personnel Policy Manual; or (8) any other willful misconduct by Frelas which, as
determined by the Company in the reasonable exercise of its discretion, is
materially injurious to the Company, monetarily or otherwise.
c. Termination by the Company without Cause. Notwithstanding the
provisions of Section 8(b) above, the Company may terminate this Agreement and
Frelas's employment upon six (6) months' written notice without cause.
d. Later Employment With Successor in Interest of Company. Frelas shall
not be deemed to have been terminated under this Agreement if he is offered
employment on substantially the same or better terms by any Associated Company,
by any successor in interest or assign of the Company, or by any purchaser of
substantially all of the Company's assets.
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e. Death. Notwithstanding anything to the contrary herein contained,
Frelas's employment and this Agreement shall terminate upon his death or his
inability due to disability to perform the essential functions of his position
for a continuous period of sixty (60) days; provided, however, that the
provisions of Section 4(e) regarding vesting and exercise of the option and
regarding transferability and rights of first refusal with respect to stock
obtained through exercise of the option shall survive termination of this
Agreement and be binding upon the executors, administrators, heirs and
successors of Frelas.
f. Delivery of Material. Frelas agrees that upon the termination of this
Agreement he will deliver to the Company all documents, papers, materials and
other property of the Company relating to its affairs which may then be in his
possession or under his control.
9. NOTICES
a. All notices required to be given under the terms of this Agreement or
which any of the Parties may desire to give hereunder shall be in writing and
delivered personally or sent by express delivery, by facsimile, or by registered
or certified mail with proof of receipt, postage and expenses prepaid and with
return receipt requested, addressed as follows:
If to the Company:
World Cable Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, General Counsel
With a copy to:
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇.▇.▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Frelas:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
b. Notice given in accordance with this Section 9 shall be deemed to have
been given when delivered personally, or when received if sent via express
delivery, facsimile, or registered or certified mail, postage prepaid and return
receipt requested.
c. Any party may change its address for notices by communicating its new
address in writing to the other party.
10. MISCELLANEOUS
a. Agreement is Non-Assignable. This Agreement is a personal service
contract and shall not be assignable by Frelas or by the Company, except that
the Company may assign this Agreement to an Associated Company or a Person which
succeeds to the Company's rights and liabilities by merger, sale of assets as a
going concern, or consolidation with the Company.
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b. Binding Effect. All rights and obligations and agreements of the
parties under this Agreement shall be binding upon and enforceable against, and
inure to the benefit of the parties and their personal representatives, heirs,
legatees and devises, and any Person succeeding by operation of law to their
rights under this Agreement, except that such personal representatives, heirs,
legatees, devises and other persons shall have no obligation to perform Frelas's
duties described in Section 2 hereof.
c. Further Assurances. Frelas and the Company, as the case may be, shall
execute and deliver such further instruments and do such further acts and things
as may be required to carry out the terms or conditions of this Agreement or as
may be consistent with the intent and purpose of this Agreement.
d. Rights of Third Parties. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person other than the parties hereto any
rights or remedies under or by reason of this Agreement (except that any option
which has vested in Frelas as of the date of his death, as well as any accrued
but unpaid compensation as of the date of his death, shall pass to his estate on
death, subject to the limitations on exercise of the option contained in this
Agreement).
e. Effect of Waiver. A waiver of, or failure to exercise, any rights
provided for in this Agreement, in any respect, shall not be deemed a waiver of
any further or future rights hereunder. Except for rights which must be
exercised within a specified time period under this Agreement, no rights herein
shall be considered as waived, whether intentionally or not, unless waived in a
writing signed by the party to be charged with the waiver.
f. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Connecticut applicable to contracts
made and performed in that jurisdiction, without regard to the principles of
conflicts of laws.
g. Amendments. This Agreement may not be changed or amended orally, but
only by an agreement in writing signed by all parties hereto.
h. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, and such counterparts shall together
constitute but one and the same instrument.
i. Severability. If a court of competent jurisdiction declares that any
term or provision of this Agreement is invalid or unenforceable, then:
(1) the remaining terms and provisions hereof shall be unimpaired, and
(2) the invalid or unenforceable term or provision shall be deemed
replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable
term or provision.
j. No Conflicts. Frelas represents and warrants that he is not prevented
by any other employment agreement, arrangement, contract, understanding, court
order or otherwise, which in any way directly or indirectly conflicts, is
inconsistent with, or restricts or prohibits him from fully performing the
duties of the Employment, in accordance with the terms and conditions of this
Agreement.
k. Entire Agreement. This Agreement supersedes all prior agreements, oral
or written, between the parties hereto with respect to the employment of Frelas
by the Company. This Agreement contains the entire agreement of the parties with
respect to the employment of Frelas by the Company, and the parties shall not be
bound by any terms, conditions, statements, covenants, representations or
warranties, oral or written, not herein contained.
l. Employee Acknowledgment. FRELAS REPRESENTS THAT HE HAS HAD AMPLE
OPPORTUNITY TO REVIEW THIS AGREEMENT AND FRELAS ACKNOWLEDGES THAT HE UNDERSTANDS
THAT IT CONTAINS IMPORTANT CONDITIONS OF THE EMPLOYMENT AND THAT IT EXPLAINS
POSSIBLE CONSEQUENCES, BOTH FINANCIAL AND LEGAL, IF FRELAS BREACHES THE
AGREEMENT.
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IN WITNESS WHEREOF, the parties have executed this Executive Employment
Agreement effective as of the date first above written.
World Cable Communications, Inc., a
New York corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇. ▇▇▇▇ ▇▇▇▇▇▇
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EXHIBIT A
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EXHIBIT B
PER
DATE OF TERMINATION OF AGREEMENT PER SHARE OPTION
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Prior to First Anniversary of Effective Date ("Anniversary")............ $2,199.17 $ 208.00
On or After First But Before Second Anniversary......................... $2,406.64 $ 414.94
On or After Second But Before Third Anniversary......................... $2,614.11 $ 622.41
On or After Third But Before Fourth Anniversary......................... $2,821.58 $ 829.88
On or After Fourth But Before Fifth Anniversary......................... $3,029.05 $1,037.35
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EXHIBIT C
Apartment Allowance: A reasonable monthly allowance, determined mutually by
the parties, not expected to exceed $2,000 per month.
Car Allowance: The Company will make available to Frelas a car with
insurance and operating expenses to be at the Company's expense.
Personal Home Leave/Travel Allowance: Up to $15,000 per year to be used by
Frelas or immediate family members.
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STOCK OPTION AGREEMENT BETWEEN
▇▇▇▇ ▇▇▇▇▇▇ AND WORLD CABLE COMMUNICATIONS, INC.
This STOCK OPTION AGREEMENT ("Option Agreement") is made effective as of
September 1, 1996 (the "Effective Date"), by and between ▇▇▇▇ ▇▇▇▇▇▇ ("Frelas")
and World Cable Communications, Inc., a New York corporation ("WCCI" or the
"Company").
1. Grant of Option and Option Period.
a. The Company hereby grants Frelas an option (the "Option") to purchase
two hundred forty-one (241) shares (the "Shares") of the Company's common stock
(the "Common Stock"), with a par value of $0.01 per share, pursuant to the terms
and conditions set forth in this Option Agreement. The exercise price for the
Option (the "Exercise Price") shall be One Thousand, Nine Hundred and Ninety-One
Dollars and Seventy Cents ($1,991.70) per Share.
b. The option to purchase forty-eight (48) of these Shares will vest each
year on the anniversary date of the Effective Date beginning with the first
anniversary of the Effective Date, provided, however, that the option to
purchase forty-nine (49) of these Shares will vest on the fifth anniversary of
the Effective Date), and provided further that no portion of such option shall
vest after the date (the "Cut-Off Date") that is earlier of (i) the date that
the Executive Employment Agreement (as described in Section 14 of this
Agreement) is terminated and (ii) the date on which the Company sends Frelas a
notice referred to in Section 8(b) of the Executive Employment Agreement.
c. If Frelas's employment with the Company is terminated for any reason,
Frelas shall have only sixty (60) days after the Cut-Off Date to exercise that
portion of the Option that has vested as of the Cut-Off Date, and Frelas shall
have no right to exercise any portion of the Option that has not then vested.
d. Notwithstanding any other provision of this Option Agreement, the Option
shall expire and be of no further force or effect with respect to any Shares on
the earlier to occur of (i) the tenth anniversary of the Effective Date, or (ii)
sixty days after the date that Frelas ceases to be an employee of the Company
for any reason whatsoever (including but not limited to Frelas's death,
disability, voluntary termination or involuntary termination).
e. Each exercise of the Option shall reduce, by an equal number, the total
number of shares of Company Common Stock that may thereafter be purchased by
Frelas under the Option.
2. Manner of Exercise. Subject to the conditions and restrictions
contained in Section 3 below, the Option shall be exercised by delivering
written notice of exercise to the Secretary of the Company. Such notice shall be
irrevocable and must be accompanied by payment in cash or such other form of
consideration as the Company may approve, and a signed Subscription Agreement
satisfactory in form and substance to the Company.
3. Non-transferability. Neither this Option nor any interest therein may
be sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner (other than by will or by the laws of descent and distribution during the
option period described in Section 1). This Option is not assignable by
operation of law or subject to execution, attachment or similar process. During
Frelas's lifetime, the Option can only be exercised by Frelas. Any attempted
sale, pledge, assignment, hypothecation or other transfer of the Option or any
interest therein contrary to the provisions hereof, or the levy of any
execution, attachment or similar process upon the Option or any interest therein
shall be null and void and without force or effect. No transfer of the Option by
will or by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished written notice thereof and
an authenticated copy of the will and/or such other evidence as the Company may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee or transferees of the terms and conditions of the Option. The
terms of the Option transferred by will or by the laws of descent and
distribution shall be binding upon the executors, administrators, heirs and
successors of Frelas.
4. Adjustment in the Event of Change in Stock. In the event of any change
in the outstanding Common Stock of the Company due to stock dividends,
recapitalizations, reorganizations, mergers, consolidations, split-
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ups, or exchange of shares, the number and kind of the Shares and the purchase
price per Share will be appropriately adjusted, upwards or downwards, consistent
with such change. The reasonable determination of the Company regarding any
adjustment will be final and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of the Shares.
5. Restrictions on Transfer of the Shares.
a. For as long as Frelas is an employee of the Company or any Associated
Company (as that term is used in the Executive Employment Agreement that is
described in Section 14 of this Agreement), Frelas shall not transfer any Shares
to any person or entity other than WCCI.
b. After Frelas is no longer an employee of the Company or any Associated
Company Frelas shall not sell, encumber, pledge, transfer, hypothecate, assign
or otherwise dispose of any of the Shares until Frelas shall have first offered
to sell such Shares to the Company (the "Offer") in accordance with the
following provisions.
c. The Offer made pursuant to Subsection (b) above shall be in writing, and
shall state that Frelas offers to sell to the Company a specified number of the
Shares owned by Frelas. For every Offer of the Shares pursuant to Subsection (b)
above, the Company shall have a period of at least fifteen (15) days from the
time of receiving the Offer to accept it; such acceptance shall be in writing
and shall be sent to Frelas.
d. The purchase price of any of the Shares sold pursuant to the provisions
of Subsection (b) above shall be equal to the price offered to Frelas for such
shares by a bona fide third party purchaser, as evidenced by a written offer to
purchase executed by such third party. The purchase price shall be paid to
Frelas in cash within fifteen (15) days of the Company's acceptance of the
Offer. If any of the Shares which are offered for purchase pursuant to the
provisions of Subsection (c) above are not accepted for purchase by the Company
within the time limitations described in Subsection (b), Frelas may transfer
such shares to such bona fide third party purchaser in accordance with the terms
of such purchaser's offer to purchase referred to in this Subsection (d).
e. As a condition to the transfer of any of the Shares issued pursuant to
this Option Agreement, the Company may require an opinion of counsel,
satisfactory to the Company, to the effect that such transfer will not be in
violation of the Securities Act of 1933, as amended (such Act, or any similar
Federal statute than in effect, being hereinafter referred to as the "Act"), or
any other applicable securities laws, rules or regulations, or that such
transfer has been registered under Federal and all other applicable securities
laws.
f. Unless and until the Company has received a legal opinion regarding
saleability of the Shares that is satisfactory to the Company, all certificates
evidencing any of the Shares, whether upon initial issuance or any transfer
thereof, shall bear the following legends:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
OTHER SECURITIES LAWS, AND THEREFORE CANNOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR ASSIGNED UNLESS THEY ARE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND UNDER ALL OTHER APPLICABLE
SECURITIES LAWS, OR UNLESS AN EXEMPTION THEREFROM IS AVAILABLE.
THIS CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH THE
PROVISIONS OF THAT CERTAIN STOCK OPTION AGREEMENT, EFFECTIVE AS OF
, 1996, BETWEEN ▇▇▇▇ ▇▇▇▇▇▇ AND WORLD CABLE
COMMUNICATIONS, INC., A COPY OF WHICH IS ON FILE IN THE OFFICE OF THE
SECRETARY OF WORLD CABLE COMMUNICATIONS, INC.
6. No Stock Rights. Frelas shall not be entitled to vote, be deemed the
holder of any Shares, have the right to receive dividends with respect to any
Shares, or otherwise have any of the rights of a stockholder of the
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Company with respect to any Shares, unless and until Frelas has exercised the
Option with respect to such Shares in accordance with the terms and conditions
of this Option Agreement.
7. Reservation and Issuance of Shares.
a. The Company will at all times have authorized, and reserve and keep
available, free from preemptive rights, for the purpose of enabling it to
satisfy any obligation to issue the number of shares of Common Stock deliverable
upon exercise of the Option.
b. The Company covenants that all Shares will, upon issuance in accordance
with the terms of this Agreement, be duly authorized, fully paid and
non-assessable.
8. Representations and Warranties of Frelas.
In order to induce the Company to accept this Option Agreement, Frelas
hereby represents and warrants to the Company as follows:
a. Frelas has received no solicitation or general advertisement concerning
the Company, but rather has become knowledgeable regarding the business of the
Company through personal interaction with employees of the Company;
b. Frelas confirms that no representations or warranties have been made to
Frelas regarding the Company and that Frelas has not relied upon any
representation or warranty in making or confirming this Option Agreement.
c. Frelas has the ability to bear the economic investment, and can afford a
complete loss of his investment, with respect to the Option and to the Shares.
d. Frelas, either by himself or together with his purchaser representative,
has sufficient knowledge and experience in financial and business matters so as
to be capable of evaluating the merits and risks of his investment in the Option
and in the Shares.
e. Frelas is accepting the Option, and will be purchasing the Shares, for
investment purposes, for Frelas's own account and not with a view to, or for
sale in connection with, the distribution thereof.
f. Frelas is familiar with the nature of, and the risks attending,
investments in securities such as the Option and the Shares, and he has
determined that the acceptance of the Option and the purchase of the Shares is
and will be consistent with his investment objectives.
g. Frelas has been advised and understands that an investment in the Option
and in the Shares is speculative and involves a high degree of risk.
h. Frelas has no reason to anticipate any change in his personal
circumstances, financial or otherwise, which may cause or require sale or
distribution by him of all or any part of the Option or the Shares.
i. Frelas confirms that he has been given an opportunity to make any
inquiries of the Company and its representatives that he desires to make.
▇. ▇▇▇▇▇▇ is at least twenty-one (21) years of age.
k. Frelas is aware of and understands the following:
i. The business of the Company and the risks inherent in that
business;
ii. That no federal or state agency has made a finding or
determination as to the advisability or fairness of an investment in the
Option or in the Shares or any recommendation or endorsement of the Option
or of the Shares;
iii. That the Option and the Shares have not been registered for sale
under the Securities Act of 1933, as amended, or under any state "Blue Sky
Law"; and
iv. That there are substantial restrictions on the transferability of
the Option and of the Shares; there is no public market, and there will not
necessarily be any public market, for the Option or the Shares in
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the United States; Frelas will not be able to avail himself of the
provisions of Rule 144 adopted by the Securities and Exchange Commission
under the Securities Act of 1933, as amended, unless all of the conditions
of Rule 144 are met, and accordingly, Frelas may have to hold the Option
and the Shares and bear the economic risk of this investment for an
indefinite period.
l. If in the future Frelas desires to offer or dispose of the Option or any
of the Shares or any interest therein, he will do so only in compliance with
applicable securities laws and this Option Agreement.
▇. ▇▇▇▇▇▇ understands and agrees that the Company has no obligation to
complete any public or private offering and sale of its common stock to other
investors, and that the Company shall have no liability to Frelas if it cannot
complete any such offering and sale upon terms which, in the Company's sole
discretion, are favorable to the Company.
n. Frelas acknowledges that there may be restrictions under the securities
laws of Ontario and/or Connecticut on the sale of the shares he obtains on
exercise of the options, and that he should seek legal assistance before
proceeding with the purchase or sale of said shares.
Frelas agrees that the representations and warranties of Frelas set forth
in this Section 8 shall survive the exercise of the Option and the termination
or expiration of this Option Agreement.
9. Governing Law.
This Option Agreement shall be construed in accordance with and governed by
the laws of the State of Delaware without regard to the principles of conflicts
of laws or choice of law.
10. Benefit.
This Option Agreement shall be binding upon the Company, Frelas, their
heirs, executors, administrators, legal representatives, successors, and
permitted assigns, and Frelas in furtherance thereof may execute a will
directing Frelas's executor to perform this Option Agreement and to execute all
documents necessary to effectuate the purposes of this Option Agreement, but the
failure to execute such a will shall not affect the rights of the Company or the
obligations of Frelas's estate as provided in this Option Agreement. Nothing in
this Option Agreement, expressed or implied, is intended to confer upon any
person, other than the parties hereto, any rights or remedies under or by reason
of this Option Agreement.
11. Specific Performance.
a. The parties to this Option Agreement hereby agree that an award of
damages alone is inadequate to remedy a breach of the terms of this Option
Agreement and that specific performance, injunctive relief or other equitable
remedy is the only way by which the intent of this Option Agreement may be
adequately realized upon breach by one or more of the parties. Such remedy
shall, however, be cumulative and not exclusive, and shall be in addition to any
other remedy which the parties may have.
b. In furtherance of and not in limitation of the foregoing, should any
dispute arise concerning a sale, purchase, encumbrance, pledge, transfer,
hypothecation, assignment or other disposition of the Option or any of the
Shares which is alleged to contravene the provisions of this Option Agreement,
an injunction may be issued restraining any such transaction pending the
determination of such controversy.
12. Waiver.
Failure to insist upon strict compliance with any of the terms, covenants
or conditions of this Option Agreement shall not be deemed a waiver of such
terms, covenants or conditions, nor shall any waiver or relinquishment of any
right or power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
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13. Notice.
a. All notices required to be given under the terms of this Agreement or
which any of the Parties may desire to give hereunder shall be in writing and
delivered personally or sent by express delivery, by facsimile, or by registered
or certified mail with proof of receipt, postage and expenses prepaid and with
return receipt requested, addressed as follows:
If to the Company:
World Cable Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, General Counsel
With a copy to:
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇.▇.▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Frelas:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
b. Notice given in accordance with this Section 13 shall be deemed to have
been given when delivered personally, or when received if sent via express
delivery, facsimile, or registered or certified mail, postage prepaid and return
receipt requested.
c. Any party may change its address for notices by communicating its new
address in writing to the other party.
14. Entire Agreement.
This Option Agreement is subject to that certain between Frelas and the
Company of even date herewith (the "Executive Employment Agreement"), and in the
event of a conflict between them, the provisions of the Executive Employment
Agreement shall prevail. Except as provided in the foregoing sentence, this
Option Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and may be amended only by a writing
executed by all of the parties.
15. Severability.
The invalidity or unenforceability of any provision of this Option
Agreement shall in no way affect the validity or enforceability of any other
provision hereof.
16. Headings.
The headings to the sections of this Option Agreement are used for
reference only and are not to be construed as limiting or extending the
provisions hereof.
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17. Counterparts.
This Option Agreement may be executed in any number of counterparts, each
of which shall be considered an original but all of which shall constitute the
Option Agreement by and among the parties.
IN WITNESS WHEREOF, the undersigned have executed this Option Agreement
effective as of the date first above written.
World Cable Communications, Inc., a
New York corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
/s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
▇▇. ▇▇▇▇ ▇▇▇▇▇▇
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