Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of
December 16, 2005, by and between Insight Communications
Company, Inc., a Delaware corporation (the “
Company ”), and Michael S. Willner (“
Executive ”).
W I T N E S
S E T H :
WHEREAS, Executive has been employed
by the Company since 1985 and currently serves as its President and
Chief Executive Officer;
WHEREAS, pursuant to the Agreement
and Plan of Merger, dated as of July 28, 2005 (the “
Merger Agreement ”), between Insight Acquisition Corp.
(“ Acquisition Corp. ”) and the Company,
Acquisition Corp. will merge with and into the Company, with the
Company as the surviving corporation (the “ Merger
”); and
WHEREAS, the Company desires that,
from and after the date of Closing (as defined in the Merger
Agreement and such date, the “ Commencement Date
”), Executive shall continue to serve in Executive’s
current position, and Executive desires to continue such
employment, upon the terms set forth herein.
NOW, THEREFORE, in consideration of
the forgoing premises and the mutual covenants and promises
contained herein, and for other good and valuable consideration,
the Company and Executive hereby agree as follows:
1.
Agreement to Employ; No
Conflicts .
Upon the terms and subject to the
conditions of this Agreement, the Company hereby agrees to employ
Executive, and Executive hereby accepts employment with the
Company. Executive represents that ( a
) Executive is entering into this Agreement voluntarily, and
that Executive’s employment hereunder and compliance with the
terms and conditions hereof will not conflict with or result in the
breach by Executive of any agreement to which Executive is a party
or by which Executive may be bound, ( b ) Executive has
not violated, and in connection with Executive’s employment
with the Company will not violate, any non-competition,
non-solicitation or other similar covenant or agreement by which
Executive is or may be bound, and ( c ) in connection
with Executive’s employment by the Company, Executive will
not use any confidential or proprietary information Executive may
have obtained in connection with employment with any prior employer
(other than the Company and its subsidiaries following the
Commencement Date).
2.
Term; Position and
Responsibilities .
(a)
Term . This Agreement shall
become effective upon, and is conditioned upon the occurrence of,
the Commencement Date. Unless Executive’s employment
shall sooner terminate pursuant to Section 7, the Company
shall employ Executive for a term commencing on the Commencement
Date and ending on the third anniversary thereof (the “
Initial Term ”). Effective upon the expiration
of the Initial Term and of each Additional Term (as defined below),
Executive’s employment hereunder shall be deemed to be
automatically extended, upon the same terms and conditions, for an
additional period of one year (each, an “ Additional
Term ”), in each such case, commencing upon the
expiration of the Initial Term or the then current Additional Term,
as the case may be, unless, at least 120 days prior to the
expiration of the Initial Term or such Additional Term, the Company
or Executive, as the case may be, shall have notified the other
party hereto in writing that such extension shall not take
effect. The period during which Executive is employed
pursuant to this Agreement, including any extension thereof in
accordance with the preceding sentence, shall be referred to as the
“ Employment Period .” Notwithstanding
anything to the contrary in this Section 2(a), no Additional
Term shall commence after the date Executive reaches age
65.
(b)
Position and
Responsibilities . During the Employment
Period, Executive shall serve as President and Chief Executive
Officer of the Company; shall have such authority and
responsibilities, and perform such duties, as are customarily
assigned to individuals serving in those capacities at entities of
the Company’s size and nature and consistent with such
authority, responsibilities and duties assigned to Executive by the
Company prior to the Commencement Date, and, subject to the control
of the Board of Directors (the “ Board ”), shall
have general supervision, direction and control of the business and
officers of the corporation; and shall perform such other
reasonable employment duties and have such other authority
consistent with Executive’s titles and positions as the Board
specifies from time to time. During the Employment Period,
Executive shall report directly and exclusively to the Board.
Executive shall devote all of Executive’s skill, knowledge
and business time to the conscientious performance of such duties
and responsibilities, except for vacation time as set forth in
Section 6(b), absence for sickness or similar disability and
time spent performing services for any charitable, religious or
community organizations, so long as such services do not materially
interfere with the performance of Executive’s duties
hereunder.
3.
Base Salary
.
As compensation for the services to
be performed by Executive during the Employment Period, the Company
shall pay Executive a base salary at an annualized rate of $698,500
payable in periodic installments in accordance with the
Company’s regular payroll dates (but no less frequently than
monthly). The Compensation Committee of the Board (the
“ Committee ”) shall review Executive’s
base salary annually during the
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Employment Period and, in its sole discretion,
may increase such base salary from time to time. The annual
base salary payable to Executive under this Section 3, as the
same may be increased from time to time, shall hereinafter be
referred to as the “ Base Salary .”
4.
Incentive Compensation
.
(a)
Annual Cash
Bonus . During the Employment
Period, Executive shall be entitled to an annual cash bonus
opportunity for each of the Company’s fiscal years, subject
to and based on the attainment by Executive and the Company of
individual and financial performance targets to be determined by
the Committee upon the recommendations of Executive and Sidney
Knafel (the “ Bonus Plan ”). For each
fiscal year of the Company, Executive shall have a minimum cash
bonus opportunity under the Bonus Plan of up to 50% of
Executive’s Base Salary for such fiscal year.
Notwithstanding anything to the contrary contained in this
Agreement or any Bonus Plan and except as set forth in
Section 7(e)(i) or Section 7(e)(iii), Executive
shall be entitled to receive a bonus for any given fiscal year
pursuant to this Section 4(a) (and the Bonus Plan) only
if Executive is employed on the last day of such fiscal year.
Bonuses, if any, to senior executives shall be paid no later than 2
½ months after the end of the relevant fiscal
year.
(b)
Management
Bonus Pool . During the Employment
Period, in addition to the Annual Cash Bonus set forth in
Section 4(a), Executive shall be entitled to participate in
the Bonus Pool to be established as provided in the Securityholders
Agreement to be entered into among the Company and its shareholders
upon consummation of the Merger (the “ Securityholders
Agreement ”) and shall be allocated and awarded such cash
bonus opportunities as may be approved from time to time by the
Committee and subject to the terms and provisions of such Bonus
Pool. Notwithstanding anything to the contrary contained in
this Agreement or the Securityholders Agreement and except as set
forth in Section 7(e)(i) or Section 7(e)(iii),
Executive shall be entitled to receive a bonus pursuant to this
Section 4(b) only if Executive is employed by the Company
on the last day of the period to which such bonus
relates.
(c)
Equity
. In
connection with the Closing (as defined in the Merger Agreement),
Executive shall become a party to the Exchange Agreement (as
defined in the Merger Agreement) and, in connection therewith,
shall acquire one or more shares of stock of the Company, which
shall be issued pursuant to, and in accordance with, such Exchange
Agreement and the Merger Agreement. Executive shall also be
entitled to receive a grant of Series E and Series F
common stock of the Company as described in the Principal’s
Agreement, dated as of July 28, 2005, as amended, among the
Company, Sidney R. Knafel, Executive, Carlyle Partners III
Telecommunications, L.P., Carlyle Partners IV Telecommunications,
L.P., CP III Coinvestment, L.P. and CP IV Coinvestment, L.P. (the
“ Principal’s Agreement ”). The
subscription agreements relating to the grants of such stock
(and/or the related benefit plan) shall provide, among
other
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matters, that ( i
) with respect to grants of Series F common stock and
grants of Series E common stock with a Participation Level of
$11.75 per share, 10% of the shares issued to Executive shall vest
immediately upon issuance, 20% shall vest at the end of each of the
four years following the Commencement Date, and the remaining 10%
shall vest at the end of the fifth year the Commencement Date,
subject, in each case, to Executive’s continued employment
through the date of vesting, ( ii ) all unvested shares
of Series E and Series F common stock issued to the
Executive shall vest upon the consummation of a Sale of the Company
(as defined in the relevant benefit plan document or subscription
agreement) or in the event that Executive’s employment
terminates due to Executive’s death or is terminated by the
Company due to Executive’s Disability (as hereinafter
defined), ( iii ) upon a termination of
Executive’s employment by the Company without Cause (as
hereinafter defined) or by the Executive for Good Reason (as
hereinafter defined), ( x ) all of Executive’s
unvested Series E common stock shall immediately vest and (
y ) a number of Executive’s unvested shares of
Series F common stock equal to the amount, if any, by which
one-half of the total number of shares of Executive’s vested
and unvested Series F common stock exceeds the number of
shares of Executive’s Series F common stock that had
vested as of the date of such termination shall immediately vest
and ( iv ) notwithstanding anything in this Agreement
or in the applicable subscription agreements and/or related benefit
plan to the contrary, under no circumstances will any of
Executive’s vested shares be forfeited. For purposes of
this Section 4(c), “Disability” means the
inability of Participant to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last continuously through the final vesting date of the
applicable shares.
5.
Employee Benefits
.
During the Employment Period,
Executive shall be entitled to participate in any tax-qualified
defined contribution plan, all insurance programs, and all medical
and other health benefit plans, in each case, maintained by the
Company for its senior executives on terms and conditions set forth
in such plans (as amended from time to time).
6.
Perquisites and
Expenses .
(a)
General
. During
the Employment Period, Executive shall be entitled to receive such
perquisites as are generally provided by the Company from time to
time to its senior executive officers under the then current
policies and practices of the Company.
(b)
Vacation
. During
the Employment Period, Executive shall be entitled to four weeks of
paid vacation per calendar year, without carryover accumulation,
which shall accrue in equal installments on a monthly
basis.
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(c)
Company
Car . During the Employment
Period, the Company shall provide for the benefit of Executive an
automobile that is commensurate with Executive’s titles and
position hereunder and comparable to, and on terms no less
favorable than, that provided over the last 12 months. The
type of automobile that shall be provided for Executive’s
benefit shall be determined by Executive consistent with the
preceding sentence, subject to approval by the Committee; provided
that the cost to the Company shall be approved by the
Committee.
7.
Termination of
Employment .
(a)
Termination
Due to Death or Disability . In the event that
Executive’s employment hereunder terminates due to
Executive’s death or is terminated by the Company due to
Executive’s Disability (as defined below), Executive shall be
entitled to receive only the payments or benefits specified in
Section 7(e)(iii). For purposes of this Agreement,
“ Disability ” shall have the meaning given to
such term in the Company’s Long-Term Disability
Plan.
(b)
Termination by
the Company . The Company may
terminate Executive’s employment with the Company with or
without Cause. “ Cause ” shall mean (
i ) Executive’s failure to substantially perform
Executive’s duties hereunder (other than any such failure due
to Executive’s physical or mental illness), ( ii
) Executive’s engaging in misconduct that has caused or
is reasonably expected to result in injury to the Company or any of
its affiliates or any of their interests, ( iii
) Executive’s breach of fiduciary duty or fraud with
respect to the Company or any of its affiliates, ( iv
) Executive’s conviction of, or entering a plea of
guilty or nolo contendere to, a felony or other
serious crime, and ( v ) Executive’s material
breach of any of Executive’s obligations hereunder, under the
Company’s Securityholders Agreement, under any other written
agreement or covenant with the Company, or under any written
policy, program or code of the Company; provided ,
however , that, with respect to Sections 7(b)(i),
7(b)(ii) and 7(b)(v) , the Company shall provide written
notice to the Executive specifying in reasonable detail the
circumstances claimed to constitute Cause and, if such
circumstances may be corrected, such circumstances shall not
constitute Cause unless and until the Executive fails to correct
the circumstances set forth in the Company’s written notice
within, with respect to Sections 7(b)(ii) or 7(b)(v), 30 days
or, with respect to Section 7(b)(i), 60 days of receipt of
such notice; provided further that, if the
circumstances claimed to constitute Cause are not fully curable at
the time such written notice is provided and such circumstances
claimed to constitute Cause are the result of Executive’s
mere ordinary negligence or unintentional failure, act or omission
and were carried out (or omitted to be carried out) by the
Executive in good faith, such circumstances shall not constitute
Cause unless the Executive fails to correct the circumstances set
forth in the Company’s written notice within the time period
specified in the first proviso to this Section 7(b) to
the extent such circumstances are then curable or if not fully
curable, if the uncured circumstances have resulted or are
reasonably expected to result in material injury to the
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Company or any of its
affiliates. A termination for Cause shall include a
determination by the Board following the termination of the
Employment Period that circumstances existed during the Employment
Period that would have justified a termination by the Company for
Cause.
(c)
Termination by
Executive . Executive may
terminate his employment with the Company with or without Good
Reason. A termination of employment by Executive for “
Good Reason ” shall mean a termination by Executive of
Executive’s employment with the Company, by written notice to
the Company specifying in reasonable detail the circumstances
claimed to provide the basis for such termination, within 45 days
following the date on which Executive has actual knowledge of the
occurrence, without Executive’s consent, of any of the
following events and the failure of the Company to correct the
circumstances set forth in Executive’s written notice within
45 days of receipt of such notice: ( i ) the assignment
to Executive of duties that are significantly different from, and
that result in a substantial diminution of, the duties that
Executive has or is to assume on the Commencement Date, ( ii
) a reduction in the rate of Executive’s Base Salary
(other than in connection with an across the board reduction of the
base salaries of the senior executives of the Company that results
in an aggregate reduction in the rate of Executive’s Base
Salary of no more than ten percent (10%) during the Employment
Period), ( iii ) a material breach of this Agreement by
the Company or ( iv ) the Company delivers to Executive
notice of the Company’s intent not to renew this Agreement at
the end of the Initial Term or at the end of any Additional Term in
accordance with Section 2(a). Executive agrees that a
corporate reorganization by the Company and/or its affiliates
pursuant to which the Company ceases to exist or Executive’s
title is changed shall not constitute Good Reason hereunder so long
as there is no material diminution or change in the nature of
Executive’s duties described herein.
(d)
Notice of
Termination . Any termination of
Executive’s employment by the Company pursuant to
Section 7(a) or 7(b), or by Executive pursuant to
Section 7(c), shall be communicated by a written Notice of
Termination addressed to the other party to this Agreement. A
“ Notice of Termination ” shall mean a notice
stating that Executive’s employment with the Company has been
or will be terminated and the specific provisions of this
Section 7 under which such termination is being
effected.
(e)
Payments Upon
Certain Terminations .
(i)
Termination
Without Cause or For Good Reason . In the event of a
termination of Executive’s employment by the Company without
Cause or a termination by Executive of Executive’s employment
for Good Reason in either such case during the Employment Period,
the Company shall pay to Executive (or, following Executive’s
death, Executive’s beneficiaries) any accrued and unpaid Base
Salary and vacation earned through the Date of Termination,
plus , as liquidated damages in respect of claims based on
provisions of this Agreement
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and provided that
Executive executes and delivers a general release of all claims in
substantially the form set forth as Exhibit A to this
Agreement, which release shall not have been revoked, (
x ) an amount, payable in one lump sum during the fiscal
year after the Date of Termination on or about the same time as
other senior executives receive their annual incentive bonus from
the Company for the fiscal year of the Company that includes the
Date of Termination, equal to the product of ( A
) Executive’s annual cash bonuses for the fiscal year
which includes the Date of Termination as determined in accordance
with Sections 4(a) and 4(b), and ( B ) a fraction,
the numerator of which is equal to the number of days in such
fiscal year that precede the Date of Termination and the
denominator of which is equal to 365, plus , ( y )
continued payment of his Base Salary for the greater of the balance
of the Initial Term or 12 months (the “ Severance
Period ”), which shall be payable in installments on the
Company’s regular payroll dates, plus , ( z ) a
series of lump sum payments, payable each fiscal year of the
Company beginning with the fiscal year of the Company after the
Date of Termination and ending with the final lump sum payment in
the fiscal year of the Company after the fiscal year that includes
the last day of the Severance Period on or about the same time as
other senior executives receive their annual incentive bonus from
the Company for each applicable fiscal year of the Company, for
each fiscal year (or part thereof) during the Severance Period,
with the amount of such lump sum payment equal with respect to each
fiscal year to the annual cash bonuses for each such fiscal year
determined in accordance with Sections 4(a) and 4(b) as
if Executive were employed through the end of the Severance Period
except that Executive’s cash bonus opportunity shall be the
same as the opportunity he had in the fiscal year prior to the
fiscal year that includes the Date of Termination and the amount of
such annual cash bonuses for each such fiscal year shall be
determined as if performance targets with respect to each such
fiscal year were satisfied to the same extent such performance
targets were satisfied during the year prior to the year that
includes the Executive’s Date of Termination (with any
bonuses for any partial fiscal year in the Severance Period
determined as equal to the product of ( A
) Executive’s annual cash bonuses for the applicable
fiscal year determined as provided above in this subclause (z) of
this Section 7(e)(i), and ( B ) a fraction, the
numerator of which is equal to the number of days in such partial
fiscal year after the Date of Termination and during the Severance
Period, and the denominator
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