Exhibit 10.3
EXECUTION COPY
SEVERANCE AGREEMENT
This Severance Agreement ("Agreement") is
entered into between Warren Mobley (the “Executive”)
and Moscow CableCom Corp. (the “Company”) on the dates
indicated below.
W I T N E S S
E T H
WHEREAS, Executive is the Chief Executive
Officer of the Company and is employed pursuant to an employment
agreement, dated January 13, 2005 (the “Employment
Agreement”);
WHEREAS, Executive has agreed to resign
his employment with the Company, and the Executive and the Company
agree that this resignation will be effective upon the close of
business on August 15, 2005 (the "Resignation Date");
WHEREAS, Executive agrees that he will
remain available as a consultant to the Company following the
Resignation Date until November 15, 2005 (the "Consultancy
Period");
WHEREAS, Executive agrees that upon the
expiration of the Consultancy Period, and earlier if requested by
the majority of the board of directors, he will resign from his
position as a member of the Board of Directors of the Company.
Following the Resignation Date, Executive shall no longer
hold any other officer or director positions with the Company or
any of its parents, subsidiaries or affiliates, or any other
offices or positions in connection with his employment with the
Company, and Executive agrees to execute such documents and take
such actions as may be necessary or desirable to effectuate the
foregoing; and
WHEREAS, Executive and the Company wish
to outline the terms and conditions of a termination of the
Executive's employment on the Resignation Date, so that the
Executive and the Company can settle, fully and finally, all
matters between them;
NOW THEREFORE, Executive and the Company,
intending to be legally bound, hereby agree as follows:
1.
Separation Payments and
Benefits .
In consideration for Executive's
consulting services, and for Executive's execution of and
compliance with the terms and conditions in this Agreement
including, but not limited to, Executive's consent to the Release
set forth in Section 2 below:
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(a)
The Company agrees to continue
Executive's current base salary until November 30, 2005 and such
continuing salary payments shall be made in accordance with the
Company's regular payroll practices. On or before November
30, 2005, the Company will deliver, or cause to be delivered, an
amount equal to one hundred sixteen thousand six hundred
sixty-seven Euros (€ 116,667), representing (i) the
additional amount of salary that the Executive would have received
if such salary were paid to him through July 31, 2006 and (ii) the
amount of any accrued and unused vacation time payable to Executive
as of July 31, 2006. Payments made under this Section 1(a)
will be net of any taxes, social security contributions and other
payments required by governmental authorities in Russia
(collectively, "Russian Taxes") and such amounts will be paid
without any diminishment as a result of any applicable Russian
Taxes, and the Company will bear full responsibility for all
applicable Russian Taxes.
(b)
Upon the Resignation Date, Executive will
be entitled to accelerated vesting of stock options to purchase
175,000 of the Company's shares, and the Company will allow
Executive a cashless exercise of such options at a strike price of
five dollars ($5.00) per share until December 31, 2006, after which
date such options will become null and void. For the sake of
clarification, the number of options has been calculated as the sum
of the following amounts: (i) options to purchase135,456 shares
that would otherwise have vested upon the expiration of his first
year of employment with the Company; (ii) options to purchase
33,864 shares that would otherwise have vested upon the expiration
of the first quarter of his second year of employment with the
Company; and (iii) options to purchase 5,680 shares that would
otherwise have vested upon expiration of the second quarter of his
second year of employment with the Company.
(c)
Until December 31, 2005 and subject to
the requirements, conditions, and limitations of the applicable
policy, Executive shall continue to participate in the following
Company benefit programs on the same basis that he participated
prior to the Resignation Date: health insurance, work-related
travel and D&O insurance coverage.
(d)
Until December 31, 2005, Executive shall
continue to be reimbursed for pre-agreed business-related expenses,
including reimbursement for Moscow housing, airfare for four
business-class round trip tickets (two tickets per quarter) between
Moscow, Russia, and the airport most convenient to his residence in
Italy, and tax-return preparation fees for tax year 2005. If
Executive elects to relocate his residence from Moscow, Russia at
any time before December 31, 2005, the Company shall reimburse his
reasonable expenses in doing so.
(e)
Executive will receive an employment
reference from the Company, in the form attached hereto. The
Company shall consult with Executive on the contents of any press
release that would discuss Executive's departure from the Company.
(f)
Executive acknowledges that the payments
and benefits referred to in this Agreement are in lieu of and in
full satisfaction of any amounts that might otherwise be payable or
due to him under any contract, plan, policy or practice,
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past or present, of the Company or any of
the other Company Releasees (as defined below), including, without
limitation, the Employment Agreement, and the Company's stock
option plan, and any other Company benefits plan. Except as
set forth in this Section 1, Executive acknowledges and agrees that
as of the Resignation Date, Executive shall not be eligible to
participate or continue to participate in any employee benefit
plans or compensation arrangements of the Company or any of the
other Company Releasees (as defined below) or otherwise be entitled
to any perquisite or fringe benefit.
2.
Release .
(a)
In consideration of the Company's
obligations set forth in this Agreement, including but not limited
to the payments and benefits described in Section 1 above,
Executive voluntarily, knowingly and willingly on behalf of
himself, his heirs, executors, administrators, successors and
assigns, hereby irrevocably and unconditionally releases the
Company, its parents, their subsidiaries, divisions and affiliates,
together with their respective owners, assigns, agents, directors,
partners, officers, employees, consulta
