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Classic Communications - Employee Loan/stock Purchase Incentive Plan
CLASSIC COMMUNICATIONS, INC.
EMPLOYEE LOAN/STOCK PURCHASE INCENTIVE PLAN
1. PURPOSE
The Classic Communications, Inc. Employee Loan/Stock Purchase Incentive Plan (the "Plan") is intended to (i) encourage and facilitate ownership of shares of the Class A common stock of Classic Communications, Inc. (the "Company") by officers and other key employees of the Company and its Subsidiaries, (ii) provide those employees with a stronger, more immediate focus on shareholder value creation, (iii) create a working environment where participating employees of the Company and its Subsidiaries share in the same risks and rewards as the Company's other shareholders, and (iii) create a retention vehicle by:
o providing participating employees of the Company and its Subsidiaries
with an opportunity to significantly increase their ownership of the
Class A common stock of the Company coupled with incentive awards based
on the performance of the Company and its Class A common stock and
o providing this opportunity in a manner that places participating
employees at risk in the event of inadequate Company performance.
2. DEFINITIONS
Except where the content otherwise indicates, the following definitions apply:
"Board" means Board of Directors of the Company.
"Commission" means the Securities and Exchange Commission.
"Committee" means the Compensation and Benefits Committee of the Board or such other committee of the Board as may be designated by the Board.
"Common Stock" means the Class A common stock, $0.01 par value per Share, of the Company.
"Company" means Classic Communications, Inc., a Delaware corporation, or any successor corporation.
"Effective Date" means the date the Plan is adopted by the Board.
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"1934 Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.
"Participant" means each eligible employee of the Company or any of its Subsidiaries who is designated by the Committee to participate in the Plan.
"Plan" means this Classic Communications, Inc. Employee Loan/Stock Purchase Incentive Plan, as amended from time to time in accordance with the Plan's provisions.
"Plan Agreement" means that certain Agreement between a Participant and the Company substantially in the form of Exhibit B.
"Recourse Loan" means an extension of credit to the Participant by the Company evidenced by a Recourse Note.
"Recourse Note" means a full recourse note with respect to the Recourse Loan in substantially the same form as set forth on Exhibit A.
"Service" means employment as an employee or consultant with the Company or its Subsidiaries.
"Subsidiary" means a corporation (or partnership, joint venture, or other enterprise) of which the Company owns or controls, directly or indirectly, 50% or more of the outstanding shares of stock normally entitled to vote for the election of directors (or comparable equity or participation and voting power).
"Termination of Service" means a Participant's termination of Service such that he or she is no longer an employee or consultant of either the Company or any of its Subsidiaries for any reason whatsoever.
3. MAXIMUM LOAN AMOUNT UNDER THE PLAN
The aggregate loan amount under the Plan shall not exceed $5,000,000.
4. TERM OF THE PLAN
The Plan shall become effective on the Effective Date. The Plan shall be terminated on the expiration of the last outstanding Recourse Note.
5. ELIGIBLE PARTICIPANTS
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The individuals who, in the opinion of the Committee, can materially influence the long-term performance of the Company and/or its subsidiaries. The Committee shall have the sole power and complete discretion to select the individuals described above.
6. ELIGIBLE LOAN AMOUNT
Unless otherwise determined by the Committee, the maximum loan amount for each Participant shall not exceed (i) for employees, their total cash compensation for the year 1999, and (ii) for directors, $250,000.
7. LOAN PROVISIONS
(a) General. The Company shall extend a Recourse Loan to a
Participant subject to the terms and conditions set forth in
this Section 7. Such Recourse Loan shall be evidenced by a
Recourse Note, in a form similar to Exhibit A, with full
recourse against the Participant as maker of the note. The
obligations of the Participant under the Re course Note shall
be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged
or otherwise affected by any change in the existence,
structure or owner ship of the Company.
Notwithstanding anything to the contrary in this Section 7,
the Company shall not be required to make any Recourse Loan
to a Participant if the making of such Recourse Loan will (i)
cause the Company to violate any covenant or similar provision
in any indenture, loan agreement or other agreement, or (ii)
violate any applicable federal, state or local law.
(b) Interest. The Recourse Loan will bear interest at the Base
Rate as defined on the date of the Recourse Note in Classic
Cable, Inc.'s senior credit agreement dated as of July 28,
1998 plus 1.75%, plus 7% if the Participant either (i) sells,
assigns, transfers or otherwise disposes of the Restricted
Stock or (ii) resigns from or is involuntarily terminated from
employment with the Company, as further defined in the
Participant's Recourse Note.
(c) Term. The term of the Recourse Loan for any Participant shall
begin on the date of such Recourse Note and shall become due
and payable on the 7th anniversary of such date (the "Maturity
Date").
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(d) Prepayment. The Recourse Loan may be prepaid at any time
without any premium or penalty.
(e) Acceleration. The Recourse Loan may be accelerated as provided
for in the Participant's Recourse Note.
(f) Repayment of Market Appreciation. Upon the earlier of (i)
three (3) years after the date of the Participant's Recourse
Note or (ii) the date of a Change of Control (as defined
below), of Classic Communications, Inc., any after-tax profit
realized by the Participant as a result of any Restricted
Stock being directly or indirectly sold, contracted to be
sold, transferred, assigned or otherwise disposed of by the
Participant will be required to be repaid to the Company
within two (2) business days after the receipt of such
proceeds; provided, however, that this Section 7(f) will not
apply in the event that the Participant is terminated without
"Cause" (as hereinafter defined). For purposes of this Section
7(f), "Cause" shall mean (i) the willful and continued failure
by the Participant to substantially perform his duties with
the Company (other than any such failure resulting from the
Participant's incapacity due to physical or mental illness),
after demand for substantial performance is delivered by the
Company that specifically identifies the manner in which the
Company believes the Participant has not substantially
performed his duties, or (ii) the willful engaging by the
Participant in conduct that is demonstrably and materially
inj...
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