SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 26, 1996
Date of Report (Date of earliest event reported)
Hungarian Telephone and Cable Corp.
(Exact name of Registrant as Specified in Charter)
Delaware 1-11484 13-3652685
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
100 First Stamford Place, Stamford, Connecticut 06902
(Address of principal executive offices including zip code)
(203) 348-9069
(Registrant's telephone number, including area code)
Not applicable
(Former name or address, if changed since last report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
On July 26, 1996, Hungarian Telephone and Cable Corp. (AMEX: HTC-the
"Registrant") entered into a certain Termination and Release Agreement,
Consulting Agreement and Noncompetition Agreement with each of Robert Genova
(the Registrant's former Chairman of the Board of Directors, President and Chief
Executive Officer), Frank R. Cohen (the Registrant's former Director, Chief
Financial Officer, Treasurer and Secretary), and Donald K. Roberton (the
Registrant's former Vice-Chairman of the Board of the Directors) and each of
Messrs. Cohen, Genova and Roberton appointed the Registrant as his proxy in
voting his shares of the Registrant (see Exhibits 10.62-10.73 attached hereto).
James G. Morrison has been promoted from Vice-President and Chief Operating
Officer to President and Chief Executive Officer, and was elected a director, of
the Registrant. (See Exhibit 99.4 attached hereto.)
The Board of Directors of the Company elected William E. Starkey, a former
senior executive with GTE Corporation with 36 years of experience in
telecommunications, Warren B. French, Jr., former chairman of Shenendoah
Telephone Company and past chairman of the U.S. Telephone Association, and David
A. Finley, former IBM treasurer with over 20 years of experience with that
company to the Board to replace Messrs. Cohen, Genova and Roberton.
Pursuant to the Termination and Release Agreements between the Registrant and
each of Messrs. Genova, Cohen and Roberton, respectively (see Exhibits 10.62,
10.66 and 10.70 attached hereto), Messrs. Genova, Cohen and Roberton resigned as
employees, officers and directors of the Registrant and its subsidiaries and
affiliates effective August 1, 1996. In full and final satisfaction of the
Registrant's obligations to Messrs. Genova, Cohen and Roberton arising out of
their respective employment arrangements, the Registrant agreed to pay Messrs.
Genova, Cohen and Roberton $536,000, $452,000 and $700,000 in the aggregate,
respectively, in seventy-two (72) equal, consecutive, monthly, non-interest
bearing installments beginning on August 31, 1996. Messrs. Genova, Cohen and
Roberton each released the Company and certain other parties from any claims
arising in connection with their employment by the Registrant and the
termination of such employment. The Company released Messrs. Genova, Cohen and
Roberton from claims arising in connection with their employment by the
Registrant and the termination of such employment. Messrs. Genova, Cohen and
Roberton will retain all of their stock options granted pursuant to their
respective employment arrangements, which were terminated, and certain Stock
Option Agreements.
Pursuant to the Consulting Agreements between the Registrant and each of Messrs.
Genova, Cohen and Roberton, respectively (see Exhibits 10.63, 10.67 and 10.71
attached hereto), each of Messrs. Genova, Cohen and Roberton agreed to provide
up to two hundred (200) hours each year of certain consulting services to the
Registrant for a two-year period. For such services, the Registrant agreed to
pay Messrs. Genova, Cohen and Roberton $926,700, $408,150 and $333,750 in the
aggregate, respectively, in seventy-two (72) equal, consecutive, monthly,
non-interest bearing installments beginning on August 31, 1996.
Pursuant to the Noncompetition Agreements between the Registrant and each of
Messrs. Genova, Cohen and Roberton, respectively (see Exhibits 10.64, 10.68 and
10.72 attached hereto), Messrs. Genova, Cohen and Roberton each agreed that for
a period of six (6) years that they will not engage in, or have any financial
interest in, any business competing with, or which may compete with, the
business of the Registrant or any of its affiliates within the Republic of
Hungary and any countries bordering the Republic of Hungary. Messrs. Genova,
Cohen and Roberton may retain and/or acquire a financial interest in and serve
as a director, officer, employee, consultant or adviser to Hungarian
Teleconstruct Corp. for the purpose of developing, promoting or managing an
Internet access business within any part of Europe. Messrs. Genova, Cohen and
Roberton also agreed not to solicit for employment any of the current employees
of the Registrant. In consideration of such agreements not to compete, the
Registrant agreed to pay Messrs. Genova, Cohen and Roberton $2,162,300, $952,350
and $778,750 in the aggregate, respectively, in seventy-two (72) equal,
consecutive, monthly, non-interest bearing installments beginning on August 31,
1996.
Pursuant to the Irrevocable Proxies executed by Messrs. Genova, Cohen and
Roberton (see Exhibits 10.65, 10.69 and 10.73 attached hereto), each of Messrs.
Genova, Cohen and Roberton appointed the Registrant as his proxy for a six year
period to vote his shares of the Registrant's stock currently owned or
subsequently acquired.
The descriptions and summaries herein of certain agreements do not purport to be
complete, and are subject to, and qualified in their entirety by, reference to
each such agreement, copies of which are filed as exhibits hereto. See Item 7
below.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a), (b) - Not Applicable.
(c) Exhibits.
10.62 Termination and Release Agreement dated as of
July 26, 1996 between the Registrant and
Robert Genova
10.63 Consulting Agreement dated as of July 26, 1996
between the Registrant and Robert Genova
10.64 Noncompetition Agreement dated as of July 26, 1996
between the Registrant and Robert Genova
10.65 Irrevocable Proxy dated July 26, 1996 executed by
Robert Genova appointing Hungarian Telephone and
Cable Corp. as his proxy
10.66 Termination and Release Agreement dated as of
July 26, 1996 between the Registrant and
Frank R. Cohen
10.67 Consulting Agreement dated as of July 26, 1996
between the Registrant and Frank R. Cohen
10.68 Noncompetition Agreement dated as of July 26, 1996
between the Registrant and Frank R. Cohen
10.69 Irrevocable Proxy dated July 26, 1996 executed by
Frank R. Cohen appointing Hungarian Telephone
and Cable Corp. as his proxy
10.70 Termination and Release Agreement dated as of
July 26, 1996 between the Registrant and
Donald K. Roberton
10.71 Consulting Agreement dated as of July 26, 1996
between the Registrant and Donald K. Roberton
10.72 Noncompetition Agreement dated as of July 26, 1996
between the Registrant and Donald K. Roberton
10.73 Irrevocable Proxy dated July 26, 1996 executed
by Donald K. Roberton appointing Hungarian
Telephone and Cable Corp. as his proxy
99.4 Press Release dated July 29, 1996
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HUNGARIAN TELEPHONE AND CABLE CORP.
100 First Stamford Place
Stamford, CT 06902
(Registrant)
By: /s/ James G. Morrison
----------------------
James G. Morrison
President and Chief
Executive Officer
Dated: August 5, 1996
Stamford, Connecticut
TERMINATION AND RELEASE AGREEMENT
Exhibit 10.62
Agreement made this 26 day of July, 1996, between Hungarian
Telephone and Cable Corp. (the "Company"), and Robert Genova ("Genova").
WHEREAS, the Company has employed Genova, and the Company and Genova
desire to terminate Genova's employment with Company, but only on terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and Genova hereby agree as follows:
1. Genova hereby immediately resigns as a director of the Company and
all of its subsidiaries and affiliates, and resigns as an employee and officer
of the Company and all of its subsidiaries and affiliates, effective August 1,
1996. Concurrently with the execution of this Agreement, Genova is returning all
Company property currently in his possession.
2. Genova and the Company are parties to an Employment Agreement, dated
September 12, 1995, which includes a grant of stock options; a Stock Option
Agreement, dated December 24, 1992; and a Stock Option Agreement, dated February
7, 1995. Genova represents and warrants to the Company that, other than the
agreements identified in the preceding sentence, there are no other written or
oral agreements governing his employment by the Company (including related
compensation and benefits), and that he does not have, and will not seek, any
severance, social welfare, or similar rights under American or Hungarian law
arising out of the termination of his employment. Genova further represents and
warrants that during his tenure as an employee, officer, or director of the
Company he (i) did not knowingly engage in any activity that violates local,
state, or federal laws or the laws of the United States or of the Hungarian
Republic; (ii) did not knowingly engage in any activity that would constitute a
fraud against the Company or its Affiliates; and (iii) did not knowingly engage
in any activity that was inconsistent with the best interests of the Company as
an employee, officer, or director of the Company.
3. In full and final satisfaction of all of Company's obligations to
Genova arising out of or relating to his employment and Genova's aforementioned
employment agreement, the Company shall pay Genova the aggregate sum of
$536,000.00 in seventy-two (72) equal, consecutive, monthly, non-interest
bearing installments of $7,444.44 each, beginning on August 31, 1996, subject
to applicable tax withholdings. Genova will retain his rights as a stock
optionee, which, with respect to those options granted under his employment
agreement, will continue to be governed by the terms of that agreement. All
options granted under the Company's 1992 Incentive Stock Option Plan, as
amended, must be exercised within five (5) years of the date(s) such options
were originally granted, notwithstanding any provisions of the plan or any
option agreement relating to acceleration of the exercise date(s) due to
termination of Genova=s employment. If not exercised within five (5) years of
the date(s) such options were originally granted, the grant(s) will expire. The
payments due Genova under this paragraph 3 shall be made without defense,
offset, or counterclaim; any claim or defense by the Company for breach of this
Agreement to be asserted in a separate suit. In the event the Company fails to
make any payment under this paragraph 3 when due, which failure continues for
ten (10) days after written notice to the Company by Genova, then the Company
shall be required to pay interest on the unpaid amount at the rate of one and
one half percent (1.5%) per month for as long as the past due amount remains
unpaid, plus a one time late payment penalty equal to ten percent (10%) of the
amount then due. If the Company fails to make three (3) consecutive payments
under this paragraph 3, after appropriate written notice as stated above, the
entire balance of the aggregate payments due under this Agreement shall become
due and payable. In the event of Genova's death prior to the payment of all
amounts due under this Agreement, the payments due under this paragraph 3 shall
continue to be paid by the Company to Genova's designee, who shall be designated
by Genova in writing, or, upon Genova's failure to designate a designee in
writing, to Genova's estate.
<PAGE>
4. (a) In consideration of the payments and covenants of the Company
set forth herein (which Genova acknowledges are in excess of what is owed him),
Genova, on his own behalf and for his heirs, executors, administrators,
successors, and assigns, hereby releases the Company, its Affiliates, and their
respective present or former predecessors, successors, assigns, directors,
officers, shareholders, agents, employees, and anyone acting for any of them,
from any and all claims of any kind arising in connection with Genova's
employment by the Company and the termination thereof, including, but not
limited to, claims for breach of or interference with any alleged contract,
wrongful discharge, and any federal, state, or local discrimination laws,
including, without limitation, the Age Discrimination in Employment Act of 1967,
as amended, and claims alleging defamation, intentional infliction of emotional
distress, or any other tort. For the purpose of this Agreement, "Affiliate"
shall mean any company directly or indirectly owned or controlled by or under
common control with the Company; provided, that, for purposes of this Agreement,
CU Capitalcorp and its affiliates shall be deemed to be an Affiliate. (b) The
Company, its agents, and Affiliates, on their behalf and on the behalf of their
respective assigns, hereby release Genova and his heirs, executors,
administrators, successors, and assigns from any and all claims of any kind
arising in connection with Genova's employment with the Company (including his
service as a director) and the termination thereof.
(c) Genova, on the one hand, and the Company and its
Affiliates, on the other hand, acknowledge that if any fact with respect to any
matter covered by this Agreement is found hereafter to be other than or
different from the facts now believed by Genova to be true, this Agreement shall
be and remain in effect, notwithstanding such different facts. Both parties
acknowledge that the releases and waivers granted in this Agreement will not
release the Company or Genova from their respective obligations under this
Agreement, and that the releases and waivers do not waive rights or claims of
Genova against the Company or the Company against Genova which may arise after
the date this Agreement is executed. In addition, as a former director and
officer of the Company, Genova shall be entitled, following termination of his
employment, to indemnification to the fullest extent permitted under the
Company's bylaws and the Delaware General Corporation Law, as amended. Genova
acknowledges that he has been advised to consult with counsel prior to signing
this Agreement, and that he has been given until August 5, 1996 (which Genova
acknowledges is at least twenty-one (21) days from the date this Agreement was
first presented to Genova), to consider whether to accept this Agreement.
5. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The parties agree to submit to the exclusive
jurisdiction of the federal and state courts in the State of New York for any
dispute arising under or relating to this Agreement. The parties further agree
not to commence or continue litigation or other legal proceedings relating to
this Agreement in any forum other than New York, and waives any claim that New
York is an inconvenient forum.
6. Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Company:
L. R. Mitten
Citizens International Management
Services Company
3 High Ridge Park
Stamford, CT 06905
If to Genova:
Robert Genova
4 Woodlawn Drive
Andover, NJ 07821
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
7. This Agreement and other agreements being executed simultaneously
with this Agreement constitute the entire agreement between the parties hereto
with respect to the subjects thereof, and supersede and are in full substitution
for any and all prior understandings or agreements, written or oral, with
respect to Genova's employment and the other subjects covered in this Agreement
and in those other agreements. Genova shall not disclose, or permit any other
person to disclose, to the media or to any other person, other than his
immediate family, the negotiations or circumstances leading up to this Agreement
or those other agreements; the terms of this Agreement or those other
agreements; or the termination of Genova's employment by the Company. It is
acknowledged and agreed that the Company has the sole and exclusive right to
make (subject to Genova's prior review and approval, which approval shall not
unreasonably be withheld) or decline to make any public disclosures concerning
any or all of the foregoing subjects; provided, however, that no information
released by the Company regarding any or all of the foregoing subjects shall in
any way disparage Genova or his contributions to the Company.
8. This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
9. This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators, and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned by the Company or by Genova without written consent of
the parties, which shall not unreasonably be withheld.
IN WITNESS WHEREOF, the Company and Genova have executed this Agreement
as of the date first written above.
HUNGARIAN TELEPHONE AND CABLE CORP.
By: James Morrison
-------------------------------
s/Robert Genova
-------------------------------
ROBERT GENOVA
CONSULTING AGREEMENT
Exhibit 10.63
Agreement made this day 26 of July, 1996, between Hungarian
Telephone and Cable Corp. (the "Company"), and Robert Genova (the "Consultant");
WHEREAS, the Company previously employed the Consultant, and the
Company and the Consultant desire that the Company engage him as a part time
consultant, but only on terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and the Consultant hereby agree as follows:
1. This Agreement shall have a two (2) year term. During such term, the
Consultant shall consult for the Company as an independent contractor. He shall
render such consulting services as the Company may reasonably request, including
(1) preparing and delivering, on or before August 31, 1996, a detailed report
regarding all pending business matters involving or affecting the Company,
including, but not limited to, a description of all discussions held within the
past twelve (12) months with Tele Danmark; MATAV; Alcatel; Jasz-Com, Rt. (a/k/a
Jasztel); MCG, Rt. (a/k/a Monortel); Compagnie General de Eaux; any official,
representative, or agency of the government of the Republic of Hungary; or any
other individual, group, or entity regarding acquisitions, sales, investments,
or other business opportunities for the Company or its Affiliates; and (2) using
his knowledge, experience, and contacts to advise the Company concerning present
and future telecommunication concession opportunities in Europe, including
Hungary and the Czech Republic, and assisting the Company in pursuing those
opportunities. During the term of this Agreement, the Consultant shall be
available to render up to two hundred (200) hours of services each year, at
mutually agreeable times and places. The Consultant shall obey all policies of
the Company and of any company directly or indirectly owned or controlled by or
under common control with the Company (such other companies being hereinafter
referred to collectively as "Affiliates"). The Consultant shall not be an agent
of the Company, and shall not purport to act to bind the Company. He shall not
issue any press releases or otherwise deal with the media without express prior
approval of the Company.
2. (a) For consulting services provided under this Agreement, the
Company shall pay the Consultant the aggregate sum of $926,700.00, payable to
the Consultant in seventy-two (72) equal, consecutive, monthly, non-interest
bearing installments of $12,870.83 each, beginning on August 31 , 1996, subject
to applicable tax withholdings. The payments due the Consultant under this
paragraph 2(a) shall be made without defense, offset, or counterclaim; any claim
or defense by the Company for breach of this Agreement to be asserted in a
separate suit. In the event the Company fails to make any payment under this
paragraph 2(a) when due, which failure continues for ten (10) days after written
notice to the Company by the Consultant, then the Company shall be required to
pay interest on the unpaid amount at the rate of one and one half percent (1.5%)
per month for as long as the past due amount remains unpaid, plus a one time
late payment penalty equal to ten percent (10%) of the amount then due. If the
Company fails to make three (3) consecutive payments under this paragraph 2(a),
after appropriate written notice as stated above, the entire balance of the
aggregate payments due under this Agreement shall become due and payable. In the
event of the Consultant=s death after the expiration of the term of this
Agreement but prior to the payment of all amounts due under this Agreement, the
payments remaining due under this paragraph 2(a) shall continue to be paid by
the Company to the Consultant's designee, who shall be designated by the
Consultant in writing, or, upon the Consultant=s failure to designate a designee
in writing, to the Consultant's estate.
(b) As an independent contractor, the Consultant will not be
entitled to expense accounts, vacation time, sick leave, fringe benefits,
insurance coverage, or other employment benefits paid by the Company to its
employees.
(c) The Consultant shall be responsible for providing, as
needed, his own office space; arranging his own telephone, secretarial, and
other ordinary office needs; and shall not be entitled to reimbursement for such
expenses. If the Consultant is requested to travel on the Company's business, he
shall be reimbursed for reasonable expenses incurred, but only where approved in
advance by the Company.
3. The Company may terminate the Consultant's engagement at any time
for cause. For purposes of this Agreement, Acause@ shall mean dishonesty, fraud,
or misrepresentation by the Consultant that substantially injures the Company.
The Company must give the Consultant ninety (90) days notice of the Company=s
intention to terminate this Agreement for cause, and the Consultant shall be
entitled during such period to cure or correct his alleged deficiencies.
<PAGE>
4. The Consultant shall not divulge or communicate to any person
(except in performing his duties under this Agreement) or use for his own
purposes trade secrets, confidential commercial information, or any other
information, knowledge, or data of the Company or Affiliates (whether acquired
as an employee, director, or officer of the Company, as a consultant hereunder,
or otherwise) which are not generally known to the public, and shall use his
best efforts to prevent the publication or disclosure by any other person of any
such secret, information, knowledge, or data. All documents and objects made,
compiled, received, held, or used by the Consultant while engaged by the Company
in connection with the business of the Company shall be and remain the Company's
property and shall be delivered by the Consultant to the Company upon the
termination of the Consultant's engagement or at any earlier time requested by
the Company.
5. The Consultant hereby agrees that any and all improvements,
inventions, discoveries, formulae, processes, methods, know-how, confidential
data, trade secrets, and other proprietary information (collectively, "Work
Product") within the scope of any business of the Company or any Affiliate which
the Consultant may conceive, make, or have conceived or made during his
engagement with the Company shall be and are the sole and exclusive property of
the Company, and that the Consultant shall, whenever requested to do so by the
Company and without the payment of any additional compensation, at the Company's
expense, execute and sign any and all applications, assignments or other
instruments and do all other things that the Company may deem necessary or
appropriate (i) in order to apply for, obtain, maintain, enforce, or defend
patents of the United States or any foreign country for any Work Product, or
(ii) in order to assign, transfer, convey, or otherwise make available to the
Company the sole and exclusive right, title, and interest in and to any Work
Product.
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The Consultant agrees to submit to the
exclusive jurisdiction of the federal and state courts in the State of New York
for any dispute arising under or relating to this Agreement. He further agrees
not to commence or continue litigation or other legal proceedings relating to
this Agreement in any forum other than New York, and waives any claim that New
York is an inconvenient forum.
7. Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Company:
L. R. Mitten
Citizens International Management
Services Company
3 High Ridge Park
Stamford, CT 06905
If to the Consultant:
Robert Genova
4 Woodlawn Drive
Andover, NJ 07821
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
8. This Agreement and other agreements being executed simultaneously
with this Agreement constitute the entire agreement between the parties hereto
with respect to the subjects thereof, and supersede and are in full substitution
for any and all prior understandings or agreements, written or oral, with
respect to the Consultant=s employment and the other subjects covered in this
Agreement and in those other agreements. The Consultant shall not disclose, or
permit any other person to disclose, to the media or to any other person, other
than his immediate family, the negotiations or circumstances leading up to this
Agreement or those other agreements; the terms of this Agreement or those other
agreements; or the termination of the Consultant=s employment by the Company. It
is acknowledged and agreed that the Company has the sole and exclusive right to
make (subject to the Consultant=s prior review and approval, which approval
shall not unreasonably be withheld) or decline to make any public disclosures
concerning any or all of the foregoing subjects; provided, however, that no
information released by the Company regarding any or all of the foregoing
subjects shall in any way disparage the Consultant or his contributions to the
Company.
<PAGE>
9. This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
10. This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned, subcontracted or delegated by the Company (except to
an Affiliate) or by the Consultant.
11. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the Company and the Consultant have
executed this Agreement as of the date first written above.
HUNGARIAN TELEPHONE AND CABLE CORP.
By: James Morrison
------------------------------
s/Robert Genova
------------------------------
ROBERT GENOVA
NONCOMPETITION AGREEMENT
Exhibit 10.64
Agreement made this 26 day of July, 1996, between Hungarian
Telephone and Cable Corp. (the "Company"), and Robert Genova ("Genova");
WHEREAS, the Company previously employed Genova, and is now engaging
Genova as an independent consultant, and the Company and Genova wish to define
certain mutually agreed noncompetition covenants which Genova will adhere to,
and to provide adequate compensation to Genova in consideration of his entering
into such covenants; and
WHEREAS, in the course of such employment relationship, Genova obtained
extensive and sensitive confidential information concerning the Company's
business and its present and future prospects, and which information, if
available to a competitor of the Company, could cause serious competitive damage
to the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and Genova hereby agree as follows:
1. (a) This Agreement shall have a six (6) year term. During the term
of this Agreement, the Company shall pay Genova the aggregate sum of
$2,162,300.00, payable to Genova in seventy-two (72) equal, consecutive,
monthly, non-interest bearing installments of $30,031.94 each, beginning on
August 31, 1996, subject to applicable tax withholdings. The payments due
Genova under this paragraph 1(a) shall be made without defense, offset, or
counterclaim; any claim or defense by the Company for breach of this Agreement
to be asserted according to the procedures set forth in paragraphs 1(b), 2, or 5
below. In the event the Company fails to make any payment under this paragraph
1(a) when due, which failure continues for ten (10) days after written notice to
the Company by Genova, then the Company shall be required to pay interest on the
unpaid amount at the rate of one and one half percent (1.5%) per month for as
long as the past due amount remains unpaid, plus a one time late payment penalty
equal to ten percent (10%) of the amount then due. If the Company fails to make
three (3) consecutive payments under this paragraph 1(a), after appropriate
written notice as stated above, the entire balance of the aggregate payments due
under this Agreement shall become due and payable. In the event of Genova=s
death prior to the payment of all amounts due under this Agreement, the payments
due under this paragraph 1(a) shall continue to be paid by the Company to
Genova=s designee, who shall be designated by Genova in writing, or, upon
Genova=s failure to designate a designee in writing, to Genova's estate.
(b) If any dispute arises between the Company and Genova
regarding Genova=s compliance with the terms of this Agreement, and the parties
are unable to resolve such dispute to their mutual satisfaction, the dispute
shall be submitted to binding arbitration, by a single arbitrator, pursuant to
the Commercial Arbitration Rules of the American Arbitration Association;
provided, however, that while the arbitration is pending, the Company shall
continue to make all payments due Genova under this Agreement. The arbitrator to
preside at the arbitration shall be designated within ten (10) days of the
demand for arbitration, and the arbitration hearing shall be commenced within
thirty (30) days of the designation of an arbitrator. The arbitration hearing
shall be held at a location to be designated by the arbitrator within New York,
New York, unless an alternative location is agreed to by the parties. The
arbitrator shall control the scheduling (so as to process the matter
expeditiously) and any discovery; provided, however, that the arbitrator must
render a decision in each matter submitted for arbitration within sixty (60)
days of the demand for arbitration. All times specified in this paragraph 1(b)
may be extended upon mutual agreement of the parties; provided, however, that no
such extension shall adversely affect the claims of or damages awardable to the
Company through the arbitration. If the arbitrator decides that Genova's actions
violate or otherwise do not comply with his obligations under this Agreement,
the arbitrator must order Genova to immediately cease and desist engaging in
such actions. Damages caused by Genova's actions may also be assessed by the
arbitrator, but only for the period from the date the Company first advised
Genova of its dispute to the date on which Genova brings his actions into full
compliance with the arbitrator's decision; provided, however, that in no case
shall the amount of damages assessed by the arbitrator exceed the total amount
of payments due Genova under this Agreement for the period to which the damages
apply. The fees and expenses of each arbitration procedure, including the fees
of the arbitrator, shall be shared equally by the parties to the arbitration;
however, the non-prevailing party in each arbitration shall be required to
reimburse the reasonable, non-shared costs of the prevailing party, except for
the prevailing party's attorneys fees and related costs.
<PAGE>
2. Genova agrees that for a period of six (6) years from the date of
this Agreement he will not, directly or indirectly, whether or not for
compensation and whether or not as an employee or independent contractor, be
engaged in or have any financial interest in any business competing with or
which may compete with the business of the Company (or with any business of any
Affiliate) within the Republic of Hungary and bordering countries. For the
purpose of this Agreement, Genova shall be deemed to be engaged in or to have a
financial interest in such a business if he is an employee, officer, director,
or partner of any person, partnership, corporation, trust, or other entity which
is engaged in such a business; if he directly or indirectly performs services
for such entity; or if he or any member of his immediate family beneficially
owns an equity interest, or interest convertible into equity, in any such
entity; provided, however, that the foregoing shall not prohibit Genova or a
member of his immediate family from owning, for the purpose of passive
investment, less than five percent (5%) of any class of securities of a publicly
held corporation; and, further provided, that the foregoing shall not prohibit
Genova or a member of his immediate family from owning a financial interest in
or from serving as a director, officer, employee, consultant, or advisor to
Hungarian Teleconstruct Corp., or its successor, for the limited purpose of
developing, promoting, or managing an Internet access business within any part
of Europe. Genova recognizes that a breach or threatened breach by him of his
obligations under this paragraph 2 would cause irreparable injury to the
Company, and the Company shall be entitled to preliminary and permanent
injunctions enjoining him from violating this paragraph 2, in addition to any
other remedies which may be available. For the purpose of this Agreement, the
business of the Company and of its Affiliates shall be deemed to be the
telecommunications and cable television businesses. The term "Affiliate" shall
mean any company directly or indirectly owned or controlled by or under common
control with the Company.
3. Genova acknowledges that: (i) in the course of his employment by the
Company he obtained extensive access to the Company's trade secrets and
confidential commercial information; (ii) the duration and geographic scope of
this Agreement are reasonably necessary to protect the Company's legitimate
commercial interests; (iii) that the restrictions contained herein will not
unreasonably impair his ability to earn a living; and (iv) that if he violates
the restrictions in this Agreement the Company will suffer irreparable injury.
4. Genova agrees that he will not solicit for employment any of the
current employees of the Company, and further agrees that neither he nor any
entity with which he is affiliated will employ any person for a period of three
(3) months following that person=s resignation from the Company or Affiliates.
5. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. Genova agrees to submit to the exclusive
jurisdiction of the federal and state courts in the State of New York for any
dispute arising under or relating to this Agreement, except those subject to the
arbitration procedures set forth in paragraph 1(b). Genova further agrees not to
commence or continue litigation or other legal proceedings relating to this
Agreement in any forum other than New York, and waives any claim that New York
is an inconvenient forum.
6. Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Company:
L. R. Mitten
Citizens International Management
Services Company
3 High Ridge Park
Stamford, CT 06905
If to Genova:
Robert Genova
4 Woodlawn Drive
Andover, NJ 07821
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
<PAGE>
7. This Agreement and other agreements being executed simultaneously
with this Agreement constitute the entire agreement between the parties hereto
with respect to the subjects thereof, and supersede and are in full substitution
for any and all prior understandings or agreements, written or oral, with
respect to Genova's employment and the other subjects covered in this Agreement
and in those other agreements. Genova shall not disclose, or permit any other
person to disclose, to the media or to any other person, other than his
immediate family, the negotiations or circumstances leading up to this Agreement
or those other agreements; the terms of this Agreement or those other
agreements; or the termination of Genova=s employment by the Company. It is
acknowledged and agreed that the Company has the sole and exclusive right to
make (subject to Genova=s prior review and approval, which approval shall not
unreasonably be withheld) or decline to make any public disclosures concerning
any or all of the foregoing subjects; provided, however, that no information
released by the Company regarding any or all of the foregoing subjects shall in
any way disparage Genova or his contributions to the Company.
8. This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
9. This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators, and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned by the Company (except to an Affiliate) or by Genova.
10. If any provision of this Agreement, or portion thereof, is so
broad, in scope or duration, so as to be unenforceable, such provision or
portion thereof shall be interpreted to be only so broad as is enforceable.
11. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the Company and Genova have executed this Agreement
as of the date first written above.
HUNGARIAN TELEPHONE AND CABLE CORP.
By:James Morrison
--------------------------------
s/Robert Genova
--------------------------------
ROBERT GENOVA
IRREVOCABLE PROXY
I hereby irrevocably appoint Ronald E. Spears, on behalf of
Hungarian Telephone and Cable Corp. ("HTCC"), and HTCC, and each of them, with
full power of substitution, delegation or designation, and, in case of
substitution, delegation, or designation, such substitute(s), delegate(s) or
designee(s), as attorneys and agents for me and, in my name, place and stead, to
vote as my proxy at meetings of the stockholders of HTCC upon any proposal which
may be brought before such meetings, including the election of Directors, and to
consent to any proposal which may be presented for approval by written consent
in lieu of meetings, in the same manner and extent, and to exercise all other
powers that I might have, were I personally present.
I mandate my proxy to exercise, at its and his discretion, at
any meeting of the stockholders of HTCC, or by written consent in lieu of
meetings, all of the voting rights attached to all shares I own, hold or have
the right or power to vote in the capital stock of HTCC (all of the shares I
currently own, hold or have the right or power to vote as of the date hereof,
plus all such shares or voting rights I may acquire, hold or have hereafter
being the "Shares") and to vote such Shares in its and his discretion with
respect to any proposal that may come before meetings or be presented for
approval by written consent.
This proxy shall be effective and irrevocable for six years
from the date hereof. This proxy shall remain in full force and effect and be
enforceable against any donee, transferee or assignee of any of my Shares
(except for a purchaser who acquires such Shares on a publicly traded exchange).
I hereby revoke any and all proxies and voting instructions with respect to any
of my Shares previously given, and I agree that I will not, nor will I permit
any entity under my control, or any donee, transferee or assignee to, deposit
any of my Shares in a voting trust or subject any of my Shares to any
arrangement with respect to the voting of my Shares inconsistent with this
proxy.
This proxy is given in connection with the Termination and
Release Agreement, the Consulting Agreement and the Noncompetition Agreement,
each between the undersigned and HTCC, the Letter of Credit opened by HTCC with
Citibank, N.A., and the Guaranty executed by CU CapitalCorp., each dated the
date hereof. By this proxy I hereby undertake to do all acts necessary and to
sign all documents which may be necessary or useful to give effect to this proxy
and to the actions taken pursuant hereto or at any annual or special meeting of
shareholders of HTCC or pursuant to any request for written consent.
Dated: July 26, 1996.
-----------------------------
Robert Genova
TERMINATION AND RELEASE AGREEMENT
Exhibit 10.66
Agreement made this 26 day of July, 1996, between Hungarian
Telephone and Cable Corp. (the "Company"), and Frank R. Cohen ("Cohen").
WHEREAS, the Company has employed Cohen, and the Company and Cohen
desire to terminate Cohen's employment with Company, but only on terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and Cohen hereby agree as follows:
1. Cohen hereby immediately resigns as a director of the Company and
all of its subsidiaries and affiliates, and resigns as an employee and officer
of the Company and all of its subsidiaries and affiliates, effective August 1,
1996. Concurrently with the execution of this Agreement, Cohen is returning all
Company property currently in his possession.
2. Cohen and the Company are parties to an Employment Agreement, dated
September 12, 1995, which includes a grant of stock options; a Stock Option
Agreement, dated December 24, 1992; and a Stock Option Agreement, dated February
7, 1995. Cohen represents and warrants to the Company that, other than the
agreements identified in the preceding sentence, there are no other written or
oral agreements governing his employment by the Company (including related
compensation and benefits), and that he does not have, and will not seek, any
severance, social welfare, or similar rights under American or Hungarian law
arising out of the termination of his employment. Cohen further represents and
warrants that during his tenure as an employee, officer, or director of the
Company he (i) did not knowingly engage in any activity that violates local,
state, or federal laws or the laws of the United States or of the Hungarian
Republic; (ii) did not knowingly engage in any activity that would constitute a
fraud against the Company or its Affiliates; and (iii) did not knowingly engage
in any activity that was inconsistent with the best interests of the Company as
an employee, officer, or director of the Company.
3. In full and final satisfaction of all of Company's obligations to
Cohen arising out of or relating to his employment and Cohen's aforementioned
employment agreement, the Company shall pay Cohen the aggregate sum of
$452,000.00 in seventy-two (72) equal, consecutive, monthly, non-interest
bearing installments of $6,277.78 each, beginning on August 31, 1996, subject
to applicable tax withholdings. Cohen will retain his rights as a stock
optionee, which, with respect to those options granted under his employment
agreement, will continue to be governed by the terms of that agreement. All
options granted under the Company's 1992 Incentive Stock Option Plan, as
amended, must be exercised within five (5) years of the date(s) such options
were originally granted, notwithstanding any provisions of the plan or any
option agreement relating to acceleration of the exercise dates due to
termination of Cohen's employment. If not exercised within five (5) years of the
dates such options were originally granted, the grant(s) will expire. The
payments due Cohen under this paragraph 3 shall be made without defense, offset,
or counterclaim; any claim or defense by the Company for breach of this
Agreement to be asserted in a separate suit. In the event the Company fails to
make any payment under this paragraph 3 when due, which failure continues for
ten (10) days after written notice to the Company by Cohen, then the Company
shall be required to pay interest on the unpaid amount at the rate of one and
one half percent (1.5%) per month for as long as the past due amount remains
unpaid, plus a one time late payment penalty equal to ten percent (10%) of the
amount then due. If the Company fails to make three (3) consecutive payments
under this paragraph 3, after appropriate written notice as stated above, the
entire balance of the aggregate payments due under this Agreement shall become
due and payable. In the event of Cohen's death prior to the payment of all
amounts due under this Agreement, the payments due under this paragraph 3 shall
continue to be paid by the Company to Cohen's designee, who shall be designated
by Cohen in writing, or, upon Cohen's failure to designate a designee in
writing, to Cohen's estate.
<PAGE>
4. (a) In consideration of the payments and covenants of the Company
set forth herein (which Cohen acknowledges are in excess of what is owed him),
Cohen, on his own behalf and for his heirs, executors, administrators,
successors and assigns, hereby releases the Company, its Affiliates, and their
respective present or former predecessors, successors, assigns, directors,
officers, shareholders, agents, employees, and anyone acting for any of them,
from any and all claims of any kind arising in connection with Cohen's
employment by the Company and the termination thereof, including, but not
limited to, claims for breach of or interference with any alleged contract,
wrongful discharge, and any federal, state, or local discrimination laws,
including, without limitation, the Age Discrimination in Employment Act of 1967,
as amended, and claims alleging defamation, intentional infliction of emotional
distress, or any other tort.
(b) The Company, its agents and Affiliates, on their behalf
and on the behalf of their respective assigns, hereby release Cohen and his
heirs, executors, administrators, successors, and assigns from any and all
claims of any kind arising in connection with Cohen's employment with the
Company (including his service as a director of the Company) and the termination
thereof.
(c) Cohen, on the one hand, and the Company and its
Affiliates, on the other hand, acknowledge that if any fact with respect to any
matter covered by this Agreement is found hereafter to be other than or
different from the facts now believed by Cohen to be true, this Agreement shall
be and remain in effect, notwithstanding such different facts. Both parties
acknowledge that the releases and waivers granted in this Agreement will not
release the Company or Cohen from their respective obligations under this
Agreement, and that the releases and waivers do not waive rights or claims of
Cohen against the Company or the Company against Cohen which may arise after the
date this Agreement is executed. In addition, as a former director and officer
of the Company, Cohen shall be entitled, following termination of his
employment, to indemnification to the fullest extent permitted under the
Company's bylaws and the Delaware General Corporation Law, as amended. Cohen
acknowledges that he has been advised to consult with counsel prior to signing
this Agreement, and that he has been given until, August 5, 1996, (which Cohen
acknowledges is at least twenty-one (21) days from the date this Agreement was
first presented to Cohen) to consider whether to accept this Agreement. For the
purpose of this Agreement, "Affiliate" shall mean any company directly or
indirectly owned or controlled by or under common control with the Company;
provided, that, for purposes of this Agreement, CU Capitalcorp and its
affiliates shall be deemed to be an Affiliate.
5. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The parties agree to submit to the exclusive
jurisdiction of the federal and state courts in the State of New York for any
dispute arising under or relating to this Agreement. The parties further agree
not to commence or continue litigation or other legal proceedings relating to
this Agreement in any forum other than New York, and waives any claim that New
York is an inconvenient forum.
6. Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Company:
L. R. Mitten
Citizens International Management
Services Company
3 High Ridge Park
Stamford, CT 06905
If to Cohen:
Frank R. Cohen
190 E. 72nd Street
New York, NY 10021
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
<PAGE>
7. This Agreement and other agreements being executed simultaneously
with this Agreement constitute the entire agreement between the parties hereto
with respect to the subjects thereof, and supersede and are in full substitution
for any and all prior understandings or agreements, written or oral, with
respect to Cohen's employment and the other subjects covered in this Agreement
and in those other agreements. Cohen shall not disclose, or permit any other
person to disclose, to the media or to any other person, other than his
immediate family, the negotiations or circumstances leading up to this Agreement
or those other agreements; the terms of this Agreement or those other
agreements; or the termination of Cohen=s employment by the Company. It is
acknowledged and agreed that the Company has the sole and exclusive right, to
make (subject to Cohen=s prior review and approval, which approval shall not
unreasonably be withheld), or decline to make, any public disclosures concerning
any or all of the foregoing subjects; provided, however, that no information
released by the Company regarding any or all of the foregoing subjects shall in
any way disparage Cohen or his contributions to the Company.
8. This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
9. This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned by the Company or by Cohen without written consent of
the parties, which shall not unreasonably be withheld.
IN WITNESS WHEREOF, the Company and Cohen have executed this Agreement
as of the date first written above.
HUNGARIAN TELEPHONE AND CABLE CORP.
By:James Morrison
-------------------------------
s/Frank R. Cohen
-------------------------------
FRANK R. COHEN
CONSULTING AGREEMENT
Exhibit 10.67
Agreement made this 26 day of July, 1996, between Hungarian
Telephone and Cable Corp.(the "Company"), and Frank R. Cohen (the "Consultant");
WHEREAS, the Company previously employed the Consultant, and the
Company and the Consultant desire that the Company engage him as a part time
consultant, but only on terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and the Consultant hereby agree as follows:
1. This Agreement shall have a two (2) year term. During such term, the
Consultant shall consult for the Company as an independent contractor. He shall
render such consulting services as the Company may reasonably request, including
(1) preparing and delivering, on or before August 31, 1996, a detailed report
regarding all pending business matters involving or affecting the Company,
including, but not limited to, a description of all discussions held within the
past twelve (12) months with Tele Danmark; MATAV; Alcatel; Jasz,- Com, Rt.
(a/k/a Jasztel); MCG, Rt. (a/k/a Monortel); Compagnie General de Eaux; any
official, representative, or agency of the government of the Republic of
Hungary; or any other individual, group, or entity regarding acquisitions,
sales, investments, or other business opportunities for the Company or its
Affiliates; and (2) using his knowledge, experience, and contacts to advise the
Company concerning present and future telecommunication concession opportunities
in Europe, including Hungary and the Czech Republic, and assisting the Company
in pursuing those opportunities. During the term of this Agreement, the
Consultant shall be available to render up to two hundred (200) hours of
services each year, at mutually agreeable times and places. The Consultant shall
obey all policies of the Company and of any company directly or indirectly owned
or controlled by or under common control with the Company (such other companies
being hereinafter referred to collectively as "Affiliates"). The Consultant
shall not be an agent of the Company, and shall not purport to act to bind the
Company. He shall not issue any press releases or otherwise deal with the media
without express prior approval of the Company.
2. (a) For consulting services provided under this Agreement, the
Company shall pay the Consultant the aggregate sum of $408,150.00, payable to
the Consultant in seventy-two (72) equal, consecutive, monthly, non-interest
bearing installments of $5,668.75 each, beginning on August 31, 1996, subject
to applicable tax withholdings. The payments due the Consultant under this
paragraph 2(a) shall be made without defense, offset, or counterclaim; any claim
or defense by the Company for breach of this Agreement to be asserted in a
separate suit. In the event the Company fails to make any payment under this
paragraph 2(a) when due, which failure continues for ten (10) days after written
notice to the Company by the Consultant, then the Company shall be required to
pay interest on the unpaid amount at the rate of one and one half percent (1.5%)
per month for as long as the past due amount remains unpaid, plus a one time
late payment penalty equal to ten percent (10%) of the amount then due. If the
Company fails to make three (3) consecutive payments under this paragraph 2(a),
after appropriate written notice as stated above, the entire balance of the
aggregate payments due under this Agreement shall become due and payable. In the
event of the Consultant=s death after the expiration of the term of this
Agreement but prior to the payment of all amounts due under this Agreement, the
payments remaining due under this paragraph 2(a) shall continue to be paid by
the Company to the Consultant's designee, who shall be designated by the
Consultant in writing, or, upon the Consultant's failure to designate a designee
in writing, to the Consultant's estate.
(b) As an independent contractor, the Consultant will not be
entitled to expense accounts, vacation time, sick leave, fringe benefits,
insurance coverage, or other employment benefits paid by the Company to its
employees.
(c) The Consultant shall be responsible for providing, as
needed, his own office space; arranging his own telephone, secretarial, and
other ordinary office needs; and shall not be entitled to reimbursement for such
expenses. If the Consultant is requested to travel on the Company's business, he
shall be reimbursed for reasonable expenses incurred, but only where approved in
advance by the Company.
3. The Company may terminate the Consultant's engagement at any time
for cause. For purposes of this Agreement, Acause@ shall mean dishonesty, fraud,
or misrepresentation by the Consultant that substantially injures the Company.
The Company must give the Consultant ninety (90) days notice of the Company=s
intention to terminate this Agreement for cause, and the Consultant shall be
entitled during such period to cure or correct his alleged deficiencies.
<PAGE>
4. The Consultant shall not divulge or communicate to any person
(except in performing his duties under this Agreement) or use for his own
purposes trade secrets, confidential commercial information, or any other
information, knowledge, or data of the Company or Affiliates (whether acquired
as an employee, director, or officer of the Company, as a consultant hereunder,
or otherwise) which are not generally known to the public, and shall use his
best efforts to prevent the publication or disclosure by any other person of any
such secret, information, knowledge, or data. All documents and objects made,
compiled, received, held, or used by the Consultant while engaged by the Company
in connection with the business of the Company shall be and remain the Company's
property and shall be delivered by the Consultant to the Company upon the
termination of the Consultant's engagement or at any earlier time requested by
the Company.
5. The Consultant hereby agrees that any and all improvements,
inventions, discoveries, formulae, processes, methods, know-how, confidential
data, trade secrets, and other proprietary information (collectively, "Work
Product") within the scope of any business of the Company or any Affiliate which
the Consultant may conceive, make, or have conceived or made during his
engagement with the Company shall be and are the sole and exclusive property of
the Company, and that the Consultant shall, whenever requested to do so by the
Company and without the payment of any additional compensation, at the Company's
expense, execute and sign any and all applications, assignments or other
instruments and do all other things that the Company may deem necessary or
appropriate (i) in order to apply for, obtain, maintain, enforce, or defend
patents of the United States or any foreign country for any Work Product, or
(ii) in order to assign, transfer, convey, or otherwise make available to the
Company the sole and exclusive right, title, and interest in and to any Work
Product.
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The Consultant agrees to submit to the
exclusive jurisdiction of the federal and state courts in the State of New York
for any dispute arising under or relating to this Agreement. He further agrees
not to commence or continue litigation or other legal proceedings relating to
this Agreement in any forum other than New York, and waives any claim that New
York is an inconvenient forum.
7. Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Company:
L. R. Mitten
Citizens International Management
Services Company
3 High Ridge Park
Stamford, CT 06905
If to the Consultant:
Frank R. Cohen
190 E. 72nd Street
New York, NY 10021
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
8. This Agreement and other agreements being executed simultaneously
with this Agreement constitute the entire agreement between the parties hereto
with respect to the subjects thereof, and supersede and are in full substitution
for any and all prior understandings or agreements, written or oral, with
respect to the Consultant's employment and the other subjects covered in this
Agreement and in those other agreements. The Consultant shall not disclose, or
permit any other person to disclose, to the media or to any other person, other
than his immediate family, the negotiations or circumstances leading up to this
Agreement or those other agreements; the terms of this Agreement or those other
agreements; or the termination of the Consultant's employment by the Company. It
is acknowledged and agreed that the Company has the sole and exclusive right to
make (subject to the Consultant's prior review and approval, which approval
shall not unreasonably be withheld) or decline to make any public disclosures
concerning any or all of the foregoing subjects; provided, however, that no
information released by the Company regarding any or all of the foregoing
subjects shall in any way disparage the Consultant or his contributions to the
Company.
<PAGE>
9. This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
10. This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned, subcontracted or delegated by the Company (except to
an Affiliate) or by the Consultant.
11. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the Company and the Consultant have
executed this Agreement as of the date first written above.
HUNGARIAN TELEPHONE AND CABLE CORP.
By: James Morrison
-----------------------------
s/Frank R. Cohen
------------------------------
FRANK R. COHEN
NONCOMPETITION AGREEMENT
Exhibit 10.68
Agreement made this 26 day of July, 1996, between Hungarian
Telephone and Cable Corp. (the "Company"),
and Frank R. Cohen ("Cohen");
WHEREAS, the Company previously employed Cohen, and is now engaging
Cohen as an independent consultant, and the Company and Cohen wish to define
certain mutually agreed noncompetition covenants which Cohen will adhere to, and
to provide adequate compensation to Cohen in consideration of his entering into
such covenants; and
WHEREAS, in the course of such employment relationship, Cohen obtained
extensive and sensitive confidential information concerning the Company's
business and its present and future prospects, and which information, if
available to a competitor of the Company, could cause serious competitive damage
to the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and Cohen hereby agree as follows:
1. (a) This Agreement shall have a six (6) year term. During the term
of this Agreement, the Company shall pay Cohen the aggregate sum of $952,350.00,
payable to Cohen in seventy-two (72) equal, consecutive, monthly, non-interest
bearing installments of $13,227.08 each, beginning on August 31, 1996, subject
to applicable tax withholdings. The payments due Cohen under this paragraph 1(a)
shall be made without defense, offset, or counterclaim; any claim or defense by
the Company for breach of this Agreement to be asserted according to the
procedures set forth in paragraphs 1(b), 2, or 5 below. In the event the Company
fails to make any payment under this paragraph 1(a) when due, which failure
continues for ten (10) days after written notice to the Company by Cohen, then
the Company shall be required to pay interest on the unpaid amount at the rate
of one and one half percent (1.5%) per month for as long as the past due amount
remains unpaid, plus a one time late payment penalty equal to ten percent (10%)
of the amount then due. If the Company fails to make three (3) consecutive
payments under this paragraph 1(a), after appropriate written notice as stated
above, the entire balance of the aggregate payments due under this Agreement
shall become due and payable. In the event of Cohen=s death prior to the payment
of all amounts due under this Agreement, the payments due under this paragraph
1(a) shall continue to be paid by the Company to Cohen=s designee, who shall be
designated by Cohen in writing, or, upon Cohen's failure to designate a designee
in writing, to Cohen's estate.
(b) If any dispute arises between the Company and Cohen
regarding Cohen=s compliance with the terms of this Agreement, and the parties
are unable to resolve such dispute to their mutual satisfaction, the dispute
shall be submitted to binding arbitration, by a single arbitrator, pursuant to
the Commercial Arbitration Rules of the American Arbitration Association;
provided, however, that while the arbitration is pending, the Company shall
continue to make all payments due Cohen under this Agreement. The arbitrator to
preside at the arbitration shall be designated within ten (10) days of the
demand for arbitration, and the arbitration hearing shall be commenced within
thirty (30) days of the designation of an arbitrator. The arbitration hearing
shall be held at a location to be designated by the arbitrator within New York,
New York, unless an alternative location is agreed to by the parties. The
arbitrator shall control the scheduling (so as to process the matter
expeditiously) and any discovery; provided, however, that the arbitrator must
render a decision in each matter submitted for arbitration within sixty (60)
days of the demand for arbitration. All times specified in this paragraph 1(b)
may be extended upon mutual agreement of the parties; provided, however, that no
such extension shall adversely affect the claims of or damages awardable to the
Company through the arbitration. If the arbitrator decides that Cohen=s actions
violate or otherwise do not comply with his obligations under this Agreement,
the arbitrator must order Cohen to immediately cease and desist engaging in such
actions. Damages caused by Cohen's actions may also be assessed by the
arbitrator, but only for the period from the date the Company first advised
Cohen of its dispute to the date on which Cohen brings his actions into full
compliance with the arbitrator's decision; provided, however, that in no case
shall the amount of damages assessed by the arbitrator exceed the total amount
of payments due Cohen under this Agreement for the period to which the damages
apply. The fees and expenses of each arbitration procedure, including the fees
of the arbitrator, shall be shared equally by the parties to the arbitration;
however, the non-prevailing party in each arbitration shall be required to
reimburse the reasonable, non-shared costs of the prevailing party, except for
the prevailing party's attorneys fees and related costs.
<PAGE>
2. Cohen agrees that for a period of six (6) years from the date of
this Agreement he will not, directly or indirectly, whether or not for
compensation and whether or not as an employee or independent contractor, be
engaged in or have any financial interest in any business competing with or
which may compete with the business of the Company (or with any business of any
Affiliate) within the Republic of Hungary and bordering countries. For the
purpose of this Agreement, Cohen shall be deemed to be engaged in or to have a
financial interest in such a business if he is an employee, officer, director,
or partner of any person, partnership, corporation, trust, or other entity which
is engaged in such a business; if he directly or indirectly performs services
for such entity; or if he or any member of his immediate family beneficially
owns an equity interest, or interest convertible into equity, in any such
entity; provided, however, that the foregoing shall not prohibit Cohen or a
member of his immediate family from owning, for the purpose of passive
investment, less than five percent (5%) of any class of securities of a publicly
held corporation; and, further provided, that the foregoing shall not prohibit
Cohen or a member of his immediate family from owning a financial interest in or
from serving as a director, officer, employee, consultant, or advisor to
Hungarian Teleconstruct Corp., or its successor, for the limited purpose of
developing, promoting, or managing an Internet access business within any part
of Europe. Cohen recognizes that a breach or threatened breach by him of his
obligations under this paragraph 2 would cause irreparable injury to the
Company, and the Company shall be entitled to preliminary and permanent
injunctions enjoining him from violating this paragraph 2, in addition to any
other remedies which may be available. For the purpose of this Agreement, the
business of the Company and of its Affiliates shall be deemed to be the
telecommunications and cable television businesses. The term "Affiliate" shall
mean any company directly or indirectly owned or controlled by or under common
control with the Company.
3. Cohen acknowledges that: (i) in the course of his employment by the
Company he obtained extensive access to the Company's trade secrets and
confidential commercial information; (ii) the duration and geographic scope of
this Agreement are reasonably necessary to protect the Company's legitimate
commercial interests; (iii) that the restrictions contained herein will not
unreasonably impair his ability to earn a living; and (iv) that if he violates
the restrictions in this Agreement the Company will suffer irreparable injury.
4. Cohen agrees that he will not solicit for employment any of the
current employees of the Company, and further agrees that neither he nor any
entity with which he is affiliated will employ any person for a period of three
(3) months following that person=s resignation from the Company or Affiliates.
5. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. Cohen agrees to submit to the exclusive
jurisdiction of the federal and state courts in the State of New York for any
dispute arising under or relating to this Agreement, except those subject to the
arbitration procedures set forth in paragraph 1(b). Cohen further agrees not to
commence or continue litigation or other legal proceedings relating to this
Agreement in any forum other than New York, and waives any claim that New York
is an inconvenient forum.
6. Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Company:
L. R. Mitten
Citizens International Management
Services Company
3 High Ridge Park
Stamford, CT 06905
If to Cohen:
Frank R. Cohen
190 E. 72nd Street
New York, NY 10021
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
<PAGE>
7. This Agreement and other agreements being executed simultaneously
with this Agreement constitute the entire agreement between the parties hereto
with respect to the subjects thereof, and supersede and are in full substitution
for any and all prior understandings or agreements, written or oral, with
respect to Cohen's employment and the other subjects covered in this Agreement
and in those other agreements. Cohen shall not disclose, or permit any other
person to disclose, to the media or to any other person, other than his
immediate family, the negotiations or circumstances leading up to this Agreement
or those other agreements; the terms of this Agreement or those other
agreements; or the termination of Cohen=s employment by the Company. It is
acknowledged and agreed that the Company has the sole and exclusive right to
make (subject to Cohen=s prior review and approval, which approval shall not
unreasonably be withheld) or decline to make any public disclosures concerning
any or all of the foregoing subjects; provided, however, that no information
released by the Company regarding any or all of the foregoing subjects shall in
any way disparage Cohen or his contributions to the Company.
8. This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
9. This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators, and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned by the Company (except to an Affiliate) or by Cohen.
10. If any provision of this Agreement, or portion thereof, is so
broad, in scope or duration, so as to be unenforceable, such provision or
portion thereof shall be interpreted to be only so broad as is enforceable.
11. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the Company and Cohen have executed this Agreement
as of the date first written above.
HUNGARIAN TELEPHONE AND CABLE CORP.
By:James Morrison
-------------------------------
s/Frank R. Cohen
-------------------------------
FRANK R. COHEN
IRREVOCABLE PROXY
I hereby irrevocably appoint Ronald E. Spears, on behalf of
Hungarian Telephone and Cable Corp. ("HTCC"), and HTCC, and each of them, with
full power of substitution, delegation or designation, and, in case of
substitution, delegation, or designation, such substitute(s), delegate(s) or
designee(s), as attorneys and agents for me and, in my name, place and stead, to
vote as my proxy at meetings of the stockholders of HTCC upon any proposal which
may be brought before such meetings, including the election of Directors, and to
consent to any proposal which may be presented for approval by written consent
in lieu of meetings, in the same manner and extent, and to exercise all other
powers that I might have, were I personally present.
I mandate my proxy to exercise, at its and his discretion, at
any meeting of the stockholders of HTCC, or by written consent in lieu of
meetings, all of the voting rights attached to all shares I own, hold or have
the right or power to vote in the capital stock of HTCC (all of the shares I
currently own, hold or have the right or power to vote as of the date hereof,
plus all such shares or voting rights I may acquire, hold or have hereafter
being the "Shares") and to vote such Shares in its and his discretion with
respect to any proposal that may come before meetings or be presented for
approval by written consent.
This proxy shall be effective and irrevocable for six years
from the date hereof. This proxy shall remain in full force and effect and be
enforceable against any donee, transferee or assignee of any of my Shares
(except for a purchaser who acquires such Shares on a publicly traded exchange).
I hereby revoke any and all proxies and voting instructions with respect to any
of my Shares previously given, and I agree that I will not, nor will I permit
any entity under my control, or any donee, transferee or assignee to, deposit
any of my Shares in a voting trust or subject any of my Shares to any
arrangement with respect to the voting of my Shares inconsistent with this
proxy.
This proxy is given in connection with the Termination and
Release Agreement, the Consulting Agreement and the Noncompetition Agreement,
each between the undersigned and HTCC, the Letter of Credit opened by HTCC with
Citibank, N.A., and the Guaranty executed by CU CapitalCorp., each dated the
date hereof. By this proxy I hereby undertake to do all acts necessary and to
sign all documents which may be necessary or useful to give effect to this proxy
and to the actions taken pursuant hereto or at any annual or special meeting of
shareholders of HTCC or pursuant to any request for written consent.
Dated: July 26, 1996.
----------------------------
Frank R. Cohen
TERMINATION AND RELEASE AGREEMENT
Exhibit 10.70
Agreement made this 26 day of July, 1996, between Hungarian
Telephone and Cable Corp. (the "Company"), and Donald K. Roberton ("Roberton").
WHEREAS, the Company has employed Roberton, and the Company and
Roberton desire to terminate Roberton's employment with Company, but only on
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and Roberton hereby agree as follows:
1. Roberton hereby immediately resigns as a director of the Company and
all of its subsidiaries and affiliates, and resigns as an employee and officer
of the Company and all of its subsidiaries and affiliates, effective August 1,
1996. Concurrently with the execution of this Agreement, Roberton is returning
all Company property currently in his possession.
2. Roberton has no written employment or stock option agreements with
the Company; however, he has a verbal agreement with Robert Genova, acting in
his role as Chairman of the Company, providing for Roberton=s employment as Vice
Chairman of the Company (at an annual salary of $250,000), and for a grant of
200,000 stock options under the Company's 1992 Incentive Stock Option Plan, as
amended (at an exercise price of $14 per share). Roberton represents and
warrants to the Company that there are no other written or oral agreements
governing his employment by the Company (including related compensation and
benefits), and that he does not have, and will not seek, any severance, social
welfare, or similar rights under American or Hungarian law arising out of the
termination of his employment. Roberton further represents and warrants that
during his tenure as an employee, officer, or director of the Company he (i) did
not knowingly engage in any activity that violates local, state, or federal laws
or the laws of the United States or of the Hungarian Republic; (ii) did not
knowingly engage in any activity that would constitute a fraud against the
Company or its Affiliates; and (iii) did not knowingly engage in any activity
that was inconsistent with the best interests of the Company as an employee,
officer, or director of the Company.
3. In full and final satisfaction of all of Company's obligations to
Roberton arising out of or relating to his employment and Roberton's
aforementioned verbal employment agreement (other than his rights as a stock
optionee), the Company shall pay Roberton the aggregate sum of $700,000.00 in
seventy-two (72) equal, consecutive, monthly, non-interest bearing installments
of $9,722.22 each, beginning on August 31, 1996, subject to applicable tax
withholdings. Roberton will retain his rights as a stock optionee; however, all
options granted to Roberton under the Company's 1992 Incentive Stock Option
Plan, as amended, must be exercised within five (5) years of the date(s) such
options were originally granted, notwithstanding any provisions of the plan or
any option agreement relating to acceleration of the exercise date(s) due to
termination of Roberton's employment. If not exercised within five (5) years of
the date(s) such options were originally granted, the grant(s) will expire. The
payments due Roberton under this paragraph 3 shall be made without defense,
offset, or counterclaim; any claim or defense by the Company for breach of this
Agreement to be asserted in a separate suit. In the event the Company fails to
make any payment under this paragraph 3 when due, which failure continues for
ten (10) days after written notice to the Company by Roberton, then the Company
shall be required to pay interest on the unpaid amount at the rate of one and
one half percent (1.5%) per month for as long as the past due amount remains
unpaid, plus a one time late payment penalty equal to ten percent (10%) of the
amount then due. If the Company fails to make three (3) consecutive payments
under this paragraph 3, after appropriate written notice as stated above, the
entire balance of the aggregate payments due under this Agreement shall become
due and payable. In the event of Roberton's death prior to the payment of all
amounts due under this Agreement, the payments due under this paragraph 3 shall
continue to be paid by the Company to Roberton=s designee, who shall be
designated by Roberton in writing, or, upon Roberton=s failure to designate a
designee in writing, to Roberton's estate.
<PAGE>
4. (a) In consideration of the payments and covenants of the Company
set forth herein (which Roberton acknowledges are in excess of what is owed
him), Roberton, on his own behalf and for his heirs, executors, administrators,
successors, and assigns, hereby releases the Company, its Affiliates, and their
respective present or former predecessors, successors, assigns, directors,
officers, shareholders, agents, employees, and anyone acting for any of them,
from any and all claims of any kind arising in connection with Roberton's
employment by the Company and the termination thereof, including, but not
limited to, claims for breach of or interference with any alleged contract,
wrongful discharge, and any federal, state, or local discrimination laws,
including, without limitation, the Age Discrimination in Employment Act of 1967,
as amended, and claims alleging defamation, intentional infliction of emotional
distress, or any other tort. This waiver and release, however, does not apply to
claims Roberton may have against Citizens Utilities Company arising in
connection with his employment by that company. For the purpose of this
Agreement, "Affiliate" shall mean any company directly or indirectly owned or
controlled by or under common control with the Company; provided, that, for
purposes of this Agreement, CU Capitalcorp and its affiliates shall be deemed to
be an Affiliate.
(b) The Company, its agents, and Affiliates, on their behalf
and on the behalf of their respective assigns, hereby release Roberton and his
heirs, executors, administrators, successors, and assigns from any and all
claims of any kind arising in connection with Roberton's employment with the
Company (including his service as a director) and the termination thereof.
(c) Roberton, on the one hand, and the Company and its
Affiliates, on the other hand, acknowledge that if any fact with respect to any
matter covered by this Agreement is found hereafter to be other than or
different from the facts now believed by Roberton to be true, this Agreement
shall be and remain in effect, notwithstanding such different facts. Both
parties acknowledge that the releases and waivers granted in this Agreement will
not release the Company or Roberton from their respective obligations under this
Agreement, and that the releases and waivers do not waive rights or claims of
Roberton against the Company or the Company against Roberton which may arise
after the date this Agreement is executed. In addition, as a former director and
officer of the Company, Roberton shall be entitled, following termination of his
employment, to indemnification to the fullest extent permitted under the
Company's bylaws and the Delaware General Corporation Law, as amended. Roberton
acknowledges that he has been advised to consult with counsel prior to signing
this Agreement, and that he has been given until August 5, 1996 (which Roberton
acknowledges is at least twenty-one (21) days from the date this Agreement was
first presented to Roberton), to consider whether to accept this Agreement.
5. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The parties agree to submit to the exclusive
jurisdiction of the federal and state courts in the State of New York for any
dispute arising under or relating to this Agreement. The parties further agree
not to commence or continue litigation or other legal proceedings relating to
this Agreement in any forum other than New York, and waives any claim that New
York is an inconvenient forum.
6. Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Company:
L. R. Mitten
Citizens International Management
Services Company
3 High Ridge Park
Stamford, CT 06905
If to Roberton:
Donald K. Roberton
38 Campbell Drive
Stamford, CT 06903
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
<PAGE>
7. This Agreement and other agreements being executed simultaneously
with this Agreement constitute the entire agreement between the parties hereto
with respect to the subjects thereof, and supersede and are in full substitution
for any and all prior understandings or agreements, written or oral, with
respect to Roberton's employment and the other subjects covered in this
Agreement and in those other agreements. Roberton shall not disclose, or permit
any other person to disclose, to the media or to any other person, other than
his immediate family, the negotiations or circumstances leading up to this
Agreement or those other agreements; the terms of this Agreement or those other
agreements; or the termination of Roberton=s employment by the Company. It is
acknowledged and agreed that the Company has the sole and exclusive right to
make (subject to Roberton=s prior review and approval, which approval shall not
unreasonably be withheld) or decline to make any public disclosures concerning
any or all of the foregoing subjects; provided, however, that no information
released by the Company regarding any or all of the foregoing subjects shall in
any way disparage Roberton or his contributions to the Company.
8. This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
9. This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators, and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned by the Company or by Roberton without written consent
of the parties, which shall not unreasonably be withheld.
IN WITNESS WHEREOF, the Company and Roberton have executed this
Agreement as of the date first written above.
HUNGARIAN TELEPHONE AND CABLE CORP.
By: James Morrison
-------------------------------
s/Donald K. Roberton
-------------------------------
DONALD K. ROBERTON
CONSULTING AGREEMENT
Exhibit 10.71
Agreement made this 26 day of July, 1996, between Hungarian
Telephone and Cable Corp. (the "Company"), and Donald K. Roberton
(the "Consultant");
WHEREAS, the Company previously employed the Consultant, and the
Company and the Consultant desire that the Company engage him as a part time
consultant, but only on terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and the Consultant hereby agree as follows:
1. This Agreement shall have a five (5) year term. During such term,
the Consultant shall consult for the Company as an independent contractor. He
shall render such consulting services as the Company may reasonably request,
including (1) preparing and delivering, on or before August 31, 1996, a detailed
report regarding all pending business matters involving or affecting the
Company, including, but not limited to, a description of all discussions held
within the past twelve (12) months with Tele Danmark; MATAV; Alcatel; Jasz-Com,
Rt. (a/k/a Jasztel); MCG, Rt. (a/k/a Monortel); Compagnie General de Eaux; any
official, representative, or agency of the government of the Republic of
Hungary; or any other individual, group, or entity regarding acquisitions,
sales, investments, or other business opportunities for the Company or its
Affiliates; and (2) using his knowledge, experience, and contacts to advise the
Company concerning present and future telecommunication concession opportunities
in Europe, including Hungary and the Czech Republic, and assisting the Company
in pursuing those opportunities. During the term of this Agreement, the
Consultant shall be available to render up to two hundred (200) hours of
services each year, at mutually agreeable times and places. The Consultant shall
obey all policies of the Company and of any company directly or indirectly owned
or controlled by or under common control with the Company (such other companies
being hereinafter referred to collectively as "Affiliates"). The Consultant
shall not be an agent of the Company, and shall not purport to act to bind the
Company. He shall not issue any press releases or otherwise deal with the media
without express prior approval of the Company.
2. (a) For consulting services provided under this Agreement, the
Company shall pay the Consultant the aggregate sum of $333,750.00, payable to
the Consultant in seventy-two (72) equal, consecutive, monthly, non-interest
bearing installments of $4,635.42 each, beginning on August 31, 1996, subject
to applicable tax withholdings. The payments due the Consultant under this
paragraph 2(a) shall be made without defense, offset, or counterclaim; any claim
or defense by the Company for breach of this Agreement to be asserted in a
separate suit. In the event the Company fails to make any payment under this
paragraph 2(a) when due, which failure continues for ten (10) days after written
notice to the Company by the Consultant, then the Company shall be required to
pay interest on the unpaid amount at the rate of one and one half percent (1.5%)
per month for as long as the past due amount remains unpaid, plus a one time
late payment penalty equal to ten percent (10%) of the amount then due. If the
Company fails to make three (3) consecutive payments under this paragraph 2(a),
after appropriate written notice as stated above, the entire balance of the
aggregate payments due under this Agreement shall become due and payable. In the
event of the Consultant's death after the expiration of the term of this
Agreement but prior to the payment of all amounts due under this Agreement, the
payments remaining due under this paragraph 2(a) shall continue to be paid by
the Company to the Consultant=s designee, who shall be designated by the
Consultant in writing, or, upon the Consultant's failure to designate a designee
in writing, to the Consultant's estate.
(b) As an independent contractor, the Consultant will not be
entitled to expense accounts, vacation time, sick leave, fringe benefits,
insurance coverage, or other employment benefits paid by the Company to its
employees.
(c) The Consultant shall be responsible for providing, as
needed, his own office space; arranging his own telephone, secretarial, and
other ordinary office needs; and shall not be entitled to reimbursement for such
expenses. If the Consultant is requested to travel on the Company's business, he
shall be reimbursed for reasonable expenses incurred, but only where approved in
advance by the Company.
3. The Company may terminate the Consultant's engagement at any time
for cause. For purposes of this Agreement, Acause@ shall mean dishonesty, fraud,
or misrepresentation by the Consultant that substantially injures the Company.
The Company must give the Consultant ninety (90) days notice of the Company=s
intention to terminate this Agreement for cause, and the Consultant shall be
entitled during such period to cure or correct his alleged deficiencies.
<PAGE>
4. The Consultant shall not divulge or communicate to any person
(except in performing his duties under this Agreement) or use for his own
purposes trade secrets, confidential commercial information, or any other
information, knowledge, or data of the Company or Affiliates (whether acquired
as an employee, director, or officer of the Company, as a consultant hereunder,
or otherwise) which are not generally known to the public, and shall use his
best efforts to prevent the publication or disclosure by any other person of any
such secret, information, knowledge, or data. All documents and objects made,
compiled, received, held, or used by the Consultant while engaged by the Company
in connection with the business of the Company shall be and remain the Company's
property and shall be delivered by the Consultant to the Company upon the
termination of the Consultant's engagement or at any earlier time requested by
the Company.
5. The Consultant hereby agrees that any and all improvements,
inventions, discoveries, formulae, processes, methods, know-how, confidential
data, trade secrets, and other proprietary information (collectively, "Work
Product") within the scope of any business of the Company or any Affiliate which
the Consultant may conceive, make, or have conceived or made during his
engagement with the Company shall be and are the sole and exclusive property of
the Company, and that the Consultant shall, whenever requested to do so by the
Company and without the payment of any additional compensation, at the Company's
expense, execute and sign any and all applications, assignments or other
instruments and do all other things that the Company may deem necessary or
appropriate (i) in order to apply for, obtain, maintain, enforce, or defend
patents of the United States or any foreign country for any Work Product, or
(ii) in order to assign, transfer, convey, or otherwise make available to the
Company the sole and exclusive right, title, and interest in and to any Work
Product.
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The Consultant agrees to submit to the
exclusive jurisdiction of the federal and state courts in the State of New York
for any dispute arising under or relating to this Agreement. He further agrees
not to commence or continue litigation or other legal proceedings relating to
this Agreement in any forum other than New York, and waives any claim that New
York is an inconvenient forum.
7. Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Company:
L. R. Mitten
Citizens International Management
Services Company
3 High Ridge Park
Stamford, CT 06905
If to the Consultant:
Donald K. Roberton
38 Campbell Drive
Stamford, CT 06903
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
8. This Agreement and other agreements being executed simultaneously
with this Agreement constitute the entire agreement between the parties hereto
with respect to the subjects thereof, and supersede and are in full substitution
for any and all prior understandings or agreements, written or oral, with
respect to the Consultant=s employment and the other subjects covered in this
Agreement and in those other agreements. The Consultant shall not disclose, or
permit any other person to disclose, to the media or to any other person, other
than his immediate family, the negotiations or circumstances leading up to this
Agreement or those other agreements; the terms of this Agreement or those other
agreements; or the termination of the Consultant=s employment by the Company. It
is acknowledged and agreed that the Company has the sole and exclusive right to
make (subject to the Consultant=s prior review and approval, which approval
shall not unreasonably be withheld) or decline to make any public disclosures
concerning any or all of the foregoing subjects; provided, however, that no
information released by the Company regarding any or all of the foregoing
subjects shall in any way disparage the Consultant or his contributions to the
Company.
9. This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
<PAGE>
10. This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned, subcontracted or delegated by the Company (except to
an Affiliate) or by the Consultant.
11. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the Company and the Consultant have
executed this Agreement as of the date first written above.
HUNGARIAN TELEPHONE AND CABLE CORP.
By: James Morrison
------------------------------
s/Donald K. Roberton
------------------------------
DONALD K. ROBERTON
NONCOMPETITION AGREEMENT
Exhibit 10.72
Agreement made this 26 day of July, 1996, between Hungarian
Telephone and Cable Corp. (the "Company"), and Donald K. Roberton ("Roberton");
WHEREAS, the Company previously employed Roberton, and is now engaging
Roberton as an independent consultant, and the Company and Roberton wish to
define certain mutually agreed noncompetition covenants which Roberton will
adhere to, and to provide adequate compensation to Roberton in consideration of
his entering into such covenants; and
WHEREAS, in the course of such employment relationship, Roberton
obtained extensive and sensitive confidential information concerning the
Company's business and its present and future prospects, and which information,
if available to a competitor of the Company, could cause serious competitive
damage to the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and Roberton hereby agree as follows:
1. (a) This Agreement shall have a six (6) year term. During the term
of this Agreement, the Company shall pay Roberton the aggregate sum of
$778,750.00, payable to Roberton in seventy-two (72) equal, consecutive,
monthly, non-interest bearing installments of $10,815.97 each, beginning on
August 31, 1996, subject to applicable tax withholdings. The payments due
Roberton under this paragraph 1(a) shall be made without defense, offset, or
counterclaim; any claim or defense by the Company for breach of this Agreement
to be asserted according to the procedures set forth in paragraphs 1(b), 2, or 5
below. In the event the Company fails to make any payment under this paragraph
1(a) when due, which failure continues for ten (10) days after written notice to
the Company by Roberton, then the Company shall be required to pay interest on
the unpaid amount at the rate of one and one half percent (1.5%) per month for
as long as the past due amount remains unpaid, plus a one time late payment
penalty equal to ten percent (10%) of the amount then due. If the Company fails
to make three (3) consecutive payments under this paragraph 1(a), after
appropriate written notice as stated above, the entire balance of the aggregate
payments due under this Agreement shall become due and payable. In the event of
Roberton=s death prior to the payment of all amounts due under this Agreement,
the payments due under this paragraph 1(a) shall continue to be paid by the
Company to Roberton's designee, who shall be designated by Roberton in writing,
or, upon Roberton's failure to designate a designee in writing, to Roberton=s
estate.
(b) If any dispute arises between the Company and Roberton
regarding Roberton's compliance with the terms of this Agreement, and the
parties are unable to resolve such dispute to their mutual satisfaction, the
dispute shall be submitted to binding arbitration, by a single arbitrator,
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association; provided, however, that while the arbitration is pending, the
Company shall continue to make all payments due Roberton under this Agreement.
The arbitrator to preside at the arbitration shall be designated within ten (10)
days of the demand for arbitration, and the arbitration hearing shall be
commenced within thirty (30) days of the designation of an arbitrator. The
arbitration hearing shall be held at a location to be designated by the
arbitrator within New York, New York, unless an alternative location is agreed
to by the parties. The arbitrator shall control the scheduling (so as to process
the matter expeditiously) and any discovery; provided, however, that the
arbitrator must render a decision in each matter submitted for arbitration
within sixty (60) days of the demand for arbitration. All times specified in
this paragraph 1(b) may be extended upon mutual agreement of the parties;
provided, however, that no such extension shall adversely affect the claims of
or damages awardable to the Company through the arbitration. If the arbitrator
decides that Roberton=s actions violate or otherwise do not comply with his
obligations under this Agreement, the arbitrator must order Roberton to
immediately cease and desist engaging in such actions. Damages caused by
Roberton=s actions may also be assessed by the arbitrator, but only for the
period from the date the Company first advised Roberton of its dispute to the
date on which Roberton brings his actions into full compliance with the
arbitrator=s decision; provided, however, that in no case shall the amount of
damages assessed by the arbitrator exceed the total amount of payments due
Roberton under this Agreement for the period to which the damages apply. The
fees and expenses of each arbitration procedure, including the fees of the
arbitrator, shall be shared equally by the parties to the arbitration; however,
the non-prevailing party in each arbitration shall be required to reimburse the
reasonable, non-shared costs of the prevailing party, except for the prevailing
party's attorneys fees and related costs.
<PAGE>
2. Roberton agrees that for a period of six (6) years from the date of
this Agreement he will not, directly or indirectly, whether or not for
compensation and whether or not as an employee or independent contractor, be
engaged in or have any financial interest in any business competing with or
which may compete with the business of the Company (or with any business of any
Affiliate) within the Republic of Hungary and bordering countries. For the
purpose of this Agreement, Roberton shall be deemed to be engaged in or to have
a financial interest in such a business if he is an employee, officer, director,
or partner of any person, partnership, corporation, trust, or other entity which
is engaged in such a business; if he directly or indirectly performs services
for such entity; or if he or any member of his immediate family beneficially
owns an equity interest, or interest convertible into equity, in any such
entity; provided, however, that the foregoing shall not prohibit Roberton or a
member of his immediate family from owning, for the purpose of passive
investment, less than five percent (5%) of any class of securities of a publicly
held corporation; and, further provided, that the foregoing shall not prohibit
Roberton or a member of his immediate family from owning a financial interest in
or from serving as a director, officer, employee, consultant, or advisor to
Hungarian Teleconstruct Corp., or its successor, for the limited purpose of
developing, promoting, or managing an Internet access business within any part
of Europe. Roberton recognizes that a breach or threatened breach by him of his
obligations under this paragraph 2 would cause irreparable injury to the
Company, and the Company shall be entitled to preliminary and permanent
injunctions enjoining him from violating this paragraph 2, in addition to any
other remedies which may be available. For the purpose of this Agreement, the
business of the Company and of its Affiliates shall be deemed to be the
telecommunications and cable television businesses. The term "Affiliate" shall
mean any company directly or indirectly owned or controlled by or under common
control with the Company.
3. Roberton acknowledges that: (i) in the course of his employment by
the Company he obtained extensive access to the Company's trade secrets and
confidential commercial information; (ii) the duration and geographic scope of
this Agreement are reasonably necessary to protect the Company's legitimate
commercial interests; (iii) that the restrictions contained herein will not
unreasonably impair his ability to earn a living; and (iv) that if he violates
the restrictions in this Agreement the Company will suffer irreparable injury.
4. Roberton agrees that he will not solicit for employment any of the
current employees of the Company, and further agrees that neither he nor any
entity with which he is affiliated will employ any person for a period of three
(3) months following that person=s resignation from the Company or Affiliates.
5. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. Roberton agrees to submit to the exclusive
jurisdiction of the federal and state courts in the State of New York for any
dispute arising under or relating to this Agreement, except those subject to the
arbitration procedures set forth in paragraph 1(b). Roberton further agrees not
to commence or continue litigation or other legal proceedings relating to this
Agreement in any forum other than New York, and waives any claim that New York
is an inconvenient forum.
6. Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Company:
L. R. Mitten
Citizens International Management
Services Company
3 High Ridge Park
Stamford, CT 06905
If to Roberton:
Donald K. Roberton
38 Campbell Drive
Stamford, CT 06903
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
<PAGE>
7. This Agreement and other agreements being executed simultaneously
with this Agreement constitute the entire agreement between the parties hereto
with respect to the subjects thereof, and supersede and are in full substitution
for any and all prior understandings or agreements, written or oral, with
respect to Roberton's employment and the other subjects covered in this
Agreement and in those other agreements. Roberton shall not disclose, or permit
any other person to disclose, to the media or to any other person, other than
his immediate family, the negotiations or circumstances leading up to this
Agreement or those other agreements; the terms of this Agreement or those other
agreements; or the termination of Roberton=s employment by the Company. It is
acknowledged and agreed that the Company has the sole and exclusive right to
make (subject to Roberton=s prior review and approval, which approval shall not
unreasonably be withheld) or decline to make any public disclosures concerning
any or all of the foregoing subjects; provided, however, that no information
released by the Company regarding any or all of the foregoing subjects shall in
any way disparage Roberton or his contributions to the Company.
8. This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
9. This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators, and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned by the Company (except to an Affiliate) or by
Roberton.
10. If any provision of this Agreement, or portion thereof, is so
broad, in scope or duration, so as to be unenforceable, such provision or
portion thereof shall be interpreted to be only so broad as is enforceable.
11. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the Company and Roberton have executed this
Agreement as of the date first written above.
HUNGARIAN TELEPHONE AND CABLE CORP.
By:James Morrison
--------------------------------
s/Donald K. Roberton
--------------------------------
DONALD K. ROBERTON
IRREVOCABLE PROXY
I hereby irrevocably appoint Ronald E. Spears, on behalf of
Hungarian Telephone and Cable Corp. ("HTCC"), and HTCC, and each of them, with
full power of substitution, delegation or designation, and, in case of
substitution, delegation, or designation, such substitute(s), delegate(s) or
designee(s), as attorneys and agents for me and, in my name, place and stead, to
vote as my proxy at meetings of the stockholders of HTCC upon any proposal which
may be brought before such meetings, including the election of Directors, and to
consent to any proposal which may be presented for approval by written consent
in lieu of meetings, in the same manner and extent, and to exercise all other
powers that I might have, were I personally present.
I mandate my proxy to exercise, at its and his discretion, at
any meeting of the stockholders of HTCC, or by written consent in lieu of
meetings, all of the voting rights attached to all shares I own, hold or have
the right or power to vote in the capital stock of HTCC (all of the shares I
currently own, hold or have the right or power to vote as of the date hereof,
plus all such shares or voting rights I may acquire, hold or have hereafter
being the "Shares") and to vote such Shares in its and his discretion with
respect to any proposal that may come before meetings or be presented for
approval by written consent.
This proxy shall be effective and irrevocable for six years
from the date hereof. This proxy shall remain in full force and effect and be
enforceable against any donee, transferee or assignee of any of my Shares
(except for a purchaser who acquires such Shares on a publicly traded exchange).
I hereby revoke any and all proxies and voting instructions with respect to any
of my Shares previously given, and I agree that I will not, nor will I permit
any entity under my control, or any donee, transferee or assignee to, deposit
any of my Shares in a voting trust or subject any of my Shares to any
arrangement with respect to the voting of my Shares inconsistent with this
proxy.
This proxy is given in connection with the Termination and
Release Agreement, the Consulting Agreement and the Noncompetition Agreement,
each between the undersigned and HTCC, the Letter of Credit opened by HTCC with
Citibank, N.A., and the Guaranty executed by CU CapitalCorp., each dated the
date hereof. By this proxy I hereby undertake to do all acts necessary and to
sign all documents which may be necessary or useful to give effect to this proxy
and to the actions taken pursuant hereto or at any annual or special meeting of
shareholders of HTCC or pursuant to any request for written consent.
Dated: July 26, 1996.
-----------------------------
Donald K. Roberton
Exhibit 99.4
HUNGARIAN TELEPHONE AND CABLE CORP.
FOR IMMEDIATE RELEASE
Contact: Brigid M. Smith
203.329.5042
[email protected]
FOUNDERS OF HUNGARIAN TELEPHONE AND CABLE CORP. STEP DOWN
THE COMPANY APPOINTS JAMES G. MORRISON AS C.E.O.
MR. MORRISON, WILLIAM E. STARKEY, WARREN B. FRENCH, JR.
AND DAVID A. FINLEY ELECTED AS DIRECTORS
New York, NY - July 29, 1996. Hungarian Telephone and Cable Corp.
(AMEX:HTC) announced today that, in connection with the transfer of all senior
management activities of the company from the U.S. to Hungary, Robert Genova,
Chairman of the Board, Donald K. Roberton, Vice Chairman of the Board, and Frank
R. Cohen, Chief Financial Officer, Secretary and Treasurer, have resigned as
officers and directors of the Company. Messrs. Genova, Cohen and Roberton will
continue to serve the Company as consultants. These arrangements will allow them
freedom to devote their time to the affairs of Hungarian Teleconstruct Corp.
(NASDAQ:HTEL), which they also currently serve as officers and directors and
which plans to enter into the Internet business in Central Europe.
The Company also announced that, in connection with the transfer of its
management activities in Hungary, James G. Morrison has been elected as
President and Chief Executive Officer and a director of the Company. Mr.
Morrison has served as Vice President and Chief Operating Officer of the Company
in its Budapest office since the end of last year. Before joining the Company he
was General Manager and Chief Executive Officer of Anchorage Telephone Utility.
The Company also announced the election as directors of William E.
Starkey, a former senior executive with GTE Corporation with 36 years of
experience in telecommunications, Warren B. French, Jr., former chairman of
Shenendoah Telephone Company and past chairman of the U.S. Telephone
Association, and David A. Finley, former IBM treasurer with over 20 years of
experience with that company.
Citizens International Management Services Company will continue its
role as provider of management services under its management service agreement
with the Company. Citizens International Management Services Company is a wholly
owned subsidiary of Citizens Utilities Company, the largest shareholder of the
Company.
In March 1996, Citibank provided a $75 million bridge loan to the
Company. The Company said that it is proceeding with its previously announced
permanent debt financing, which it anticipates closing in the Fall.
Hungarian Telephone and Cable Corp. is a rapidly growing provider of
telephoneservices in five concession areas in Hungary, currently serving
approximately 75,000 customers within its service territories.
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