compensated in a manner to be determined. CCI will reimburse each director for
reasonable out-of-pocket expenses incurred in connection with attending board
and committee meetings.
Officers are appointed by the board of directors and serve at its
Effective as of December 23, 1998, Jerald L. Kent entered into an
employment agreement with Charter Investment for a three-year term with
automatic one-year renewals. Under this agreement, Mr. Kent agrees to serve as
President and Chief Executive Officer of Charter Investment, with responsibility
for the nationwide general management, administration and operation of all
present and future business of Charter Investment and its subsidiaries. During
the initial term of the agreement, Mr. Kent will receive a base salary of
$1,250,000, or such higher rate as may from time to time be determined by the
board of directors in its discretion. In addition, Mr. Kent will be eligible to
receive an annual bonus in an aggregate amount not to exceed $625,000, to be
determined by the board based on an assessment of the performance of Mr. Kent as
well as the achievement of certain financial targets.
Under the agreement, Mr. Kent is entitled to participate in any disability
insurance, pension, or other benefit plan afforded to employees generally or
executives of Charter Investment. Mr. Kent will be reimbursed by Charter
Investment for life insurance premiums up to $30,000 per year. Also under this
agreement and a related agreement, Mr. Kent received options to purchase three
percent (3%) of the net equity value of Charter Holdco. The options have a term
of ten years and vested twenty-five percent (25%) on December 23, 1998. The
remaining seventy-five percent (75%) will vest 1/36 on the first day of each of
36 months commencing on the first day of the thirteenth month following December
Charter Investment agrees to indemnify and hold harmless Mr. Kent to the
maximum extent permitted by law from and against any claims, damages,
liabilities, losses, costs or expenses in connection with or arising out of the
performance by Mr. Kent of his duties.
In the event of the expiration of the agreement in accordance with its
terms as a result of Charter Investment giving Mr. Kent notice of its intention
not to extend the initial term, or a termination of the agreement by Mr. Kent
for good reason or by Charter Investment without cause, (a) Charter Investment
will pay to Mr. Kent an amount equal to the aggregate base salary due to Mr.
Kent and the board shall consider additional amounts, if any, to be paid to Mr.
Kent and (b) any unvested options of Mr. Kent shall immediately vest.
CCI will assume all obligations of Charter Investment under Mr. Kent's
employment agreement except with respect to obligations relating to the grant of
options which will remain obligations of Charter Holdco.
Effective as of December 23, 1998, Barry L. Babcock entered into an
employment agreement with Charter Investment for a one-year term with automatic
one-year renewals. Under this agreement, Mr. Babcock agrees to serve as Vice
Chairman of Charter Investment with responsibilities including the government
and public relations of Charter Investment. During the initial term of the
agreement, Mr. Babcock will receive a base salary of $625,000, or such higher
rate as may be determined by the Chief Executive Officer in his discretion. In
addition, Mr. Babcock will be eligible to receive an annual bonus to be
determined by the board of directors at its discretion. Mr. Babcock received a
one-time payment as part of his employment agreement of $500,000.
Under the agreement, Mr. Babcock is entitled to participate in any
disability insurance, pension or other benefit plan afforded to employees
generally or executives of Charter Investment. Charter Investment agrees to
grant options to Mr. Babcock to purchase its stock as determined by the board of
directors in its discretion, pursuant to an option plan to be adopted by Charter