exv10w18



 



Exhibit 10.18



February 19, 2003


Dear Nick Balletta:


This Letter Agreement will confirm our offer of employment with Video Network
Communications, Inc. (the “Company”) on the following terms and conditions:



	1.	 	Employment. This Letter Agreement will govern the terms and conditions
of your employment commencing on the date hereof (the “Effective
Date”) until your employment is terminated pursuant to paragraph 7 below.
The period during which you are actually employed by the Company is
referred to as the “Employment Period”.
	 
	2.	 	Position; Duties. You will be employed by the Company as its President.
You will report to the Board of Directors of the Company (the “Board”) or
such persons as are designated by the Board, and shall perform the
customary duties of a President and such other duties that may from time
to time be assigned to the you. You agree to use your best efforts to
perform such duties faithfully, to devote all of your working time,
attention and energies to the businesses of the Company, and while you
remain employed, not to engage in any other business activity that is in
conflict with your duties and obligations to the Company.
	 
	3.	 	Base Salary. You will be paid a base salary (“Base Salary”) at an annual
rate of $225,000, payable in accordance with the Company’s normal payroll
practices. Your Base Salary will be reviewed at least annually, and may be
subject to upward adjustment at the discretion of the Board (or a
committee thereof). Your Base Salary shall not be decreased unless there
are proportional decreases in salary imposed on the Company’s executive
employees because the Company’s financial performance dictates such
decreases.
	 
	4.	 	Annual Bonus. In addition to the Base Salary, you shall have the
opportunity to earn an annual bonus for each fiscal year of the Company
that ends during the Employment Period (the “Bonus Award”) of up to 50% of
your Base Salary paid during such year based on achievement of targeted
level of performance, as established in advance by the Board or a
committee thereof. The Board, in its discretion, may award a higher bonus
for any year for performance that exceeds target levels. To the extent
performance goals are based on the achievement of financial targets, the
Board (or a committee thereof) shall determine whether such targets are
satisfied based on the audited consolidated financial statements of the
Company, and the determination by the Board (or a committee thereof) shall
be final and binding. In making such determination, the Board (or a
committee thereof) may make adjustments to the audited numbers or to the
targets themselves to take into account unusual or non-recurring events,
including,



 






 







	 	 	without limitation, acquisitions and divestitures. In connection with
the Bonus Award described above, you and the Company may agree on a bonus
plan based on Company revenue and/or EBITDA to establish targets and
better define your Bonus Award opportunity. Such plan will include a
facility for paying Employee a pro-rata share of any Bonus Award due on a
quarterly basis.
	 
	5.	 	Stock Options. You shall be granted the option to purchase 750,000
shares of VNCI common stock at an exercise price based upon the market
price on the date of issuance pursuant to VNCI’s Stock Option Plan.
	 
	6.	 	Benefits. You will be provided with such retirement benefits, fringe
benefits and insurance coverages as are made available to officers of the
Company generally, except that in lieu of the Company’s standard medical
benefits, the Company will pay the cost of your Cobra coverage during your
employment for a period of eighteen (18) months. In addition, you will be
provided with supplemental disability insurance as mutually agreed by you
and the Company. You shall be entitled to vacation at the rate of three
(3) weeks per year in accordance with the Company’s vacation policy.
	 
	7.	 	Termination.




		
	 	        (a) General. You will be free to resign from the Company at any
time, and the Company will be free to terminate your employment at any
time.




		
	 	        (b) Termination Without Severance Benefits. In the event your
employment with the Company is terminated by reason of (i) your
resignation without “Good Reason” (as defined below), (ii) your death,
(iii) your “Disability” (as defined below), or (iv) your discharge by the
Company for “Cause” (as defined below), this Letter Agreement shall
terminate including, without limitation, the Company’s obligations to
provide any compensation, benefits or severance to you under this Letter
Agreement, other than any amounts earned and payable to you but not yet
paid.




		
	 	        (c) Termination With Severance Benefits. In the event the Company
terminates your employment other than for Cause, or you terminate this
Letter Agreement for Good Reason, then in lieu of any other severance
benefits otherwise payable under any Company policy, or any other damages
payable in connection with such termination, you will receive those
severance benefits to which you are entitled under the Williams
Communications Group, Inc. Change in Control Severance Protection Plan 2,
as Amended and Restated on April 18, 2002 (the “Plan”), provided,
however, that the amount of severance payable to you under the Plan shall
be capped at a maximum of 52 weeks benefit. Notwithstanding Section 3.02
of the Plan, you shall remain eligible for participation in the Plan with
regard to severance for so long as you are employed by the Company. No
other term or clause in the Plan, other than the clause



 






 








		
	 	regarding the calculation and payment schedule of the amount of any
severance benefits, shall apply, and the provisions of this Letter
Agreement shall control instead.




		
	 	        (d) Compliance and Release. Your right to the payments in paragraph
7(c) hereof shall be conditional upon (i) your continuing compliance with
the restrictive covenants and provisions contained in paragraph 8, and
(ii) your execution of a customary and reasonable release of claims in
favor of the Company and its Affiliates, in a form prescribed by the
Company.




		
	 	        (e) Liquidated Damages. The Company and you hereby stipulate that
the damages which may be incurred by you as a consequence of any
termination of employment are not capable of accurate measurement as of
the date first written above and that the liquidated damages payments
provided for in this Letter Agreement constitute a reasonable estimate
under the circumstances of and are in full satisfaction of, all damages
sustained as a consequence of any termination of employment.




		
	 	        (f) Definition of “Cause”. For purposes of this Letter Agreement,
“Cause” means an omission, act or action or series of omissions, acts or
actions by you which, in the determination of the Company, constitute(s),
cause(s) or result(s) in (i) your material dishonesty including, without
limitation, theft, fraud, embezzlement, financial misrepresentation or
other similar behavior or action in your dealings with or with respect to
the Company or any Affiliate thereof or entity with which the Company or
any Affiliate thereof, shall be engaged in or be attempting to engage in
commerce; (ii) your conviction for, or the your entry of a plea of guilty
or nolo contendere to, the commission of a felony; (iii) your willful
refusal to follow the lawful directives of the Company with respect to
your duties hereunder, which directives shall be consistent with your
duties and position as an officer of the Company, as set forth in this
Letter Agreement, and which refusal is not cured by you within thirty
(30) calendar days after written notice from the Board to you setting
forth with reasonable specificity the nature thereof; or (iv) the
material breach of any provision of this Letter Agreement which is not
cured by you within thirty (30) calendar days after written notice from
the Company to you setting forth with reasonable specificity the nature
of such breach. For purposes of this Letter Agreement, “Affiliate” shall
have the meaning assigned to it in the Stockholders Agreement, dated as
of May 16, 2002, by and among VNCI, Moneyline Telerate Holdings and the
other signatories thereto (the “Stockholders Agreement”).




		
	 	        (g) Definition of “Good Reason”. For purposes of this Letter
Agreement, “Good Reason” may only be claimed by you following a “Sale of
the Company,” and means either (i) the assignment to you, without your
written approval, of duties or responsibilities materially inconsistent
with your position as President, (ii) any material reduction in your
duties, responsibilities or authority from those in effect on the date
hereof, or (iii) a demand by the Company to relocate your principal
place of employment to a location greater than fifty (50)



 






 








		
	 	miles from your current principal place of employment; provided,
however, that the occurrence of any of (i), (ii) or (iii) shall not
constitute Good Reason unless written notice from you to the Board
setting forth with reasonable specificity the nature of such assignment
or reduction is given within 60 calendar days after the date on which
such assignment, reduction, or change in location first occurs and such
assignment or reduction is not cured or otherwise mutually resolved
within 30 calendar days after such written notice is delivered to the
Board. For purposes of this Letter Agreement, “Sale of the Company”
shall mean a change in control of VNCI exceeding 50% of the voting
rights of the Company.




		
	 	        (h) Definition of “Disability”. For purposes of this Letter
Agreement, “Disability” means any physical or mental condition which
renders you incapable of performing your essential functions and duties
hereunder for a period of 90 consecutive days or any 90 days within a
period of 180 consecutive days, as determined in good faith by the
Company.




	8.	 	Restrictive Covenants.




		
	 	        (a) Confidential Information. You acknowledge and agree that the
information, observations, and data obtained by you while employed by the
Company or any of its subsidiaries or any of its Affiliates concerning
the business affairs of the Company or any subsidiary or Affiliate of the
Company (“Confidential Information”) are the property of the Company,
such subsidiary or such Affiliate. Consequently, you agree that, except
to the extent required by applicable law, statute, ordinance, rule,
regulation or orders of courts or regulatory authorities, you shall not
at any time (whether during or after the Employment Period) disclose to
any unauthorized person or use for your own account any Confidential
Information without the prior written consent of the Board, unless and to
the extent that the aforementioned matters become generally known to and
available for use by the public other than as a result of your acts or
omissions to act or as required by law. You shall deliver to the Company
at the termination of your employment, or at any other time the Company
may request, all memoranda, notes, plans, records, reports, computer
tapes and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined below)
and the business of the Company or any subsidiary or Affiliate of the
Company which you may then possess or have under your control.




		
	 	        (b) Inventions and Patents. You agree that all inventions,
innovations, improvements, developments, methods, designs, analyses,
drawings, reports, and all similar or related information which relates
to the Company’s or any of its subsidiaries’ or Affiliates’ actual or
anticipated business, research and development or existing or future
products or services and which are conceived, developed or made by you
prior to the date hereof or while employed by the Company or any of its
subsidiaries or Affiliates (“Work Product”) belong to the Company or such
subsidiary or Affiliate. You will promptly disclose such Work Product to
the Board or its designee and perform all actions reasonably requested



 






 








		
	 	by the Board or its designee (whether during or after the Employment
Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other
instruments).




		
	 	        (c) Non-competition. You acknowledge that in the course of your
employment with the Company and its subsidiaries and Affiliates you have
become familiar, and you will become familiar, with the Company’s and its
subsidiaries’ and Affiliates’ trade secrets and with other Confidential
Information and that your services have been and will be of special,
unique and extraordinary value to the Company and its subsidiaries and
Affiliates. Therefore, you agree that unless you are terminated by the
Company without Cause, or you terminate your employment with the Company
for Good Reason, you shall not, during the Restricted Period, directly or
indirectly own, operate, manage, control, participate in, consult with,
advise, engage in services for any competitor of the Company, its
subsidiaries or Affiliates, or in any manner engage in any start up of a
business (including by yourself or in association with any person, firm,
corporate or other business organization or through any other entity) in
competition with the businesses of the Company or its subsidiaries or
Affiliates as in existence or in process on the date of termination of
your employment (the “Businesses”). Nothing herein shall prohibit you
from being a passive owner of not more than 2% of the outstanding stock
or equity of an entity which is publicly traded, so long as you have no
active participation in the business of such entity. For purposes of
this paragraph 8, the Restricted Period means the period during which you
are employed by the Company or any of its subsidiaries and the 12-month
period following such termination.




		
	 	        (d) Non-solicitation. During the Restricted Period, you shall not
directly, or indirectly through another person or entity use proprietary
knowledge or information relating to the Company, its subsidiaries or its
Affiliates obtained during the course of your employment with the Company
with the intention to, or which a reasonable person would construe to (i)
induce or attempt to induce any employee of the Company or any of its
subsidiaries or Affiliates to leave the employ of the Company or such
subsidiary or Affiliate, or in any way interfere with the relationship
between the Company or any of its subsidiaries and Affiliates and any
employee thereat, including, without limitation, inducing or attempting
to induce any union, employee or group of employees to interfere with the
Business or operations of the Company or its subsidiaries or Affiliates,
(ii) hire any person who was an employee of the Company or any subsidiary
or Affiliate of the Company at any time within the six-month period prior
to the date you employ or seek to employ such person, or (iii) induce or
attempt to induce any customer, supplier, distributor, franchisee,
licensee or other business relation of the Company or any subsidiary or
Affiliate of the Company to cease doing business with the Company or such
subsidiary or Affiliate, or in any way interfere with the relationship
between any such customer, supplier, distributor, franchisee, licensee or
business relation and the Company or any subsidiary or Affiliate of the
Company.



 






 








		
	 	        (e) Non-disparagement. You shall not at any time during or after
the Employment Period whether in writing or orally, criticize, disparage,
or otherwise demean in any way the Company or its subsidiaries or
Affiliates or their respective products, officers, directors, employees
or shareholders.




		
	 	        (f) Future Cooperation. You agree that upon the Company’s
reasonable request following your termination of employment, you will use
reasonable efforts to assist and cooperate with the Company in connection
with the defense or prosecution of any claim that may be made against or
by the Company or its Affiliates, or in connection with any ongoing or
future investigation or dispute or claim of any kind involving the
Company or its Affiliates, including any proceeding before any arbitral,
administrative, regulatory, self-regulatory, judicial, legislative, or
other body or agency. You will be entitled only to reimbursement for
reasonable out-of-pocket expenses (including travel expenses) incurred in
connection with providing such assistance.




		
	 	        (g) Enforcement. You agree that: (i) the covenants set forth in
this paragraph 8 are reasonable in all respects, including, where
applicable, geographical and temporal scope, and (ii) the Company would
not have entered into this Letter Agreement but for your covenants
contained herein, and (iii) the covenants contained herein have been made
in order to induce the Company to enter into this Letter Agreement. If,
at the time of enforcement of this paragraph 8, a court shall hold that
the duration, scope or area restrictions stated herein are unreasonable
under circumstances then existing, the parties agree that the maximum
duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court
shall be allowed to revise the restrictions contained herein to cover the
maximum period, scope and area permitted by law. You recognize and
affirm that in the event of your breach of any provision of this
paragraph 8, money damages would be inadequate and the Company would have
no adequate remedy at law. Accordingly, you agree that in the event of a
breach or a threatened breach by you of any of the provisions of this
paragraph 8, the Company, in addition and supplementary to other rights
and remedies granted by law existing in its favor (including recovery of
damages and costs (including reasonable attorneys’ fees)), may apply to
any court of law or equity of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions hereof (without posting a bond
or other security).




	9.	 	Insurance and Indemnification.




		
	 	        (a) D&O Insurance. The Company shall cause you to be covered by and
named as an insured under any policy or contract of insurance obtained by
it to insure its directors and officers against personal liability for
acts or omissions in connection with service as an officer or director of
the Company or service in other capacities at its request. Any coverage
provided to you pursuant to this paragraph 9 shall be of the same scope
and on the same terms and conditions as the coverage (if any) provided to
other officers or directors of the Company and



 






 








		
	 	shall continue for so long as you shall be subject to personal
liability relating to such service.




		
	 	        (b) Indemnification. The Company will indemnify and hold you
harmless from and against any and all liabilities, suits, claims,
actions, causes of actions, and debts arising from and in connection with
your employment by the Company and in the performance of your duties for
the Company in accordance with the terms of this Letter Agreement. Such
indemnification shall not apply to any such liabilities, suits, claims,
actions, causes of actions or debts resulting from: (i) any action by you
constituting fraud or criminal conduct, (ii) any action by you which is a
material violation of the terms of this Letter Agreement or in violation
of any written direction given to you, pertaining to any action within
the scope of your duties, by the Board, such persons designated by the
Board or the Company’s Chief Executive Officer, or (iii) any action which
is in violation of any laws, rules or regulations applicable to the
Company and/or the business of the Company, except to the extent such
violation of laws, rules or regulations was unintentional and was
performed by you while acting within the scope of your employment.




	10.	 	Key Man Insurance. During the Employment Period, the Company may at any
time effect insurance on your life and/or health in such amounts and in
such form as the Company may in its sole discretion decide. You will not
have any interest in such insurance, but shall, if the Company requests,
submit to such medical examinations, supply such information and execute
such documents as may be required in connection with, or so as to enable
the Company to effect, such insurance.
	 
	11.	 	Withholding. The Company shall have the right to withhold from any
amount payable to you hereunder an amount necessary in order for the
Company to satisfy any withholding tax obligation it may have under
applicable law.
	 
	12.	 	Governing Law. The terms of this Letter Agreement, and any action
arising thereunder, shall be governed by and construed in accordance with
the domestic laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
	 
	13.	 	Waiver. This Letter Agreement may not be released, changed or modified
in any manner, except by an instrument in writing signed by you and the
Company. The failure of either party to enforce any of the provisions of
this Letter Agreement shall in no way be construed to be a waiver of any
such provision. No waiver of any breach of this Letter Agreement shall be
held to be a waiver of any other or subsequent breach.
	 
	14.	 	Assignment. This Letter Agreement is personal to you. You shall not
assign this Letter Agreement or any of your rights and/or obligations
under this Letter



 






 







	 	 	Agreement to any other person. The Company may, without your consent,
assign this Letter Agreement to any successor to its business.
	 
	15.	 	Dispute Resolution. To benefit mutually from the time and cost savings
of arbitration over the delay and expense of the use of the federal and
state court systems, all disputes involving this Letter Agreement (except,
at the election of the Company, for injunctive relief with respect to
disputes arising out of an alleged breach or threatened breach of the
covenants contained in paragraph 8), including claims of violations of
federal or state discrimination statutes or public policy, shall be
resolved pursuant to binding arbitration in New York, New York. In the
event of a dispute, a written request for arbitration shall be submitted
to the New York office of the American Arbitration Association. The award
of the arbitrators shall be final and binding and judgment upon the award
may be entered in any court having jurisdiction thereof. Except as
otherwise provided above, this procedure shall be the exclusive means of
settling any disputes that may arise under this Letter Agreement. All
fees and expenses of the arbitrators and all other expenses of the
arbitration, except for attorneys’ fees and witness expenses, shall be
shared equally by you and the Company. Each party shall bear its own
witness expenses and attorneys’ fees.
	 
	16.	 	Survival. Notwithstanding anything contained herein to the contrary, the
provisions of paragraphs 8, 9, 12, 15 and 16 shall survive termination of
your employment with the Company and its subsidiaries.
	 
	17.	 	Entire Agreement. This Letter Agreement supersedes all previous and
contemporaneous communications, agreements and understandings, whether
oral or written, between you, on the one hand, and the Company or any of
its Affiliates, on the other hand, and constitutes the sole and entire
agreement between you and the Company pertaining to the subject matter
hereof.
	 
	18.	 	Counterparts. This Letter Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement,
and shall become a binding agreement when one or more counterparts have
been signed by each party and delivered to the other party.



* * * *


 






 


If the foregoing is acceptable to you, kindly sign and return to us one copy of
this letter.



	 	 	 
	 	Sincerely yours,
	 
	 	VNCI
	 
	 	By:	
   /s/ Alexander Russo



Name: Alexander Russo




	 
	AGREED TO AND ACCEPTED BY:
	 
	   /s/ Nicholas Balletta



Nicholas Balletta