Exhibit 10.1


 


ADELPHIA COMMUNICATIONS CORPORATION

KEY EMPLOYEE CONTINUITY PROGRAM


 


1.                                      APPLICABILITY


 


The Adelphia Communications Corporation Key Employee Continuity Program
(the “Program”) applies to those eligible employees of Adelphia Communications
Corporation, a Delaware corporation (the “Company”) and those of its affiliates
that are debtors and debtors in possession under chapter 11 of title 11 of the
United States Code whose cases (collectively, the “Chapter 11 Case”) are
jointly administered under case number 02-41729 (REG) (each, a “Debtor”, and
collectively, the “Debtors” or “Adelphia”), and who are selected to participate
in accordance with Section 3 of this Program.


 


2.                                      PURPOSE
AND EFFECTIVE DATE


 


(a)                                  The
purpose of this Program is to encourage “Participants” (as defined in
Section 3) to continue their employment with the Debtors during the period
of the Chapter 11 Case by establishing a program governing the circumstances
under which a Participant will be eligible to receive a stay bonus (the “Bonus”,
and collectively, the “Bonuses”) in connection with the Participant’s continued
employment through the “Payment Date” (as defined below).


 


(b)                                 The
Program is adopted and effective as of September 21, 2004 (the “Effective
Date”), in accordance with an order issued by the United States Bankruptcy
Court for the Southern District of New York (the “Bankruptcy Court”), such
court having jurisdiction over the Chapter 11 Case.


 


3.                                      ELIGIBILITY
AND AMOUNT OF BONUSES


 


Those employees of the Debtors who have received written notice from
the “Program Administrator” (as defined below) that they have been selected for
coverage under the Program shall be eligible to participate in the Program
(each a “Participant”).  Such notice
shall set forth the amount of each Participant’s Bonus and shall be distributed
as soon as practicable following the Effective Date.  The date of such notice shall be referred to
as the “Participation Date.”


 


4.                                      PAYMENT
OF BONUS


 


(a)                                  Subject
to Section 5 below, unless otherwise agreed between the Company and a
Participant, the Bonuses shall be payable in one lump sum payment, on the
payroll date immediately following the nine (9) month anniversary of the
Participation Date (the “Payment Date”); provided, the Participant is
employed by a Debtor (or such Debtor’s successor) on the Payment Date; and


 


(b)                                 Subject
to Section 5 below, any Bonus amounts that become payable following either
(i) the Emergence Date or (ii) a Change in Control, shall not be affected by
such event and shall remain payable in accordance with this Section 4 of
the Program.


 
















 


5.                                      TERMINATION
OF EMPLOYMENT


 


(a)                                  Notwithstanding
anything contained herein to the contrary, in the event a Participant’s
employment is terminated for one of the following reasons: (i) at any time from
the Participation Date through the Payment Date, as a result of death or
“Disability” (as defined in the Company’s long term disability insurance plan),
(ii) at any time from the Participation Date through the Payment Date, by a
Debtor (or such Debtor’s successor in the event of a Change in Control) without
“Cause” (as defined below), or (iii) following a Change in Control but prior to
or on the Payment Date, by the Participant for “Good Reason” (as defined
below), such Participant (or his/her beneficiary in the event of death) shall
be entitled to receive his/her Bonus if the Chief Executive Officer of the
Company (“CEO”), in his sole discretion, determines that such Participant is
entitled to receive such amounts.


 


(b)                                 In
the event a Participant voluntarily terminates employment with a Debtor, or
his/her employment is terminated for any reason other than the reasons set
forth in Section 5(a) above, prior to the Payment Date, such Participant
shall be ineligible to receive his/her Bonus or any other benefit under this
Program.


 


(c)                                  Notwithstanding
anything contained herein to the contrary, a Participant may be required to
execute an agreement releasing any and all claims the Participant may have
against, among others, the Debtors or their current or former shareholders,
officers, employees or directors, each of the foregoing in their capacity as
such, (the “Release”) and any applicable revocation period set forth in the
Release must have expired, before he/she will receive payment of his/her Bonus.


 


(d)                                 Notwithstanding
anything contained herein to the contrary, the obligation of the Debtors to a
Participant to make any payments under this Program shall cease and the
Participant agrees to pay to the Debtors, upon written demand of the Company,
in a single cash, lump sum, the net after-tax amounts received under this
Program, if either of the following occur: (i) the Participant breaches any
restrictive covenant that he/she is bound to pursuant to any agreement with one
or more of the Debtors, or an employee benefit plan of one or more of the
Debtors, or (ii) the Participant discloses his/her status as a Participant in,
or right to receive a benefit under, this Program, or any of the terms and
conditions of the Program, unless legally required to disclose such information,
to any person other than his/her spouse and/or attorney, provided such spouse
and attorney shall also be bound by this confidentiality requirement.


 


6.                                       DEFINITIONS.  For purposes of this Program, the
following definitions shall apply:


 


(a)                                  “Bankruptcy
Plan” shall mean the plan or plans of reorganization involving the Company in
connection with its Chapter 11 Case.


 


(b)                                 “Board”
shall mean the board of directors of the Company.


 


(c)                                  “Cause”
shall have the meaning set forth in any employment agreement a Participant has
entered into with a Debtor; provided, however, that if a
Participant is not party to such an employment agreement, “Cause” shall mean:
(i) a Participant’s refusal or repeated failure to perform the duties assigned
to him or her; (ii) any act by the Participant that has the effect of injuring
the reputation or business of the Debtor for which the Participant is employed;


 
















 


(iii) the conviction by the employee of a felony; (iv)
any violation by the Participant of the rules, regulations or policies of the
Debtor for which the Participant is employed; (v) theft by the Participant; or
(vi) commission by the Participant of an act of gross misconduct, fraud or
embezzlement.


 


(d)                                 “Change
in Control” shall mean the occurrence
of any of the following events, whether on, before or following the Emergence
Date, in each case pursuant to the terms of a definitive written agreement with
one or more of the Debtors entered into on or prior to the Emergence Date:


 


(i)                                     Consummation
of an acquisition on or after the Emergence Date by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a “Person”))
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of either (A) the then-outstanding shares of
common stock of the Company issued pursuant to the Bankruptcy Plan (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Company issued pursuant to the
Bankruptcy Plan entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); or


 


(ii)                                  Consummation
of a merger, consolidation or similar corporate transaction involving the
Company or all or substantially all of its subsidiaries or a sale or other
disposition of all or substantially all of the consolidated assets of the
Company  or all or substantially all of its
subsidiaries  in one or more transactions (each,
a “Business Combination”); provided, however, a Business Combination shall not
constitute a Change in Control if all of the following conditions are met:  (A) the beneficial owners of the Outstanding
Company Stock and the Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more
than 50% of the then-outstanding shares of common stock and the combined voting
power of the then-outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting
from such Business Combination (including, without limitation, a corporation
that, as a result of such transaction, owns the Company or all or substantially
all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination, (B) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more of
the then-outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then-outstanding
voting securities of such corporation, except to the extent that such ownership
existed prior to the Business Combination, and (C) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Board at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
Combination; or


 


(iii)                               Consummation
of a sale or other disposition to a Person that is not an affiliate of the
Company of a “strategic cluster”, a specific division or business unit of the
Company or other Debtor for which a Participant primarily performs his/her
services that is not


 
















 


described in clause (ii) of this Section 6(d);
provided, that “strategic
cluster” shall mean the cable systems operated by the Company or other Debtors
in the following geographic locations: (I) Northern New England/Eastern
New York, (II) Cleveland/Greater Ohio Valley, (III) Florida/Southeast, (IV)
California/Western, (V) Virginia/Maryland/Colorado Springs/Kentucky, (VI)
Pennsylvania, and (VII) Western New York/Connecticut; provided, further, that
no Change in Control shall be deemed to have occurred for purposes of this
Program unless the Participant eligible to receive a Bonus has primarily
performed his/her services for the strategic cluster, specific division or
business unit that was involved in such sale or other disposition, as
determined by the Program Administrator.


 


(e)                                  “Emergence
Date” shall mean the date on which the Bankruptcy Plan becomes effective in
accordance with its terms.


 


(f)                                    “Good
Reason” shall have the meaning set forth in any employment agreement a
Participant has entered into with a Debtor; provided, however,
that if a Participant is not party to such an employment agreement, “Good
Reason” shall mean the occurrence of any of the following events, without the
Participant’s express written consent:


 


(i)                                  there
is a material reduction in Participant’s base salary or target incentive bonus;


 


(ii)                               there
is a diminution of the Participant’s duties;


 


(iii)                            the
Participant is demoted or removed from the position held at the time such grant
was made; or,


 


(iv)                           the
Participant is relocated to a principal place of employment that is further
from his/her principal place of residence than the greater of (A) 50 miles or
(B) the distance between his/her principal place of residence and his/her
principal place of employment as of the Participation Date.


 


7.                                      GENERAL
PROVISIONS


 


(a)                                  Payments
under this Program shall not constitute wages and shall be paid by one or more
of the Debtors from the general assets of the Debtors; provided that no
director, officer, agent or employee of the Debtors shall be personally liable
in the event the Debtors are unable to make any payments under this Program due
to a lack of, or inability to access, funding or financing, legal prohibition
(including statutory or judicial limitations) or failure to obtain any required
consent.  Notwithstanding anything in
this Program to the contrary, any payments to be made hereunder shall only be
made as and to the extent the Debtors have adequate funding therefor.


 


(b)                                 Payments
under this Program are subject to Federal, state and local income tax withholding
and all other applicable Federal, state and local taxes.  The Debtors shall withhold, or cause to be
withheld, from any payments made hereunder all applicable Federal, state and
local withholding taxes and may require the employee to file any certificate or
other form in connection therewith.


 
















 


(c)                                  Nothing
contained herein shall give any Participant the right to be retained in the
employment of any Debtor, or any successor, or affect the right of the Debtors
to dismiss any Participant at will.


 


(d)                                 This
Program is not a term or condition of any individual’s employment and no
Participant shall have any legal right to payments hereunder except to the
extent all conditions relating to the receipt of such payments have been
satisfied in accordance with the terms of this Program as set forth herein.


 


(e)                                  Nothing
contained herein shall give any Participant any right to any employee benefit
upon termination of employment with any Debtor, except as specifically provided
herein, required by law or provided by the terms of another employee benefit
plan document relating to the treatment of former employees generally.


 


(f)                                    No
person having a benefit under this Program may assign, transfer or in any other
way alienate the benefit, nor shall any benefit under this Program be subject
to garnishment, attachment, execution or levy of any kind.


 


(g)                                 Except
as determined by the Plan Administrator in its sole discretion and except with
respect to benefits provided under the Adelphia Communications Corporation Sale
Bonus Program, effective as of September 21, 2004, receipt of all benefits
under this Program by any Participant shall be (i) in lieu of all other
retention payments of any kind whatsoever due to such Participant under any
other plan or agreement of one or more of the Debtors, including, without
limitation, any benefits payable under any employment agreement between one or
more of the Debtors and the Participant that are specifically identified as a
retention or stay bonus, and (ii) deemed a waiver of a Participant’s rights
with respect to any and all such payments.


 


8.                                      ADMINISTRATION


 


(a)                                  The
Program shall be administered by the CEO. 
In the event the CEO’s employment with the Company terminates, the
Compensation Committee of the Board shall administer the Program.  The term “Program Administrator” shall refer
to the CEO, except as described in the preceding
sentence, in which case the “Program Administrator” shall refer to the
Compensation Committee of the Board or its designee (the “Compensation
Committee”).  For purposes hereof, the
CEO, subject to review and approval by the Compensation Committee, is
authorized to establish the Bonus amounts each Participant will have the
opportunity to earn hereunder, subject to any aggregate amounts available under
the Program.  The CEO may designate the
employees to be covered under the Program upon, and following, the Effective
Date.  In the event a Participant’s
employment has terminated, the CEO may add or substitute Participants to the
Program or reallocate the amount of the Bonus forfeited by a Participant whose
employment has terminated.


 


(b)                                 There
is no requirement that the amount of any award for any eligible employee be
uniform as to particular individuals or as to one or more classes of eligible
employees or Participants.


 


(c)                                  Subject
to the express provisions of this Program, the Program Administrator shall have
sole authority to interpret the Program (including any vague or


 
















 


ambiguous provisions) and to make all other
determinations deemed necessary or advisable for the administration of the
Program.  In addition, the determination
of whether any conduct, action or failure to act on the part of any Participant
constitutes Cause, shall be made by the Program Administrator in its sole
discretion.  All determinations and
interpretations of the Program Administrator shall be final, binding and
conclusive as to all persons.


 


(d)                                 Neither
the Program Administrator nor any employee, officer, agent, or director of any
of the Debtors shall be personally liable by reason of any action taken with
respect to the Program for any mistake of judgment made in good faith, and one
or more of the Debtors shall indemnify and hold harmless each employee, officer
or director of the Debtors, including the Program Administrator, to whom any
duty or power relating to the administration or interpretation of the Program
may be allocated or delegated, against any reasonable cost or expense
(including counsel fees) or liability (including any sum paid in settlement of
a claim with the approval of the Board) arising out of any act or omission to
act in connection with the Program unless arising out of such person’s own
fraud, bad faith or gross negligence.


 


9.                                      APPLICABLE
LAW


 


This Program and all action taken under it shall be governed as to validity,
construction, interpretation and administration by the laws of the State of
Colorado and applicable Federal law.


 


10.                               AMENDMENT
OR TERMINATION


 


The Board may amend, suspend or terminate the Program or any portion
thereof at any time; provided, however, that unless the written consent of a
Participant is obtained, no such amendment or termination shall materially and
adversely affect the rights of such Participant.  During the pendency of the Chapter 11 Case,
no amendment or modification of the Program that materially increases the cost
of the Program to the Debtors shall be adopted without formal authorization
from the Board and thereafter, the Bankruptcy Court, upon notice.


 


IN WITNESS WHEREOF, the Company has caused the Program to be
implemented following Bankruptcy Court approval.


 


 


	
   

  	
  ADELPHIA COMMUNICATIONS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  



 


 





















 


[Adelphia Logo]


	
  William T. Schleyer

  
	
  Chairman and CEO

  
	
   

  



Date


 


Dear
________________:


 


I am pleased
to advise you that the Board of Directors of Adelphia Communications
Corporation and the United States Bankruptcy Court for the Southern District of
New York have approved the implementation of the Adelphia Communications
Corporation Key Employee Continuity Program (the “Program”) and that you have
been selected for coverage under this Program. 
In accordance with the provisions of the Program, this letter will serve
as a written notice of your selection as a Participant.


 


The purpose of
the Program is to encourage you to continue your employment with Adelphia (as
defined in the Program) during the period of the Chapter 11 Case (as defined in
the Program).  By adoption of this
Program, Adelphia wishes to provide you with a bonus (the “Bonus”) if you
remain employed by Adelphia (or a successor) through ______, 2005.


 


Except in the
case of certain termination events provided in Section 5 of the Program, you
are eligible for a total Bonus under the Program equal to $________, provided
you are employed by Adelphia (or a successor) on _______, 2005.  Please carefully review the Program’s
provisions regarding termination of employment as set forth in Section 5(a) of
the Program.


 


Your
participation under the Program is contingent upon satisfactory performance and
you agreeing to be bound by the terms and conditions of the attached Program
document.  Please read this document
carefully, including the confidentiality provisions contained in Section
5(d).  If you wish to be covered by this
Program, please sign and date this letter and return it to Jerry Rybin at 5619
DTC Parkway, Greenwood Village, CO 80111, no later than ___________.


 


By signing
this letter, you acknowledge receipt of a copy of the Program and understand
and agree that your employment with Adelphia will continue to be “at-will,”
that either you or Adelphia may terminate your employment relationship with
Adelphia at any time, and that nothing in the Program is intended to imply or
create any guarantee of employment between you and Adelphia.


Sincerely,


	
   

  	
   

  	
   

  
	
   

  	
  William Schleyer

  	
   

  
	
   

  	
  Chairman and Chief Executive Officer