Document:

Exhibit 10.1

 

Adelphia
Communications Corporation 

 

2006
Short-Term Incentive Plan

 

1.                                      Purpose

 

The purpose of the Adelphia Communications Corporation 2006 Short-Term
Incentive Plan (the “STIP”) is to attract, retain and motivate highly-qualified
employees by providing appropriate short-term incentive awards that link each
employee’s compensation to the business objectives of Adelphia Communications
Corporation (the “Company”).  By placing
a portion of the employee’s compensation at risk, the Company can reward
performance based on the satisfaction of Company and individual performance
goals.

 

2.                                      Effective
Date

 

The effective date of the STIP is January 1,
2006.  No awards will be granted or paid
under the STIP with respect to any plan year other than the plan year beginning
January 1, 2006 and ending December 31, 2006.

 

3.                                      Eligibility
and Participation

 

a.                                       Except
as provided in Section 3(b), Company employees at the General Manager
level (who lead the operations of a local system or systems) or hold a higher
position or title with the Company are generally eligible to participate in the
STIP.  Employees must be notified in
writing by the Chief Executive Officer or the President of the Company to be
eligible to receive an award under the STIP.

 

b.                                       The
following employees are not eligible to participate in the STIP:

 

i.                                         Employees
on a sales commission plan or sales incentive plan;

 

ii.                                     Temporary,
term and leased employees, contract workers and interns; or

 

iii.                                 Except
with respect to a termination described in Section 5(b), employees not on
the Company payroll on the date that STIP awards are paid.

 

c.                                       Eligible
employees who are on the Company payroll or serving in an eligible position for
only a portion of 2006 or for whom the STIP is effective after January 1, 2006,
will have their STIP award pro-rated to reflect the portion of the year such
employee participated in the STIP. Employees performing below a satisfactory
level may forfeit their right to receive a STIP award.

 

d.                                       Eligible
employees are covered under one of the following two STIP arrangements based on
the location of the employee’s principle place of employment:

 

i.                                         Corporate
Plan – covers employees who work in the Company’s headquarters in Greenwood
Village, Colorado or one of the Company’s centralized operations; or

 

ii.                                     Region
Plan – covers employees who are employed with respect to a specific region
of the country, as designated by the Compensation Committee of the Company’s 

 

 

Board of Directors (the “Compensation Committee”) or its designee (each,
a “Region”), and who are not covered under the Corporate Plan.

 

e.                                       Except
as provided in an individual employment agreement with an employee, the STIP is
the sole short-term incentive arrangement under which employees of the Company
are entitled and eligible to participate.

 

f.                                         No
employee will have any claim to be granted any award under the STIP, and there
is no obligation for uniformity of treatment among employees participating in
the STIP.  In addition, nothing in the
STIP or in any award granted shall confer on any employee the right to continue
in the employ of the Company or its affiliates or to be entitled to any
remuneration or benefits not set forth in the STIP or to interfere with or
limit in any way the right of the Company to terminate such employee’s
employment.

 

4.                                      Company
Performance Criteria

 

a.                                       Target awards under the STIP will be
awarded based on a percentage of the employee’s base pay, depending upon the
employee’s job title.  Actual awards may be less (or more) than
the target award amounts, depending on satisfaction of Company, Region and
individual performance goals.

 

b.                                       Under
the Corporate Plan, subject to adjustment based on the satisfaction of
individual performance goals (as provided in section 4(d)), an eligible
employee’s bonus will first be determined based on the Company’s operating and
financial performance.  The Company’s
performance goals or measures will be weighted based on percentages determined
by the Compensation Committee or its designee, in its sole discretion.  The Company’s performance will be measured
using the following criteria:

 

•                  Basic
Subscribers;

•                  Revenue;

•                  Operating
Cash Flow;

•                  Capital
Expenditures;

•                  Customer
Care; and

•                  Internal
Controls.

 

c.                                       Under
the Region Plan, subject to adjustment based on the satisfaction of individual
performance goals (as provided in section 4(d)), an eligible employee’s
bonus will first be determined based:

 

i.                                         75%
on the financial and operating performance for the relevant Region, as
determined by the Compensation Committee or its designee, in its sole
discretion, and

 

ii.                                     25%
on the Company’s operating and financial performance (as described above in section 4(b)).

 

The performance goals for each Region will be based on the same
performance measures and weightings used for the Corporate Plan, as provided in
section 4(b).

 

d.                                       Once
the Company and Region performance results are determined, as provided in
Sections 4(b) and 4(c), an eligible employee’s estimated award may be
revised, upward or downward, based on individual performance/results achieved,
as determined by such employee’s 

 

2

 

supervisor(s), subject to review and approval, as necessary, by the
Compensation Committee or its designee. 
However, a supervisor may not make overall bonus recommendations for
his/her Region or the Company as a whole that exceed the sum of each individual
in his/her Region’s total eligible award.

 

5.                                      Payment
of Awards

 

a.                                       During
the 1st quarter of 2007, the Chief Executive Officer and the President
of the Company will determine if the Company and each Region has achieved their
previously established performance targets and goals, subject to approval by
the Compensation Committee.  Unless
otherwise determined by the Compensation Committee or except as provided under
Sections 3(b)(iii) and 3(c), awards, if earned, will be paid to all
eligible employees by March 14, 2007. 
All awards shall be made in cash.

 

b.                                       In
the event a plan participant is separated by the Company for any reason other
than cause as determined by the Plan administrator in its sole discretion, the
participant will receive:

 

i.                                         Any
accrued and unpaid STIP for the calendar year prior to the date of termination.

 

ii.                                     Subject
to execution of a general waiver and release of claims, a pro-rata portion of
the STIP for the year in which the termination occurs equal to the product of (A) the
participant’s target STIP award for such year, and (B) a fraction, the
numerator of which shall be the number of days in the calendar year which have
elapsed as of the date of termination and the denominator of which is 365.  This pro-rata portion STIP payment is not
eligible for benefit treatment (e.g. 401(k) Plan withholding). The payment will
be made within 30 days of the separation date.

 

6.                                      Administration,
Miscellaneous

 

a.                                       The
Plan will be administered by the Compensation Committee.  The Compensation Committee shall have the
authority in its sole discretion, subject to and not inconsistent with the
express provisions of the STIP, to administer the STIP and to exercise all the
powers and authorities either specifically granted to it under the STIP or
necessary or advisable in the administration of the STIP, including without
limitation, the authority to grant awards; to determine the persons to whom and
the time or times at which awards shall be granted; to determine the terms and
conditions, restrictions and performance goals and criteria relating to any
award (including whether such performance goals and criteria have been
attained); and to make adjustments to performance goals in response to changes
in applicable laws, regulations or accounting principles.

 

b.                                       The
Company shall deduct from all payments made under the STIP any distributions or
taxes required to be made or withheld by federal, state or local governments.

 

c.                                       The
grant of an award under the STIP is by no means a guarantee that an award will
be paid, but is based on the satisfaction of the performance criteria, as
determined by the Compensation Committee.

 

3Exhibit 10.2

 

 

December 6, 2005

 

EMPLOYEE FIRST AND LAST NAME

 

Dear EMPLOYEE FIRST NAME,

 

Congratulations! We are pleased to confirm your participation in the
2006 Adelphia Communications Short-Term Incentive Plan (STIP).   The 2006 STIP was approved by the
Compensation Committee of the Board of Directors on December 4,
2005.  The plan is a key
component of your total compensation package.

 

For you, the 2006 STIP means an opportunity to earn TARGET% of your salary, subject to proration for changes in
salary, and/or time in the plan.

 

2006 will be a challenging year as we finalize the sale of assets with
the buyers. Until the sale is finalized we need to maintain a sharp focus on
our goals and objectives and continue to improve operational and financial performance
and increase our subscriber base.

 

Recognizing that it is anticipated that the sale of Adelphia’s assets
to the buyers will close within the first half of the year, the Company
performance criteria under the 2006 STIP have only been developed for the first
six months of 2006.  If necessary, the
Company will develop performance criteria for the balance of 2006.

 

A summary of the plan and a plan document is attached for your
review.  Please take time to read and
understand it.  Think about what you can
personally do to improve results and help all of us achieve our goals.  Think about how we can better serve our
customers, and how you can lead your team to improve the business and to meet
our 2006 objectives.

 

Congratulations again and thank you for your continued support,
commitment and good work.

 

Sincerely,

 

 

	
   

  	
   

  
	
  Bill Schleyer

  	
  Ron Cooper

  
	
  Chairman and CEO

  	
  President and COO

  
	
   

  	
   

  
	
   

  	
   

  
	
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