Xx Xxxxx Xxxxxxxx
Xxxxxxxxxx House
0 Xxxxx Xxxxx
Xxxxxx Green
Beaconsfield
Buckinghamshire
HP9 1XZ
13 July 2001
WITHOUT PREJUDICE
SUBJECT TO THE APPROVAL OF THE BOARD OF
FLAG TELECOM HOLDINGS LIMITED
AND SUBJECT TO CONTRACT
Dear Xxxxx
Following our recent discussions, set out below are the terms of the agreement
(this "Agreement") between you and FLAG Telecom Holdings Limited ("the Company")
regarding the conclusion of your employment with the FLAG Group and the
cessation of all offices held by you in the FLAG Group.
1. Your employment with FLAG Group will end on 31 January 2002 or such
earlier date you commence new employment, or such earlier date notified by
you to the Company (such notice to be in writing to the Company's HR
Department) on which you wish your employment to cease (the "End Date").
Your employment contract or contracts shall cease to apply effective as of
the End Date except for those clauses that expressly survive and apply
thereafter (including without limitation Appendix 5 of the Employee
Handbook: Protection of Material, Non-Public and other Confidential
Information and Prevention of Xxxxxxx Xxxxxxx and Tipping; Appendix 5b of
the Employee Handbook: Company Policies and Procedures concerning
Protection of Material, Non-Public and other Confidential Information and
Prevention of Xxxxxxx Xxxxxxx and Tipping) as amended by this Agreement.
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2. Up to 9 August 2001 you will be required to attend the Company's offices
and you will put in good order all those matters and areas for which you
are responsible. During this period you will assist in an orderly transfer
of your duties, by answering queries raised by employees or officers of
the Company and any Associated Company and by providing timely assistance
to the new Chief Financial Officer. From 9 August to 1 October 2001 ("the
Separation Date") you will not be required to attend the Company's'
offices but will continue to assist in the transfer of your duties as set
out above, and you will provide telephone assistance while you are away
from London. Between the Separation Date and the End Date you will be on
"garden leave" and will not be required to attend the office, but you are
required to provide reasonable assistance to the FLAG Group as set out in
paragraph 19.
SALARY AND BENEFITS
3. You will be paid your current salary (of US$18,750 per month) to the End
Date and will receive benefits to the Separation Date. Payment of the
final instalment of your salary is conditional upon you having complied
with paragraph 28.7 of this Agreement Save as otherwise provided for in
this Agreement, all benefits extended to you including, but not limited to
insurance benefits, accommodation, travel and car allowances, payment of
education costs for your children, and pension contributions will cease as
of the Separation Date and your salary payments will cease on the End
Date. You will receive payment on the Separation Date of US$8,653 for
accrued and unused vacation earned through the Separation Date. Vacation
will not accrue between the Separation Date and the End Date and you will
receive no further payment in respect of unused vacation. All payments and
benefits will be subject to the tax equalisation arrangements referred to
in paragraph 7 below.
PAYMENTS
4.1 As additional benefits to you and in consideration for your obligation
under paragraph 26 of this Agreement and the provisions of paragraphs 26
and 27, the Company will pay to you on the Separation Date the sum of
US$431,306
2
(less such payments you will receive as your current salary from the
Separation Date through the End Date) which sum is subject to the tax
equalisation arrangements referred to in paragraph 7 ("the Compensation
Payment");
4.2 The Company will pay you the sum of US$200,000 within 7 days of the
execution of this Agreement in accordance with the letter to you from J R
B Scholes dated 17 March 1999 regarding minimum guarantee payments and you
acknowledge that there are no further sums due to you under this letter.
This amount will not be subject to the tax equalisation arrangements
referred to in paragraph 7.
4.3 The payments in this paragraph 4 will be subject to actual and/or
hypothetical tax and social security withholdings as appropriate.
4.4 For the avoidance of doubt if the End Date is earlier than 31 January 2002
the balance of current salary that would have been paid for the period
ending on 31 January 2002 will be paid in a lump sum at the end of the
month in which the actual End Date occurs subject to your having complied
with paragraph 28.7 at the end of the month in which the actual End Date
occurs.
OTHER COMPENSATION OR BENEFITS
5. You hereby acknowledge and agree that, except as expressly provided in
this Agreement, you will not receive any additional compensation,
severance or benefits after the End Date.
RELOCATION
6. The Company will pay the following costs associated with your repatriation
to the US or relocation elsewhere. If you relocate elsewhere the Company
will pay a sum equivalent to the costs of repatriation to the US. Payment
under this paragraph is subject to the production of receipts or other
documentary evidence of the costs to the Company's satisfaction. The costs
which will be met by the Company are:
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(i) Package, transportation, and air-freight costs of your personal
effects to the US (subject to your providing two competitively
priced quotations for such services)
(ii) Business class one way direct route air tickets for you, your spouse
and your children to the city of your choice in the United States of
America
(iii) Reasonable hotel accommodation for a maximum period of 30 nights
while you arrange local accommodation.
TAXATION
7. In respect of payments and benefits made or accruing up to the End Date
and relocation costs under paragraph 6 and the provision of
PricewatehouseCoopers assistance in accordance with this paragraph 7, you
shall continue to benefit from the operation of the tax equalisation
arrangement (which includes tax and social security withholdings) which
has previously been operated in the usual way (which for the avoidance of
doubt excludes tax relating to share options) and the Company will pay the
fees of PricewaterhouseCoopers to assist in the preparation of your US and
UK tax returns for the fiscal tax years 2000-2001 and 2001-2002 (UK) and
calendar tax years 2000, 2001 and 2002 (US) up to a maximum of(pound)3,500
per year.
8. (i) Except as provided in this Agreement and following the End Date
you will stop receiving any payments from the Company and will
consequently cease suffering hypothetical tax withholding.
(ii) After the preparation of your US and foreign tax returns as detailed
in paragraph 7 above, PricewaterhouseCoopers will continue to
prepare tax equalisation calculations to ensure that you only suffer
the equivalent tax on income in the US that you would have received
had the foreign assignment not occurred.
(iii) Please note that if you continue to reside in the foreign country
after you leave the Company, the Company's or any Associated
Company's
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share of any foreign and or US income and social tax
liability (and any subsequent calculation of `grossed up' taxes)
earned during your employment, will be computed as if you had
relocated to the US immediately after the End Date. Your decision to
remain in such foreign country or subsequently to return to that
country or another foreign location is personal and any increase in
the rate or level of tax will be your responsibility.
9. FOREIGN TAX CREDIT
(i) While on overseas assignment from the US, the Company has been
paying foreign taxes on your behalf which may then be taken as a
credit on your actual US tax return. It may not have been possible
to take a full credit for those foreign taxes paid and in those
circumstances the `excess foreign tax credits' are `carried forward'
to offset taxes payable on foreign source income received in future
years. This credit can be carried forward for up to five years.
(ii) Any tax benefits related to the use of foreign tax credits generated
while on foreign assignment with the Company or any Associated
Company will accrue to the Company or such Associated Company.
Accordingly, PricewaterhouseCoopers will notify the Company of any
remaining foreign tax credit carry forwards when the last assignment
related income tax return is prepared.
(iii) If any foreign tax credits carried forward are used subsequently to
your departure from the Company, you will be required to submit the
tax return to PricewaterhouseCoopers who will determine at the
Company's expense the tax benefit derived from the foreign tax
credit. This amount will be payable by you to the Company.
REFUNDS
(iv) You may receive US and foreign tax refunds in a period after the End
Date that may relate to a period when you were covered by the tax
equalisation policy. All foreign tax refunds must be returned to the
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Company on receipt. Any US tax refunds will be considered as part of
the final reconciliation calculation and may be payable back to the
Company.
AUDITS
(v) The Internal Revenue Service and foreign country tax authorities
may, on occasion, examine your tax return relating to a period where
you received overseas allowances as a result of your overseas
assignment. After the examination, the final reconciliation
calculation for that year will be re-computed by
PricewaterhouseCoopers at the Company's expense to account for any
adjustments. In addition they may be called upon at the Company's
cost to represent you in any tax examination related to a year of
assignment.
EXPENSES
10. You hereby acknowledge and agree that within 3 months of the Separation
Date you will submit your final documented expense reimbursement statement
reflecting those business expenses reasonably incurred through the
Separation Date, for which you seek reimbursement. The Company will
promptly reimburse these expenses.
SUMS OWED TO COMPANY
11. The parties agree that no sums are owed by you to the Company or any
Associated Company with respect to holiday taken in excess of your
pro-rata entitlement, any outstanding loan, or any advance of salary or
training costs made to you by the Company or any Associated Company.
SUMS OWED TO EMPLOYEE
12. You hereby acknowledge and agree that, save as set out in this Agreement,
there are no sums owed to you by the Company or any Associated Company
including any payments under any bonus, incentive, share option or similar
scheme (including, but not limited to the FLAG Telecom Holdings Limited
Long-Term Incentive Plan ("the Plan")) and that neither the Company nor
any
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Associated Company nor the trustees of any such scheme is or shall be
liable to make any payment or provide you with any shares under any such
scheme.
PENSION
13. As an additional benefit on the Separation Date the Company shall pay the
sum of US$35,958 to a pension scheme nominated by you.
MEDICAL, DENTAL AND LIFE INSURANCE
14. The Company will continue to provide you (and your immediate family if
provided under the current arrangements) with and will pay for medical,
dental and life insurance cover until the End Date subject to the terms of
these schemes from time to time in force. Thereafter the Company will
continue to provide you (and your immediate family if provided under the
current arrangements) with medical and dental cover subject to your
continued payment of the premiums or contributions which shall be notified
to you and subject to the terms of the schemes until you find new
employment providing equivalent cover.
SHARE OPTIONS
15. Subject to Appendix 5b of the Employee Handbook and notwithstanding the
terms of any award certificate you shall be entitled for a period of one
year following the Separation Date to exercise such options granted to you
under the Plan as have vested prior to the Separation Date in accordance
with the terms of the Plan and illustrated by the vesting schedule
attached at Schedule 1. Pursuant to the Plan all unvested options will
lapse as at the End Date. In addition, 66,667 vested options granted on 1
July 1998 will lapse as of the date of execution of this Agreement.
RESIGNATION AS A DIRECTOR AND AUTHORISED SIGNATORY
16. You will remain Chief Financial Officer of the Company until 9 August
2001. On execution of this Agreement you will execute a letter in the form
of Xxxxxxxx 2 resigning as Chief Financial Officer with effect from 9
August 2001. You hereby acknowledge and agree that you hold no offices and
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authorities for signature in or on behalf of the Company or any Associated
Company. You undertake to execute all documents and do such further things
(at the expense of the Company) as may be necessary to effect your
resignation from any office in the FLAG Group.
17. You hereby acknowledge and agree that from the 9 August 2001 to the
Separation Date and continuing thereafter you shall not hold yourself out
as authorised to make any financial statements on behalf of the FLAG
Group, to incur fees, expenses or liabilities of any kind or pledge credit
on behalf of the Company or any Associated Company in respect of any third
party (including but not limited to auditors, legal advisers, investment
banks and houses and suppliers).
18. The Company shall ensure that cover shall continue for you in respect of
your acts and omissions as a director or officer of the Company and any
Associated Companies to the extent such cover is available under the terms
of the Company's and Associated Companies' Directors' and Officers'
Liability Insurance policy. For the avoidance of doubt, no waivers or
releases referred to in paragraphs 27 and 28 given by you herein or
pursuant hereto shall extend to any indemnities of the Company and any
Associated Company contained in the by-laws of the Company or any
Associated Company or approved by any board resolution of the Company or
any Associated Company in connection with you being a director or officer
of the Company or any Associated Company or your involvement with the
Company's initial public offering or any capital raising activities of the
Company or any Associated Company.
REASONABLE ASSISTANCE
19.1 You agree that subject to paragraph 19.2 at the request of the Company
from the date of execution of this Agreement, including following the
termination of your employment you will provide the Company and any
Associated Company with such assistance as it may reasonably require in
the conduct of legal proceedings or any inquiry or investigation in
respect of which the Company and/or any Associated Company or its or their
legal advisers believe you may
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be able to provide assistance. In the event such assistance is requested,
the Company will reimburse you for reasonable out-of-pocket expenses in
accordance with the Company's travel and reimbursement policy.
19.2 From the Separation Date until 6 months following the End Date you may be
asked to provide assistance for up to 10 hours in any month. If above 10
hours work is required or if assistance is required following six months
following the End Date you will be paid for your assistance on a mutually
agreed basis. You agree to provide occasional telephone assistance and
such assistance will not be taken into account in computing the 10 hours
referred to above.
RETURN OF PROPERTY
20. You hereby acknowledge and agree that on or before the Separation Date you
will return in good condition and without modification all books,
documents, correspondence, computer disks, papers, materials, laptop
computer, mobile telephone, credit or charge and telephone cards and keys,
including all copies thereof, and all other property of or relating to the
business or affairs of the Company or any Associated Company or any
officer, employee, customer, supplier or agent of the Company or any
Associated Company, to the Company's premises save for public documents,
copies of forms and precedents and other materials that may be required to
fulfil your obligations pursuant to paragraphs 2 and 19. You further
acknowledge and agree that on or before the Separation Date you will
delete any information belonging to the Company or any Associated Company
from any personal computer that you may have at home or elsewhere other
than the Company's offices without retaining any copies of any such
information, in electronic or other format save for public documents,
copies of forms and precedents and other materials that may be reasonably
required to fulfil your obligations pursuant to paragraphs 2 and 19. You
acknowledge and agree that you have notified the Company of any passwords
used by you in relation to its computer system.
REFERENCE
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21. The Company will on any reasonable request by a prospective employer or
employment agency in the UK provide a written reference with respect to
your employment with the FLAG Group (subject in each case to any material
information which may subsequently come to the attention of the FLAG
Group).
CONFIDENTIALITY AND NON-DISPARAGEMENT
22. You and the Company agree that you, the Company and the Associated
Companies will hold the provisions of this Agreement and the circumstances
leading to the termination of your employment in strictest confidence and
will not, except with the prior written consent of the other party,
directly or indirectly, publicize or disclose in any manner whatsoever the
provisions of this Agreement or the circumstances leading to the
termination of your employment; PROVIDED, HOWEVER, that you may disclose
this Agreement to your immediate family; and that each party (including
any Associated Company) may disclose this Agreement: (a) in confidence to
their attorneys, accountants, auditors, tax preparers, and financial
advisors (provided they have themselves agreed to maintain the
confidentiality of such communications); and (b) insofar as such
disclosure may be necessary to enforce the terms of this Agreement or as
otherwise required by law. In particular, and without limitation, both
parties (including any Associated Company) agree not to disclose the terms
of this Agreement to any current or former employee of the FLAG Group.
23. You hereby agree not to disparage the Company or any Associated Company or
any of their respective officers, directors, employees, shareholders,
attorneys and agents, in any manner likely to be harmful to them or their
business, business reputation or personal reputation and the Company will
not and agrees to procure that its Associated Companies and the officers
of the Company and of FLAG Limited will not disparage you in any manner
likely to be harmful to you or your business, business reputation or
personal reputation and will use reasonable endeavours to prevent the
officers and employees of the FLAG Group from disparaging you in any
manner likely to be harmful to you or your business, business reputation
or personal reputation; PROVIDED, HOWEVER, that you and the FLAG Group may
respond
10
accurately and fully to any question, inquiry or request for information
when required by legal process.
PROPRIETARY INFORMATION OBLIGATIONS
24. You hereby acknowledge that you signed and agree to continue to be bound
by the provisions of the non-compete and proprietary information
agreement, and also by Appendices 5 and 5b of the Employee Handbook,
copies of which are attached to this Agreement at Schedule 3 (except as
amended by this Agreement).
ASSIGNMENT OF INVENTIONS
25. You hereby irrevocably assign to the Company all right, title and interest
in and to any and all inventions (whether or not patentable), copyrights,
trademarks, know-how, proprietary techniques and trades secrets or similar
proprietary rights that you developed in the course of your employment by
the FLAG Group, or during working hours, or using Company tools,
materials, resources, or equipment or which you might otherwise own which
would be needed by the Company in order to develop and sell its products
and operate its business. You hereby waive and quitclaim to the Company
any and all claims, of any nature whatsoever, which you now have or may
hereafter have for infringement of any patents or copyrights resulting
from any such application for letters, patents, copyright registrations
assigned hereunder to the Company.
RESTRICTIVE COVENANTS
26. Subject to the provisions of this Agreement you agree that the provisions
contained in the non-compete and proprietary information agreement
attached in Schedule 3 Part 2 as modified by this Agreement shall continue
to apply and be binding upon you to the End Date and thereafter save that
in consideration of and subject to your receipt of the Compensation
Payment you agree that such non-compete and proprietary information
agreement shall be amended so that the non-compete covenant (at clause 1)
shall be deleted and replaced with the non-compete covenant attached at
Schedule 3 Part 1
11
and the non-compete and proprietary information agreement at Parts 1 and 2
of Schedule 3 shall be subject to English law and the non-exclusive
jurisdiction of the English courts and tribunals.
FULL AND FINAL SETTLEMENT
27. In consideration of and subject to the receipt of the Compensation Payment
and in further consideration of the other items described herein, on
behalf of yourself, your heirs, spouse, assigns, attorneys and agents, you
hereby release, acquit and forever discharge the Company and any
Associated Company and its or their officers, directors, agents, servants,
employees, attorneys, shareholders, predecessors, successors, assigns and
affiliates, and the Company and its Associated Companies hereby release
acquit and forever discharge you of and from any and all claims,
liabilities, demands, causes of action, costs, expenses, attorneys' fees,
damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected,
disclosed and undisclosed, ("Claims") arising out of or in any way related
to any agreement, event, conduct, act, omission or circumstance that has
occurred or will occur at any time prior to and including the End Date,
(except for the New UK Statutory Claims and New Personal Injury Claims
referred to in paragraph 28.6 below) directly or indirectly arising out of
or in any way connected with your employment with the FLAG Group, the
termination of that employment (even though this occurs after the date of
execution of this Agreement), or any office held by you by virtue of your
employment or the loss of any such office; including but not limited to
Claims related to salary, bonuses, commissions, stock, stock options, or
any other ownership interests in the Company, vacation pay, fringe
benefits, expense reimbursements, severance pay, or any other form of
compensation; tort law; contract law; wrongful discharge; discrimination;
harassment; fraud; defamation; or emotional distress (whether arising
under common law, statute, European Union law or otherwise, whether in the
United Kingdom or elsewhere in the world and whether contemplated or not)
and you (in consideration of and subject to the receipt of the
Compensation Payment and in further consideration of the other items
described herein) and the Company and its Associated Companies will
refrain from instituting or
12
continuing and will forthwith withdraw any legal proceedings or complaint,
including without limitation any complaint before or to an employment
tribunal or administrative agency. You and the Company both acknowledge
that there are or may be Claims which are not contemplated (whether on the
facts known to the parties or on the law as it is known) at the date of
this Agreement by the parties or either of them but that the waiver
contained in this paragraph waives and releases any and all such claims
(except for the New UK Statutory Claims and New Personal Injury Claims
referred to in paragraph 28.6 below). For the avoidance of doubt the
provisions of this Agreement remain fully enforceable as between the
parties and are not affected by the terms of this waiver and release.
28.
28.1 You hereby warrant that before signing this Agreement you received
independent legal advice from Xxxxxxx Xxxx of Penningtons, Highfield,
Brighton Road, Godalming, Surrey, GU7 1NS ("Legal Adviser"), a qualified
lawyer, as to its terms and effect on, in particular, your ability to
bring a statutory claim, including but not limited to any claim for:
(i) unfair dismissal;
(ii) a redundancy payment;
(iii) unlawful deductions from wages;
(iv) unequal treatment contrary to the provisions of the Equal Pay Act
1970;
(v) race discrimination or victimisation under the Race Relations Act
1976;
(vi) sex discrimination or victimisation under the Sex Discrimination Act
1975;
(vii) disability discrimination or victimisation under the Disability
Discrimination Act 1995;
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(viii) breach of the Transfer of Undertakings (Protection of Employment)
Regulations 1981;
(ix) breach of the Working Time Regulations 1998;
(x) breach of the Trade Union and Labour Relations (Consolidation) Act
1992; and
(xi) breach of the Transnational Information and Consultation of
Employees Regulations 1999.
28.2 You agree that subject to paragraph 28.6 below to the extent you have or
may have any such complaints, the waiver and release in paragraph 27 above
expressly relates to each and every one of those complaints.
28.3 In consideration of and subject to your receipt of the Compensation
Payment you waive and release all other complaints or Claims of any nature
against the Company or any Associated Company under the Employment Rights
Act 1996, the Equal Pay Act 1970, the Race Relations Act 1976, the Sex
Discrimination Act 1975, the Disability Discrimination Act 1995, the Trade
Union and Labour Relations (Consolidation) Act 1992, the Transfer of
Undertakings (Protection of Employment) Regulations 1981, the Working Time
Regulations 1998, the Transnational Information and Consultation of
Employees Regulations 1999 except for the New UK Statutory Claims referred
to in paragraph 28.6 below.
28.4 Your Legal Adviser confirms that he has advised you on the claims set out
in paragraph 28.1 above by signing the certificate addressed to the
Company at Schedule 4.
28.5 The parties agree that all conditions regulating compromise agreements
contained in any of the legislation referred to at sub-paragraphs 28.1 and
28.3 above have been satisfied.
28.6 The waivers and releases of claims and complaints in paragraphs 27 and 28
do not include statutory claims referred to in paragraphs 28.1 and 28.3
above or personal injury claims in each case arising out of entirely new
acts or
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omissions which are currently unknown and not contemplated by the
parties as at the date of execution of this Agreement and which occur
between the date of execution of this Agreement and the End Date ("the New
UK Statutory Claims" and "the New Personal Injury Claims" respectively),
but for the avoidance of doubt the waivers and releases in paragraphs 27
and 28 do include all Claims (other than the New UK Statutory Claims, New
Personal Injury Claims and claims for breach of this Agreement) relating
to the future cessation of your employment with the FLAG Group on the End
Date as provided for in this Agreement.
28.7 On the termination of your employment on the End Date you agree to execute
a further waiver and release in the terms of Schedule 6 within 7 days of
the End Date. The final salary payment (including the full amount of any
accelerated payment of salary arising as a result of the End Date
occurring earlier than 31 January 2002) is conditional upon you executing
and delivering to the Company this form of waiver and release.
29. Each of the parties is entering into this Agreement in reliance upon the
acknowledgements and agreements and warranties in this Agreement.
INJUNCTIVE RELIEF
30. The parties hereto hereby agree that damages would be an inadequate remedy
for the Company its Associated Companies or you in the event of a breach
or threatened breach of paragraphs 22, 23, 24, 25 or 26 of this Agreement
and, in the event of any such breach or threatened breach, the Company its
Associated Companies or you may, either with or without pursuing any
potential damage remedies, obtain and enforce an injunction prohibiting
you, the Company or the Associated Companies from violating this Agreement
and requiring you, the Company or the Associated Companies to comply with
the terms of this Agreement.
GOVERNING LAW AND JURISDICTION
31. This Agreement will be deemed to have been entered into and will be
construed and enforced in accordance with the laws of England and Wales
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without regard to principles of conflict of laws. The parties hereby agree
to submit to the non-exclusive jurisdiction of the English courts and
tribunals for any action to enforce this Agreement or to seek equitable
relief.
MISCELLANEOUS
32. This Agreement constitutes the complete, final and exclusive embodiment of
the entire agreement between you and the FLAG Group with regard to this
subject matter. It is entered into without reliance on any promise or
representation, written or oral, other than those expressly contained
herein, and it supersedes any other such promises, warranties or
representations. This Agreement may not be modified or amended except in
writing signed by you and a duly authorized officer of the Company.
33. This Agreement will bind the heirs, personal representatives, successors
and assigns of you and the FLAG Group, and inure to the benefit of you and
the FLAG Group, and your and their heirs, successors and assigns. In the
event of your death prior to the payment in full of all amounts payable to
you pursuant to this Agreement, amounts that would otherwise have been
payable to you will be payable to your estate.
34. The Contracts (Rights of Third Parties) Act 1999 shall apply to this
Agreement. Any of the Associated Companies (as defined at paragraph 38
below) shall be entitled to enforce the benefits conferred by this
Agreement. No consent of any such Associated Company will be required for
the variation or termination of this Agreement, even if that variation or
termination affects the benefits conferred on such Associated Company.
Except as provided in this paragraph 34 , a person who is not a party to
this Agreement has no right under the Contracts (Rights of Third Parties)
Act 1999 to enforce any term of this Agreement but this does not affect
any right or remedy of a third party which exists or is available apart
from that Act.
35. If any provision of this Agreement is determined to be invalid or
unenforceable, in whole or in part, this determination will not affect any
other provision of this Agreement and the provision in question will be
modified by the court so as to be rendered enforceable.
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36. The parties understand that each party is responsible for bearing its or
his own costs and attorney's fees incurred in connection with matters
released in this Agreement, the preparation and negotiation of this
Agreement, and all other matters or events between the parties up to the
time of this Agreement.
37. If either party brings an action to enforce the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorneys' fees and
costs.
38. As used herein, "Associated Company" means the companies listed at
Schedule 5 and any other company directly or indirectly controlled by FLAG
Telecom Holdings Limited.
39. As used herein, "foreign" means non United States, "US" means the United
States of America and "UK" means the United Kingdom.
40. References in this Agreement to the provisions of any statute or
subordinate legislation shall be deemed to refer to the same as in force
including any amendment or re-enactment from time to time.
41. The headings in this Agreement are for ease of reference only and shall
not affect interpretation.
42. The FLAG Group means FLAG Telecom Holdings Limited and all of the
Associated Companies.
43. The Company will cause its Associated Companies to honour this Agreement
and will be responsible for any default on the part of any of the
Associated Companies.
Please confirm your acceptance of the above terms by signing, dating and
returning to me the enclosed copy of this Agreement, together with the
Solicitor's Certificate signed and dated by your Legal Adviser, whereupon the
terms of this Agreement, although marked without prejudice and subject to
contract shall become binding upon the parties subject to this Agreement having
been approved by the Board of Directors of the Company.
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Yours sincerely
FOR AND ON BEHALF OF
FLAG TELECOM HOLDINGS LIMITED ON ITS OWN BEHALF
AND ON BEHALF OF THE ASSOCIATED COMPANIES
/s/ Xxxxxx Xxxxx
Chairman and CEO
Duly authorized by resolution of the Board
I understand and accept the terms of this Agreement.
Signed:
/s/ Xxxxx Xxxxxxxx
------------------------------------
XXXXX XXXXXXXX
Date:
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SCHEDULE 1
VESTING SCHEDULE
XXXXX DATE PLAN PRICE GRANTED EXERCISED LAPSED VESTED UNVESTED
30/9/1999 International US$ 6.42 10,000 0 0 10,000 0
10/4/2000 International US$22.50 44,000 0 0 22,000 22,000
14/9/2000 International US$12.00 22,000 0 0 11,000 11,000
10/4/2001 International US$ 2.75 22,000 0 0 0 34,000
------- --------- ------ ------- --------
164,667 0 0 43,000 67,000
Note the 66,667 options granted on 1 July 1998 are not shown in this Schedule as
under the terms of this Agreement they lapse.
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SCHEDULE 2
The Board of Directors
Flag Telecom Holdings Limited ("the Company")
Dear Sirs
I hereby resign from my position as Chief Financial Officer of the Company with
effect from 9 August 2001 without prejudice to any of my rights under the
agreement between the Company and me of today's date.
Yours sincerely
Xxxxx Xxxxxxxx
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SCHEDULE 3
PART 1
The Executive acknowledges that in the course of his employment he has had
access to confidential and proprietary information belonging to the Company and
Affiliated Companies and has knowledge of and influence over the Company's and
Affiliated Company's clients and that he is in possession of knowledge and
information which is not available other than to the Company and Affiliated
Companies and would be detrimental to the Company and Affiliated Companies if
known to the Company's and Affiliated Companies' competitors.
1) PROHIBITION AGAINST COMPETITIVE ACTIVITIES
The Executive, without the prior written consent of the Board of Directors
of the Company (or any successor governing body of the Company) shall not
either alone or jointly with others as an individual, partner,
shareholder, officer, director, principal, agent, employee, consultant or
in any other capacity whether directly or indirectly through any other
person, firm or company and whether or not for Executive's own benefit:
(i) During the period of Executive's employment with the Company or any
other Affiliated Company, and for a period of twelve months
following the Separation Date work for, or provide services to, or
accept any employment, appointment or engagement or become
interested in, any company or entity within the Tycom, Level 3,
Global Crossing, or 360 Networks group of companies provided however
that nothing herein shall prevent the Executive from acquiring
securities of a publicly traded company so long as the Executive's
equity interest in any such company is less than 5% of the
outstanding capital stock of such company;
(ii) During the period of Executive's employment with the Company or any
other Affiliated Company, and for a period of twelve months
following the Separation Date, in competition with the Company
and/or any of
21
the Affiliated Companies in any geographic area where the Company or
any other Affiliated Company conducts business (or at the time of
the Separation Date, had a board-approved business plan under which
it planned to conduct business and about which the Executive had
knowledge) engage in commercial or professional activities relating
to the sale, marketing, construction, building, operation,
maintenance and installation of submarine telecommunications cable
capacity ("Competitive Activities") provided, however, that nothing
herein shall prevent the Executive from acquiring securities of a
publicly-traded company so long as the Executive's equity interest
in any such company is less than 5% of the then outstanding capital
stock of such company;
(iii) During the period of Executive's employment with the Company or any
other Affiliated Company, and for a period of twelve months
following the Separation Date, interfere with the relations of the
Company or any other Affiliated Company with any of its employees,
agents, representatives, suppliers or vendors under contract, or
joint ventures, where any such person or entity co-operates with or
supports the Company or any other Affiliated Company; or
(iv) During the period of Executive's employment with the Company or any
other Affiliated Company, and for a period of twelve months
following the Separation Date, induce or solicit, otherwise
encourage any employee of the Company or any other Affiliated
Company to terminate his or her employment with the Company or any
other Affiliated Company or for a period of six months from the
Separation Date employ or offer employment to any person who was
employed by the Company or any Affiliated Company at the Separation
Date or in the four months prior to the Separation Date.
For the purposes of this Schedule 3:
22
(i) "The Company", "Affiliated Company" and "Separation Date" shall have
the same meanings respectively as "the Company", "Associated
Company" and "Separation Date" in the Agreement to which this forms
Schedule 3 Part I and
(ii) "the Executive" means Xxxxx Xxxxxxxx
(iii) any employee means any person who was employed by the Company or any
other Affiliated Company with whom the Executive personally dealt
and who was or is employed in a managerial sales or technical
capacity.
The Company shall send the Executive written notice in the event that the
Company believes that Executive has violated any of the prohibitions of this
Schedule 3; provided, however, that any failure by the Company to give notice
under this provision or to enforce its rights under this Agreement in any one or
more instances shall not be a bar to the Company giving notice and taking action
to enforce its rights under this Agreement at any later time.
The provisions in this clause are intended to be separate, severable and
enforceable as such.
23
PART 2
COPY APPENDICES TO EMPLOYEE HANDBOOK AND NON-COMPETE AGREEMENT
24
SCHEDULE 4
SOLICITOR'S CERTIFICATE
I hereby certify as follows:
1. I am a Solicitor of the Supreme Court of England and Wales holding a
current practising certificate.
2. I have advised Xxxxx Xxxxxxxx of the terms and effect under English law of
the Agreement between FLAG Telecom Holdings Limited and him dated
_________________________________ 2001 and, in particular, its effect on
his ability to pursue his rights before an employment tribunal following
its signing.
3. I am not acting (and have not acted) in relation to this matter for FLAG
Telecom Holdings Limited or any Associated Companies (as defined in the
Agreement).
4. There is in force and was in force when I gave the advice referred to
above, cover under a contract of insurance, or an indemnity provided for
members of a profession or professional bodies relating to the risk of a
claim by Xxxxx Xxxxxxxx in respect of loss arising from such advice.
SIGNED:
SOLICITOR:
FIRM NAME:
ADDRESS:
25
SCHEDULE 5
ASSOCIATED COMPANIES
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Holdings Limited Cedar House, Suite 770, Bermuda 00000
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX00, Xxxxxxx Xxxxxxxx XX00
Xxxxxxx
-------------------------------------------------------------------------------------------------------------------------------
FLAG Limited Cedar House, Suite 770, Bermuda EC/17928
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX00, Xxxxxxx Hamilton HM11
Bermuda
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Development Limited Cedar House, Suite 770, Bermuda E26206
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX00, Xxxxxxx Xxxxxxxx XX00
Xxxxxxx
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Development Services 00 Xxxxxxx Xxxxxx Xx., Safir Suites Hotel, Egypt N/A
Company LLC Messaha, Dokki Suite 701
Cairo 00000, 00 Xxxxxxxx Xxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxx
Xxxxx
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Network Services Hardwicke House, 2/F Same as registered office Ireland 000000
Xxxxxxx Xxxxx Xxxxxx
Xxxxxx 2
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Ireland Limited Hardwicke House, 2/F Same as registered office Ireland 000000
Xxxxx Xxxxxx
Xxxxxx 2
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Japan Limited Xxxxx Xxxxxxxxx Building, 5/F Same as Registered Office Japan 038860
00 Xxxxxxxxx 0-xxxxx
Chiyoda-ku
Tokyo 102-0083
Japan
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Espana SA Po Castellana, 141 Planta 20 C/ Xxxx Xxxxx, 3C Planta 5 Spain N/A
Edificio Cuzco IV 28006 Madrid
28046 Madrid Spain
Spain
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Ireland Services Hardwicke House, 2/F Same as registered office Ireland 000000
Xxxxxxx Xxxxx Xxxxxx
Xxxxxx 0
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Ireland Network Hardwicke House, 2/F Same as registered office Ireland 000000
Xxxxxxx Xxxxx Xxxxxx
Xxxxxx 0
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Network USA Limited Corporation Trust Centre Suite 150, 8045 Leesburg USA 3227686
0000 Xxxxxx Xxxxxx Xxxx, Xxxxxx, Xxxxxxxx 00000
Xxxxxxxxxx, Xxxxxx xx Xxx XXX
Castle
Delaware 19801 USA
-------------------------------------------------------------------------------------------------------------------------------
26
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Nederland Network B.V. Strawinskylaan 3051 Same as Registered Office The 34147123
1077 ZX Amsterdam, The Netherlands
Netherlands
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Servizi Italia SPA Via Pompeo Magno 4 Same as Registered Office Italy N/A
00192, Rome
Italy
-------------------------------------------------------------------------------------------------------------------------------
FLAG Access India Private Ltd The Surya Hotel, Office Floor Same as Registered Office India 55-107573
Business Centre,
New Friends Colony
New Delhi 110065
India
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Group Services Limited Cedar House Suite 000 Xxxxxxx 00000
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX00 Xxxxxxxx XX00
Xxxxxxx Xxxxxxx
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Limited 0 Xxxxx Xxxxxx Same as Registered Office UK 3506159
London W1K 2XA
UK
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom USA LTD. 0000 Xxxxxx Xxxxxx Xxxxx 000, 0000 Xxxxxxxx Xxxx XXX 0000000
City of Wilmington Vienna, Virginia 22182
County of New Castle USA
State of Delaware
USA
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Asia Limited Suite 3305-6 Same as Registered Office Hong Kong 645513
One International Finance
Centre
0 Xxxxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxx Xxxx
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom France Services EURL 00, xxx Xxxxxxxxx Same as Registered Office France R.C.S.
92300 Levallois-Perret Nanterre
France B431 829 134
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Deutschland GmbH Xxxxxxx Xxxxxxxxxxx 00 Same as Registered Office Germany HRB 48284
60329 Frankfurt
Germany
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Services Italia SRL Via XX Settembre No. 1 Via Pompeo Magno 4 Italy N/A
(in liquidation) Rome, Italy 00192, Rome
Italy
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Nederland B.V. Strawinskylaan 3051, 1077 ZX Same as Registered Office The 34147133
Amsterdam, The Netherlands Netherlands
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Global Network Limited Cedar House Suite 000 Xxxxxxx 00000
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX00 Xxxxxxxx XX00
Xxxxxxx Bermuda
-------------------------------------------------------------------------------------------------------------------------------
FLAG Pacific Holdings Limited Cedar House Suite 770 Bermuda 00000
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Xxxx
Hamilton HM12 Hamilton HM11
Bermuda Bermuda
-------------------------------------------------------------------------------------------------------------------------------
FLAG Pacific Limited Cedar House Suite 000 Xxxxxxx 00000
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX00 Xxxxxxxx XX00
Xxxxxxx Xxxxxxx
-------------------------------------------------------------------------------------------------------------------------------
27
-------------------------------------------------------------------------------------------------------------------------------
FLAG Pacific USA Limited Corporation Trust Centre N/A USA 3246409
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxx of New Castle
Delaware 19801
USA
-------------------------------------------------------------------------------------------------------------------------------
FLAG Pacific Canada Limited P O Box 0000, Xxx. "A" N/A Canada 512377
00 Xxxxxxx Xxxx, 00xx Floor
Saint Xxxx
N.B. E2L 4S6
Canada
-------------------------------------------------------------------------------------------------------------------------------
FLAG Pacific Japan Limited Xxxxx Xxxxxxxxx Building, 5/F Same as Registered Office Japan N/A
00 Xxxxxxxxx 0-xxxxx
Xxxxxxx-xx
Xxxxx 102-0083
Japan
-------------------------------------------------------------------------------------------------------------------------------
FLAG Asia Holdings Limited Cedar House Suite 770 Bermuda 00000
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX00 Xxxxxxxx HM11
Bermuda Bermuda
-------------------------------------------------------------------------------------------------------------------------------
FLAG Asia Limited Cedar House Suite 770 Bermuda 00000
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX00 Xxxxxxxx XX00
Xxxxxxx Xxxxxxx
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Deutschland Network Mainzer Landstrasse 47 Same as Registered Office Germany HRB 52228
GmbH 60329 Frankfurt
Germany
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Korea Limited Suite 2303, 23rd Floor, City Same as Registered Office Korea N/A
Air Tower 000-0
Xxxxxxx-Xxxx, Xxxxxxx-Xx
Xxxxx 135-973
Korea
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Singapore Pte.. 8 Shenton Way Same as Registered Office Singapore 20002702N
Limited #00-00 Xxxxxxx Xxxxx
Xxxxxxxxx 000000
-------------------------------------------------------------------------------------------------------------------------------
FLAG Atlantic Holdings Limited Cedar House Suite 770 Bermuda 00000
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX00 Xxxxxxxx XX00
Xxxxxxx Bermuda
-------------------------------------------------------------------------------------------------------------------------------
FLAG Atlantic Limited Cedar House Suite 770 Bermuda 00000
00 Xxxxx Xxxxxx 00 Xxx-xx-Xxxxx Road
Hamilton HM12 Hamilton HM11
Bermuda Bermuda
-------------------------------------------------------------------------------------------------------------------------------
FLAG Atlantic UK Limited 0 Xxxxx Xxxxxx Xxxxxxxxx Xxxxx, 000 Xxxxxx Xxxxxx 0000000
London W1K 0XX Xxxx, Xxxx Xxxxxxx, Xxxxxxxxx Xxxxxxx
XX XX0 0XX,
UK
-------------------------------------------------------------------------------------------------------------------------------
FLAG Atlantic USA Limited 000 Xxxxx XxXxxx Xxxxxxx Xxxxxxxxx Xxxxx, 000 Xxxxxx XXX 0000000
Xxxxx Xxxx, Xxxx Xxxxxxx,
Xxxxxxxx 00000 Xxxxxxxxx
XXX UB7 0JE,
UK
-------------------------------------------------------------------------------------------------------------------------------
FLAG Atlantic France S.A.R.L. 00, xxx Xxxxxxxxx Same as Registered Office France RCS Nanterre
92300 Levallois-Perret B 423 843
France 143 ((2001
B01913)
-------------------------------------------------------------------------------------------------------------------------------
28
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Belgium Network SA c/o Xxxxxx Xxxxxxxx Zwaluwstraat 9 Belgium 112.955
Montagne du Parc 4 3920 Lommel
1000 Bruxelles Belgium
Belgium
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Switzerland Network AG C/x Xxxx & Staehelin N/A Switzerland TBA
Aktiengesellschaft
Bleicherweg 58
8027 Zurich
Switzerland
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Hellas A.E. 0 Xxxxxx Xxxxxx Xxxx 000 Xxxxxx 48637/01/B/
Athens 60 Vasilissis Sophias Avenue 01206
Greece Athens 11528
Greece
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom Norway Network AS C/o Advokatfirmaet Xxxxx DA N/A Norway TBA
Akersgaten 2
0105 Oslo
Norway
-------------------------------------------------------------------------------------------------------------------------------
FLAG Telecom France Network SAS 00, xxx Xxxxxxxxx Same as Registered Office France R.C.S2001B02879
92300 Levallois-Perret
France (
-------------------------------------------------------------------------------------------------------------------------------
29
SCHEDULE 6
COMPROMISE AGREEMENT
Dear Xxxxx
Further to the terms of the agreement dated [ ] between FLAG Telecom
Holdings Limited ("the Company") and yourself ("the Agreement"), you and the
Company have agreed to enter into this further Compromise Agreement ("Compromise
Agreement") as follows:
1. In consideration of and subject to your receipt of your final salary
payment ("the Final Salary Payment") in accordance with paragraphs 3 and
4.4 of the Agreement, on behalf of yourself, your heirs, spouse, assigns,
attorneys and agents, you hereby release, acquit and forever discharge the
Company and any Associated Company and its or their officers, directors,
agents, servants, employees, attorneys, shareholders, predecessors,
successors, assigns and affiliates, from any and all claims, liabilities,
demands, causes of action, costs, expenses, attorneys' fees, damages,
indemnities and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed ("Claims"), arising out of or in any way related to any
agreement, event, conduct, act, omission or circumstance that has occurred
as at the date of execution of this Compromise Agreement directly or
indirectly arising out of or in any way connected with your employment
with the FLAG Group, the termination of that employment, or any office
held by you by virtue of your employment or the loss of any such office;
including but not limited to Claims related to salary, bonuses,
commissions, stock, stock options, or any other ownership interests in the
Company, vacation pay, fringe benefits, expense reimbursements, severance
pay, or any other form of compensation; tort law; contract law; wrongful
discharge; discrimination; harassment; fraud; defamation; or emotional
distress (whether arising under common law, statute, European Union law or
otherwise, whether in the United Kingdom or elsewhere in the world and
whether contemplated or not) and you will refrain from instituting or
continuing and will
30
forthwith withdraw any legal proceedings or complaint, including without
limitation any complaint before or to an employment tribunal or
administrative agency. You acknowledge that there are or may be Claims
which were not contemplated (whether on the facts known to the parties or
on the law as it was known) at the date of the Compromise Agreement by the
parties or either of them but that the waiver contained in this paragraph
waives and releases any and all such Claims (if any). For the avoidance of
doubt the provisions of the Agreement remain fully enforceable as between
the parties and are not affected by the terms of this Compromise
Agreement.
2.
2.1 You hereby warrant that before signing this Compromise Agreement you
received independent legal advice from Xxxxxxx Xxxx of Penningtons,
Highfield, Brighton Road, Godalming, Surrey GU7 1NS ("Legal Adviser"), a
qualified lawyer, as to its terms and effect on, in particular, your
ability to bring a statutory claim, including but not limited to any claim
for:
(i) unfair dismissal;
(ii) a redundancy payment;
(iii) unlawful deductions from wages;
(iv) unequal treatment contrary to the provisions of the Equal Pay Act
1970;
(v) race discrimination or victimisation under the Race Relations Act
1976;
(vi) sex discrimination or victimisation under the Sex Discrimination Act
1975;
(vii) disability discrimination or victimisation under the Disability
Discrimination Act 1995;
(viii) breach of the Transfer of Undertakings (Protection of Employment)
Regulations 1981;
(ix) breach of the Working Time Regulations 1998;
31
(x) breach of the Trade Union and Labour Relations (Consolidation) Act
1992;
(xi) breach of the Transnational Information and Consultation of
Employees Regulations 1999; and
(xii) any other claims related to your employment, or its termination that
could be brought under English law;
2.2 You agree that to the extent you have or may have any such complaints, the
waiver and release of Claims in paragraph 1 above expressly relates to
each and every one of those complaints.
2.3 In consideration of and subject to your receipt of the Final Salary
Payment you waive all other complaints or claims of any nature against the
Company or any Associated Company under the Employment Rights Act 1996,
the Equal Pay Act 1970, the Race Relations Act 1976, the Sex
Discrimination Act 1975, the Disability Discrimination Act 1995, the Trade
Union and Labour Relations (Consolidation) Act 1992, the Transfer of
Undertakings (Protection of Employment) Regulations 1981, the Working Time
Regulations 1998, the Transnational Information and Consultation of
Employees Regulations 1999 or similar statutory or common laws of the US
or otherwise,
2.4 Your Legal Adviser confirms that he has advised you on the claims set out
at paragraph 2.1 above by signing a Solicitor's Certificate addressed to
the Company in the form set out in Schedule 4 of the Agreement with the
amendments necessary to refer to this Compromise Agreement.
2.5 The parties agree that all conditions regulating compromise agreements
contained in any of the legislation referred to at sub-paragraphs 2.1 and
2.3 above have been satisfied.
3. For the purposes of this Compromise Agreement "the Company", and
"Associated Company", shall have the meanings respectively as "the
Company", and "Associated Company" have in the Agreement.
32
Yours sincerely
For and on behalf of
FLAG Telecom Holdings Limited
on its own behalf and on behalf
of the Associated Companies
I understand and accept the terms of this Compromise Agreement
Signed
Xxxxx Xxxxxxxx
33
