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EXHIBIT 4
EMPLOYEE BENEFITS AGREEMENT
EMPLOYEE BENEFITS AGREEMENT (the "Agreement"), dated as of
October 5, between Global TeleSystems Group, Inc., a Delaware corporation
("GTS"), and Golden Telecom, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, GTS is engaged in the telecommunications business
which, in part, includes telecommunications business in Russia and other
countries of the Commonwealth of Independent States (the "Business");
WHEREAS, GTS has caused the Company to be organized as a new
corporation to operate the Business, and to receive certain assets and
liabilities associated therewith;
WHEREAS, the Company desires and GTS has agreed that GTS
shall provide employee benefits to certain employees of the Company until the
time that the Company is prepared to sponsor its own benefits plans and
programs;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements and covenants contained herein, the parties hereto agree as
follows:
SECTION 1. Certain Defined Terms. The following terms shall
have the meanings defined for such terms in the Sections of this Agreement set
forth below:
"Separation Date" means such date as is mutually agreed in
writing by the parties hereto which shall be the date as of which GTS ceases to
provide benefits to the Transferred Employees under this Agreement.
"Transferred Employees" means all expatriate employees of the
Business who become employees of the Company as of the Effective Date.
SECTION 2. General Employment Matters. (a) As of the date of
this Agreement (the "Effective Date"), all Transferred Employees shall become
employed by the Company. Nothing in this Agreement shall give any Transferred
Employee any right to continued employment with the Company or GTS beyond the
Effective Date.
(b) As of the Effective Date, the Transferred Employees will
participate in each of the employee benefit plans (including, without
limitation, the GTS 401(k) plan, long-term disability plan, group life
insurance plan and medical benefit plans) which, immediately prior to the
Effective Date, cover the Transferred Employees (collectively, the "GTS Benefit
Plans"), it being understood that the GTS Benefit Plans do not include
compensation plans, such as any equity participation plans.
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(c) GTS shall take any steps necessary, including without
limitation, the amendment of the GTS Benefit Plans, to ensure that the terms of
this Section 2 may be carried out. In the event that, for any reason, the
Transferred Employees are not eligible to participate in any GTS Benefit Plan,
as of the Effective Date, GTS shall otherwise provide substantially equivalent
benefits to those that are unavailable through such GTS Benefit Plan to the
Transferred Employees.
(d) GTS shall take all necessary action to ensure that the
Company will be designated a "successor employer" for purposes of the GTS
Benefit Plans, in order that the Transferred Employees will not be deemed to
have had a separation of service from GTS or a termination of employment from
GTS merely because they are transferred to the Company.
(e) As of the Separation Date the Transferred Employees shall
cease to participate in the GTS Benefit Plans. Except as otherwise provided in
this Agreement, as of the Separation Date the Company shall establish "mirror"
plans that will provide the same level of benefits (as in effect immediately
prior to the Separation Date) for the Transferred Employees and their eligible
dependents and beneficiaries as those provided under the GTS Benefit Plans.
(f) Effective as of the Separation Date, Transferred
Employees shall no longer participate in the GTS 401(k) Plan, (the "401(k)
Plan"). Effective as of the Separation Date, the Company shall establish
pursuant to Section 2(e) above a "mirror" defined contribution plan intended to
be qualified under Sections 401(a) and 401(k) of the Internal Revenue Code of
1986, as amended (the "Code"), and related trusts intended to be exempt from
taxation under Section 501(a) of the Code. As soon as practicable following the
Separation Date, GTS shall cause to be transferred from the 401(k) Plan to such
defined contribution plan and related trust, as the Company shall direct,
assets equal to the account balances as of the Effective Date of the
Transferred Employees who participate in the 401(k) Plan (with subsequent "true
up" adjustment, if necessary). If necessary, GTS shall amend the 401(k) Plan to
fully vest accounts of all Transferred Employees as of the Separation Date.
(g) In connection with all employee pension benefit plans and
employee welfare benefit plans to be established by the Company pursuant to
this Agreement, the Company shall credit Transferred Employees for all periods
of service with GTS prior to the Effective Date for all purposes, to the same
extent that such service was credited under the applicable GTS Benefit Plan. In
addition, any welfare plan that the Company establishes hereto shall take
account of amounts credited against deductibles for 1999 prior to the
Separation Date under the corresponding GTS Benefit Plan, as well as of amounts
charged against out-of-pocket or other annual or other (including lifetime)
limitations under the corresponding GTS Benefit Plan prior to the Separation
Date. The Company will cause the waiver of any waiting periods or pre-existing
condition limitations or exclusions that otherwise might apply to Transferred
Employees (or their eligible dependents or beneficiaries) under the terms of
the "mirror" plans established pursuant to Section 2(e) or Section 2(f), to the
extent that such periods, limitations or exclusions would not have applied to
the Transferred Employees (and their eligible dependents and
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beneficiaries) had they continued to participate in the GTS Benefit Plans after
the Separation Date.
(h) From the Effective Date until the Separation Date, GTS
shall provide, or shall cause one or more of its divisions to provide, to the
Company the services related to the provision of benefits to the Transferred
Employees under the GTS Benefit Plans, including, without limitation, any
disclosure, reporting and other administrative requirements.
SECTION 3. Payments to GTS. Beginning on the Effective Date
and continuing until the Separation Date, the Company shall pay to GTS as
consideration for providing the Transferred Employees with the benefits
associated with the GTS Benefit Plans and the Related Services, a fee equal to
25% of the aggregate amount of all Transferred Employees' base salaries, as in
effect from time to time (the "Management Fee"), subject to adjustments as
agreed between GTS and the Company from time to time. It is understood that the
Management Fee shall be paid in connection with the actual costs of
administering such benefits and shall not be paid as compensation to GTS for
the services it provides for the Company in connection with the administration
of such benefits.. The Management Fee shall be paid to GTS in monthly
installments as soon as practicable after the last pay period for each month.
SECTION 4. General Matters. Except as otherwise expressly
provided herein, the Company shall be responsible for any and all employment,
compensation and benefit liabilities with respect to all Transferred Employees
(including but not limited to Transferred Employees who, as of the Separation
Date, are on leave of absence, long-term disability, short-term disability or
layoff with recall rights) and eligible dependents and beneficiaries of those
persons.
SECTION 5. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
applicable to contracts executed in and to be performed entirely within that
state.
SECTION 6. Headings. The article and section headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 7. Entire Agreement. This Agreement embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein and therein and supersede all prior agreements
and understandings between the parties with respect to the subject matter
hereof and thereof.
SECTION 8. Notices. All notices, requests, demands and other
communications provided for by this Agreement shall be in writing (including
telecopier or similar writing) and shall be deemed to have been given at the
time when mailed in any general or branch office of the United States Postal
Service, enclosed in a registered or certified postpaid envelope, or sent
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by Federal Express or other similar overnight courier service, addressed to the
address of the parties stated below or to such changed address as such party
may have fixed by notice or, if given by telecopier, when such telecopy is
transmitted and the appropriate answerback is received.
If to GTS:
Global TeleSystems Group, Inc.
0000 Xxxxxx Xxxxxxxxx
0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Copy to: General Counsel
If to the Company:
Golden Telecom, Inc.
c/o Golden Teleservices, Inc.
0000 Xxxxxx Xxxxxxxxx
0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Copy to: General Counsel
SECTION 9. No Third Party Beneficiaries. This Agreement shall
be binding upon and inure solely to the benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 10. Assignment. This Agreement or any rights or
obligations arising hereunder may not be assigned without the express written
consent of GTS and the Company (which consent may be granted or withheld in the
sole discretion of GTS and the Company).
SECTION 11. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument and shall become a
binding Agreement when one or more of the counterparts have been signed by each
of the parties and delivered to the other party.
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IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
GLOBAL TELESYSTEMS GROUP, INC.
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: Deputy General Counsel and
Assistant Secretary
GOLDEN TELECOM, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: General Counsel and Secretary
