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EXHIBIT 10.31
EMPLOYMENT CONTRACT
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BETWEEN:
Completel SAS, a French societe par actions simplifiee with capital
of 51,358,920 (euro), registered with the Registry of Commerce and Companies
of Nanterre under the number 418 299 699, with its registered office located
at Tour Egee, 0-00 xxxxx xx x'Xxxxx, 00000 Xxxxxxxxxx Xxxxx, represented by
Mr. Jehan Coquebert xx Xxxxxxxx, acting as CEO of the Company,
hereinafter referred to as the "Company",
ON THE ONE HAND,
AND:
Xx. Xxxxxx xx Xxxxx, residing at 00 xxxxxxxxx Xxxxxxxx, 00000 Xxxxx. Social
Security number 0 00 00 00 000 000 00,
hereinafter referred to as "Xx. xx Xxxxx",
ON THE OTHER HAND,
hereinafter collectively referred to as "the Parties",
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1 - ENGAGEMENT
The Company engages Xx. xx Xxxxx as of June 1, 2002, as Managing Director
(Directeur General), an executive position, according to the terms and
conditions set forth below, subject to the results of a medical examination.
ARTICLE 2 - DURATION OF CONTRACT, PRIOR CONTRACTS
The present contract is entered into for an unspecified period of time.
The seniority of Xx. xx Xxxxx acquired within the group to which the Company
belongs since December 22, 1998 is carried over and incorporated in the
present contract.
The present contract replaces and cancels all previous contracts and
amendments concluded between Xx. xx Xxxxx and the Company or other companies
in France of the group to which the Company belongs. Consequently, only this
contract and its eventual amendments are valid and effective between the
Parties.
ARTICLE 3 - FUNCTIONS
As Managing Director, Xx. xx Xxxxx will be responsible for accomplishing, in
particular, the following functions:
- Proposal to the Company's directors (his "Superiors") of the
definition and the orientation of the policy of development of the
operations of the Company at the European level, and especially in
France; implement this policy within the strict framework of the
approval given by his Superiors on the proposals thus formulated, and
of any instructions given at any and all times;
- Control and supervision of the activity of the central functional
departments related to operations and, in particular, the financial,
legal, HR, data processing, engineering and purchasing departments,
the directors of which will report to Xx. xx Xxxxx, who will in turn
report to his Superiors;
- Follow-up of the execution of the commercial and financial objectives
of the Company in terms of operations, as defined by his Superiors.
The duties entrusted to Xx. xx Xxxxx have, by nature, of an evolving character
in accordance with, on the one hand, the requirements of the Company to adapt
to its needs and, on the other hand, with the development of the career of Xx.
xx Xxxxx.
These duties will be exercised by Xx. xx Xxxxx under the authority and within
the framework of the instructions given by his Superiors, currently Mr. Jehan
Coquebert xx Xxxxxxxx, in his capacity as CEO of the Company or any other
person designated by the Company for this purpose, at any time.
Xx. xx Xxxxx will provide precise reports on his activities to his Superiors,
in particular on a monthly basis. Xx. xx Xxxxx must act with respect and
within the limits of the instructions and directives given to him by his
Superiors.
ARTICLE 4 - PLACE OF WORK
Xx. xx Xxxxx will exercise his functions principally at the headquarters of
the Company, currently located in Courbevoie.
It is however expressly agreed that Xx. xx Xxxxx'x duties may require many
business trips both in France and abroad. He will be reimbursed for any travel
expenses so incurred in accordance with the provisions of Article 9.2 of this
contract.
It is expressly recognized and accepted by Xx. xx Xxxxx that the Company can
relocate the principal center of Xx. xx Xxxxx'x activities, without
considering such a move as constituting a substantial modification of his
employment contract and without the right to any indemnity, with the exception
of relocation allowances which will be established according to the conditions
of and by reference to Article 6-4-1 of the Collective Bargaining Agreement
for the Telecommunications Industry.
This mobility covers all the geographic area in which the Company exercises
its activities.
In addition, a transfer of the headquarters of the Company does not constitute
a substantial modification of the employment contract of Xx. xx Xxxxx.
Xx. xx Xxxxx expressly recognizes that the provisions of this Article 4 are of
significant importance to the Company and that it would not have entered into
this contract if these provisions had not appeared therein.
If the Company establishes, according to the present Article 4, the center of
activity of Xx. xx Xxxxx outside the national territory, Xx. xx Xxxxx must
continue to benefit from an overall level of social guarantees equivalent to
those in France with regard to coverage of risks of disability, death, work
accidents, incapacity and job loss. Concerning retirement, Xx. xx Xxxxx must
globally maintain a level of rights equivalent to those which he would have
acquired if he had remained in France, in terms of the mandatory provisions
for retirement and supplementary pensions.
ARTICLE 5 - REMUNERATION
Article 5.1 - Fixed Remuneration for 2002 and 2003
In payment for his services, Xx. xx Xxxxx will receive a gross base annual
fixed salary of 248,000 (two hundred forty-eight thousand) Euros. This salary
will be paid at the end of each month, in 12 gross monthly payments of
20,666.67 Euros. This annual fixed remuneration will be prorated taking into
account the execution of the present contract at mid-year.
Article 5.2 - Fixed Remuneration for 2004
It is hereby agreed between the Parties that the gross base annual fixed
remuneration of Xx. xx Xxxxx will be 338,000 (three hundred thirty-eight
thousand) Euros beginning as of January 1, 2004. These wages will be paid at
the end of the each month in 12 gross monthly payments of 28,166.67 Euros.
Article 5.3 - Variable Bonus for 2002
For the year 2002, Xx. xx Xxxxx will benefit from a variable bonus if he
obtains the objectives set forth hereafter. The base of calculation of this
variable bonus is 300,000 Euros gross. Although Xx. xx Xxxxx is a salaried
employee of the Company, the Parties agree that the accounts of Completel
Europe NV constitute the most relevant measurement of his performance, the
financial situation of the Company having a very significant impact on the
accounts of Completel Europe NV.
Calculation Key / Objectives:
1. 20% of the base (60,000 (euro) gross) will exceptionally constitute a
guaranteed amount, independent of the achievement of objectives. In
the case of termination of the present contract during the course of
2002, only the variable bonus, as set forth in the present paragraph,
will be payable, excluding the variable bonus mentioned in the
following paragraph. The variable bonus set forth in the present
paragraph will be payable with the salary of January 2003.
2. 80% of the base (240,000 (euro) gross) will only be due if both of
the two following conditions are met: (i) the consolidated cash flow
of Completel Europe NV as of December 2002 exceeds an amount X minus
(euro)12.3 million, where X is the net value of the contribution in
cash related to the new issue of capital during the financial
reorganization of the Company led in 2002, and (ii) Completel Europe
NV attains for the entire fourth quarter 2002 an adjusted EBITDA
equal to or greater than (euro)(0.7) million.
The variable bonus set forth in the paragraph above will not be due
if both objectives foreseen above are not achieved. The variable
bonus set forth in the paragraph above will be payable at the end of
the month following the end of the financial accounts of Completel
Europe NV.
Article 5.4 - Variable Bonus for 2003
For the year 2003, Xx. xx Xxxxx will benefit from a bonus variable as a
function of his achievement of the objectives fixed between the Parties, after
approval by the board of Completel Europe NV at the latest on March 31, 2004.
The basis of calculation of this variable bonus is 350,000 (euro) gross. This
variable bonus will be paid at the latest by the end of the month following
the closure of the financial accounts of Completel Europe NV.
Principals of calculation:
1. There will not be any guaranteed variable bonus.
2. However, part(s) of the variable bonus will be partially due if the
objectives determined by the Parties are partially achieved on their
date of appreciation according to the criteria fixed by and between
the Parties at the time of the establishment of the objectives. These
criteria will also be applied in the case of a termination of this
contract during the course of the year.
3. The Parties agree that in the case where they would not be able to
agree on the objectives and criteria of calculation of the variable
bonus for 2003 at the latest by January 31 of the year in question,
the amount due in terms of the variable bonus will be calculated in a
flat-rate fashion as 100% of the variable bonus received for the year
preceding such disagreement (with no commitment as to the existence
of any eventual variable bonus for following years).
ARTICLE 6 - WORKING HOURS, VACATION
Taking into account the role of Xx. xx Xxxxx as a managing executive, within
the meaning of Article L. 212-15-1 of the French Labor Code (Code de Travail)
and insofar as he retains a long-term technical command of operations and is
able to make decisions in a largely autonomous way, enjoys significant
independence in the organization of his schedule and receives one of the
highest levels of remuneration paid by the Company, his remuneration is
considered to be lump-sum, without other reference. Consequently, Xx. xx Xxxxx
is not subject to regulations regarding the duration of work and, in
particular, to regulations concerning overtime.
Xx. xx Xxxxx will receive paid vacation in accordance with current applicable
legislation. The period of vacation of Xx. xx Xxxxx will be determined by a
mutual agreement between his Superiors and Xx. xx Xxxxx, taking into account
job requirements.
ARTICLE 7 - TERMINATION
Article 7.1 - Notice
The present contract can be terminated at any time by either of the Parties by
giving a three-month notice according to the conditions set forth by the
current regulations and the provisions of any applicable collective bargaining
agreement. No notice will be necessary in the event of dismissal for serious
or significant misconduct.
Article 7.2 - Termination Indemnity
Because of the exposure of Xx. xx Xxxxx, of his personal investment in his new
functions and of the harmful consequences that a rupture of this contract,
brought in certain cases as defined hereafter, would be likely to generate in
terms of his public image and to his reputation with regard to his
professional relationships or possible future employers, the Parties consider
that the potential moral and career-related prejudice caused to Xx. xx Xxxxx
will be repaired by a contractual termination indemnity equivalent to:
1. 262,500(euro)if the notification of his dismissal comes during 2002
or 2003; 330,000(euro)if the notification of his dismissal comes
after December 31, 2003;
and:
2. Nine-twelfths of the annual maximum variable bonus in effect at the
time of the notification of dismissal of Xx. xx Xxxxx.
4. The provisions of this Article 7.2 are effective without prejudice to
the amount of the variable bonus possibly due to Xx. xx Xxxxx
pursuant to Article 5.4.2(degree)(rupture of the contract in the
course of year).
The present Termination Indemnity will be due in the three following cases:
1. Notification of dismissal to Xx. xx Xxxxx for a reason other than a
serious or significant fault.
or:
2. Notification of resignation by Xx. xx Xxxxx, as of the effective date
of a change in the essential conditions of the exercise of his
salaried activity.
A change in the essential conditions of the salaried activity is
defined as (i) a real reduction of the powers, responsibilities or
functions of Xx. xx Xxxxx, or a demotion, with respect to his title,
(ii) the instruction given to Xx. xx Xxxxx to carry out tasks
obviously not in conformity with the level of functions and
responsibilities which he usually assumes, or (iii) the characterized
failure of the Company to fulfill one of the essential obligations of
this contract, in particular the non-payment on the applicable dates
of the various amounts which are set forth therein.
However, the mistakes or omissions of the Company made in good faith
are excluded except if Xx. xx Xxxxx submits a written complaint to
the Company and the Company does not resolve such complaint within 30
days of receipt of the aforementioned written notice thereof;
or:
3. Notification of resignation by Xx. xx Xxxxx, as of the effective date
of a change of control and during the six following months.
A change of control is considered to take place when (i) one or more
of the persons or entities which do not hold as of September 30, 2002,
directly or indirectly, at least 10% of the capital of Completel
Europe NV or Completel SAS, suddenly acquires shares having the
effect of conferring to them, directly or indirectly, the possession
of more than 50% of the shares issued by Completel Europe NV or
Completel SAS or more than 50% of the voting rights, (ii) following a
merger, acquisition or transfer of the entirety or a substantial
portion of the assets of Completel Europe NV or Completel SAS, the
shareholders of Completel Europe NV or of Completel SAS as of
September 30, 2002 no longer hold directly or indirectly at least 50%
of the authorized capital of the absorbing, acquiring or transferring
company, or (iii) the members of the Supervisory Board of Completel
Europe NV as of September 30, 2002 cease to hold the majority of this
Board, except for the members who would be elected or nominated by
the Board as of September 30, 2002.
It is understood between the Parties that any potential change(s) of
control that may take place up to September 30, 2002 inclusive, do
not constitute a case for application of the present clause.
Insofar as contributions, charges or other deductions due by Xx. xx Xxxxx
would be applicable, the amount of the Termination Indemnity is expressed as a
gross amount.
The amount of the Termination Indemnity will include any indemnity for
dismissal due under labor agreements and any other indemnity of a similar
nature. However, it will not include any additional indemnity (compensation)
for notice of dismissal or for paid vacation due.
The notices mentioned in this Article 7 will be made by registered letter with
verification of receipt, except legal, conventional, contractual or other
provisions, and will be effective at the date of first presentation.
ARTICLE 8 - OBLIGATIONS
Article 8.1 - Exclusivity
Xx. xx Xxxxx agrees to devote all his time and his professional activity to
the Company and to exercise any diligence necessary to the achievement of his
duties.
To this effect, throughout the duration of this contract, Xx. xx Xxxxx shall
not demonstrate any interest or become involved directly or indirectly in any
other company or professional activity, except with the prior written
agreement of the Company. In the same manner, Xx. xx Xxxxx shall not
demonstrate any interest or become involved directly or indirectly in any
activity likely to compete in any fashion with the activities of the Company,
except with the prior written agreement of the Company.
Article 8.2 - Confidentiality, Discretion, Publications
Xx. xx Xxxxx undertakes not to disclose, communicate, or to allow to be
disclosed or allow to be communicated, as well as not to use directly or
indirectly confidential information or knowledge of any kind, of which he will
have gained knowledge during or within the framework of the exercise of his
activity for the Company, in particular concerning the customers, the
commercial, financial or administrative data, the products, the plans, the
know-how, the research, the development and the business of the Company or of
one of the companies of the group to which it belongs, in general.
Moreover, Xx. xx Xxxxx shall take all necessary precautions to assure that no
unauthorized third party may access any document carrying confidential
information.
This undertaking is binding for the duration of this contract as well as
following its termination so long as the information in question is maintains
its confidential nature.
Conscious of the risks that a breach of confidentiality could involve for the
Company and the companies of the group to which it belongs, Xx. xx Xxxxx
hereby declares himself bound, in this regard, by an absolute professional
secrecy.
Xx. xx Xxxxx agrees not to publish, in any form, any study, collection of data
or information, in particular based on the work carried out on behalf of the
Company or any of its clients, except with the prior written consent of the
Company.
Article 8.3 - Restitution and Usage of Company Assets
All assets, material and documentary support which the Company may entrust to
Xx. xx Xxxxx upon or for the performance of his duties, in particular any
files, documents, correspondence, manuals, books, keys and access devices,
automobile papers, check books and other items, will remain the property of
the Company and will have to be returned to it upon simple request.
Xx. xx Xxxxx shall not put these assets to any other than professional use and
shall not make copies or reproductions of them for his personal use or for any
other use, except with the express authorization of the Company.
Moreover, Xx. xx Xxxxx expressly agrees to return the aforementioned assets,
materials and supports as well as any copy or reproduction thereof on his last
effective working day, without any formal request or notice by the Company.
Article 8.4 - Illicit Practices and Ethical Principles in the Course of Business
Xx. xx Xxxxx recognizes having received a copy of the American regulations on
corruption(1), as far as they comply with French law, and has read and
understood them. Xx. xx Xxxxx agrees to conform to all aspects of these
regulations and, in particular, not to make any payment nor offer to make nor
to have offered or effectuated any payment, nor to give any object of value,
directly or indirectly, to any official of the French or any other government
or of a political party with the aim of influencing a decision in order to
obtain a market on behalf of any person.
Moreover, Xx. xx Xxxxx confirms that if he had knowledge of or suspected such
a payment, such an offer or an agreement aiming at such a payment to an
official representative of a government, a political party or a candidate in
order to obtain a market for the Company or any of the other companies of the
group, he would inform the Company immediately.
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(1) As far as they comply with French law.
Article 8.5 - Non-Solicitation
Xx. xx Xxxxx agrees, except with the prior written consent of the Company, for
a two-year period after the termination of this contract, whatever the cause,
not to discharge, to offer employment or to employ in any manner, any person
which would have been, during two years preceding the termination of this
contract, employed by the Company or involved in talks to be engaged by the
Company.
Article 8.6 - Non-Competition
In accordance with Article 4-2-4-1 of the applicable collective bargaining
agreement, Xx. xx Xxxxx agrees, in the event of termination of his employment
contract for any reason, from the date of this suspension, not to enter into
the service of a competing company or to take interest in, directly or
indirectly, any form or with any title or in any quality, any local
telecommunications operator or one considered as such, or with any provider of
Internet lodging services.
This non-competition clause applies to the French territory.
The duration of prohibition will be one year from the termination of the
present contract.
The present non-competition clause shall apply to any rupture of this
employment contract occurring as early as the date of the start of activity
set forth in the "Engagement" article above.
The Company may release Xx. xx Xxxxx from this obligation of non-competition
by notifying him of the release in the 15 calendar days following the
notification of dismissal or the resignation, or from the effective departure
date from the Company in the case of a termination of the employment contract
other than in case of dismissal or resignation.
In the case of dismissal, except for serious or significant fault, and in the
case of resignation, if the clause has not been lifted, a flat-rate indemnity
will be paid to Xx. xx Xxxxx.
The total gross amount of this indemnity will be equal, by express agreement
between the Parties, to 262,500 (euro) gross if the rupture of the employment
contract takes place during 2002 or 2003; it will be equal to 330,000 (euro)
gross if the rupture takes place after December 31, 2003.
The indemnity will be paid in four payments, at the end of each quarter, upon
presentation of a proof (employment contract, payroll slip or unemployment
certificate).
Penalty Clause:
In the case of violation of the present clause of non-competition on the part
of Xx. xx Xxxxx, he will be obliged to pay the Company a fixed flat-rate
penalty equal to six months of his last fixed gross monthly salary payment.
This sum will be due for each noted infringement without notice from the
Company to cease from the forbidden activity. The payment of this sum to the
Company shall not prohibit the Company to exercise its right to a court order
demanding the suspension of the competition occurring in violation of the
provisions above.
ARTICLE 9 - BENEFITS AND MISCELLANEOUS EXPENSES
Article 9.1 - Company Car
Xx. xx Xxxxx will have the benefit of a company car, for his professional
needs as well as for his personal needs, in accordance with the conditions of
use of the vehicle in effect within the Company and the group to which it
belongs. The Company will pay insurance for this vehicle. The use of this
vehicle for personal needs by Xx. xx Xxxxx constitutes a benefit in kind under
the terms of the applicable social and tax legislation.
The reimbursement of expenses by the Company is limited to recurring and
reasonable expenses, bound exclusively to the professional use of the vehicle.
Such reimbursement is limited to maintenance expenses and to an amount of 600
(euro) TTC per month, reimbursement of the price of gas consumed during
exclusively professional use not included in this amount.
Xx. xx Xxxxx must inform the Company as soon as possible within a maximum of
48 hours of any event happening to this vehicle so that the Company can take
the necessary measures.
Xx. xx Xxxxx undertakes to keep this vehicle in perfect condition. Upon the
termination of the present contract, Xx. xx Xxxxx commits himself to returning
this vehicle to the Company by bringing it immediately to the headquarters of
the Company and returning the papers and the keys in the same perfect
condition.
Article 9.2 - Expenses
Xx. xx Xxxxx will have the right to reimbursement, upon submission of
appropriate proof and after approval of the Company, of all professional
expenses engaged by him for the exclusive needs of the performance of his
duties as stipulated by the present contract.
Article 9.3 - Fees for Accounting and/or Tax Advice
The Company will reimburse Xx. xx Xxxxx, upon proof, for accounting and/or tax
advice fees that he may engage, up to a limit of 7,500(euro)all incl. per
year. This reimbursement may constitute, in certain cases, an additional
remuneration under the terms of the applicable social and tax legislation
applicable.
ARTICLE 10 - DECLARATIONS
10.1 - Xx. xx Xxxxx formally declares that as of the effective date of the
present contract, he is not tied to any company and is free of any and all
engagement or any and all non-competition clauses, in accordance with the
applicable employment legislation and regulations.
10.2 - It is expressly recognized and accepted by Xx. xx Xxxxx that any change
in the organization of the Company or its structure which affects his
Superiors and/or the subordinates of Xx. xx Xxxxx does not constitute a
substantial modification of his employment contract. The present provision is
without prejudice to the provisions of Article 7.2.
10.3 - For all rights and obligations which are not the subject of a provision
of this contract, the provisions of the national collective bargaining
agreement for the telecommunications industry or any collective agreement
which would be substituted therefor shall apply. Xx. xx Xxxxx recognizes that
any change of the collective agreement linked to a change of the principal
activity of the Company does not constitute a change of his employment
contract.
At the time of signature of the present contract, Xx. xx Xxxxx holds the
classification "outside classification" within the meaning ascribed to it by
the above-mentioned collective agreement.
10.4 - Xx. xx Xxxxx agrees to inform the Company without delay of any change
concerning any of the situations which he indicated at the drafting of the
present contract.
10.5 - The present contract is subject to French law and regulations.
Executed in two originals,
In Courbevoie, July 16, 2002
_____________________ _______________________
Xx. Xxxxxx xx Xxxxx * Mr. Jehan Coquebert xx Xxxxxxxx *
For Completel SAS
* Signature must be preceded with the handwritten phrase "Read and approved,
good for agreement."
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ENGAGEMENT ANNEX TO THE EMPLOYMENT CONTRACT
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BETWEEN:
Completel SAS, a French societe par actions simplifiee with capital
of 51,358,920(euro), registered with the Registry of Commerce and Companies of
Nanterre under the number 418 299 699, with its registered office located at
Tour Egee, 0-00 xxxxx xx x'Xxxxx, 00000 Xxxxxxxxxx Xxxxx, represented by Mr.
Jehan Coquebert of Xxxxxxxx, acting as CEO of the Company,
hereinafter referred to as the "Company",
ON THE ONE HAND,
AND:
Xx. Xxxxxx xx Xxxxx, residing at 00 xxxxxxxxx Xxxxxxxx, 00000 Xxxxx,
registered with social security under the number 0 00 00 00 000 000 00,
hereinafter referred to as "Xx. xx Xxxxx",
ON THE OTHER HAND,
hereinafter collectively referred to as "the Parties",
NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1
The Parties have agreed that a gross sum equal to 6,000 (euro) per month will
be paid to Xx. xx Xxxxx (paid prorata temporis in the case of an incomplete
month), as of June 1, 2002, until the Company provides Xx. xx Xxxxx with
housing. Provision of housing must be effected at the latest by November 1,
2002, the date on which the payment of this amount will stop, notwithstanding
the situation at that time. This housing provision will be made official in an
amendment to the employment contract of Xx. xx Xxxxx.
This amount shall constitute a supplemental remuneration to be included in the
pay slip of Xx. xx Xxxxx as "exceptional bonus."
ARTICLE 2
The Parties have agreed that Xx. xx Xxxxx will receive as of August 1, 2002 an
exceptional bonus of 10,000(euro).
Executed in two originals,
In Courbevoie, July 16, 2002
________________________ __________________________
Xx. Xxxxxx xx Xxxxx * Mr. Jehan Coquebert xx Xxxxxxxx*
For Completel SAS
* Signature must be preceded with the handwritten phrase "Read and approved,
good for agreement."
