EXHIBIT 4.38
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DATED 27 MAY 1999
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FLEXTECH plc (1)
XXXX XXXXXX (2)
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SERVICE AGREEMENT
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1
THIS AGREEMENT is made the 27 day of May One thousand nine hundred and ninety
nine
BETWEEN
(1) FLEXTECH plc ("the Company") whose registered office is at Xxx
Xxxxxxxxxx Xxxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxxxxxxxxx XX00 0XX
and
(2) XXXX XXXXXXXX XXXXXX ("the Executive") of 0 Xxxxx Xxxx, Xxxxx, Xxxxxxx,
Xxxxx XX0 0XX.
NOW IT IS HEREBY AGREED that the Company shall employ the Executive and the
Executive shall serve the Company upon and subject to the following terms and
conditions:-
1. Definitions and Interpretation
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1.1 In this Agreement
"the Act" means the Employment Rights Xxx 0000 (as amended)
"Associated Company" means a company which is from time to time a
subsidiary or a holding company (as those
expressions are defined by s.736 Companies Act
1985) of the Company or a subsidiary (other than
the Company) of a holding company of the Company
"Bank Holidays" means and includes any day upon which the banks in
England and Wales are not open for the transaction
of all normal banking business and (for the
avoidance of doubt) such term includes Saturdays
and Sundays and the term "Public Holidays" shall
have the same meaning as Bank Holidays
"the Board" means the board of directors from time to time of
the Company
"calendar month" means each period of one month beginning on the
first and ending on the last day of each month
"calendar year" means each period of one year beginning on 1st
January and ending on 31st December in the same
year
"the Companies Acts" means the Companies Acts 1985 to 1989
"the Group" means the Company and its Associated Companies
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"a Group Company" means a company within the Group
"Working Days" means any day other than a Saturday or a Sunday
which is not a Bank Holiday or a Public Holiday
1.2 Any reference to a statutory provision shall be deemed to include a
reference to any statutory modification or re-enactment of the same
from time to time
1.3 Clause headings are used for ease of reference only and shall not
affect the construction thereof
2. Term of the Appointment
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2.1 The employment of the Executive on the terms of this Agreement
commenced on 9th May 1997 and shall continue (subject to termination as
hereinafter provided) unless and until determined by either (a) the
Executive giving to the Company not less than twelve (12) months'
written notice of termination expiring on the last day of a calendar
month or (b) the Company giving to the Executive not less than
twenty-four (24) months written notice of termination expiring on the
last day of a calendar month
2.2 If the Executive's employment is terminated by either party pursuant to
clause 2.1 the Executive will have no right to work for the Company
during any period of notice (although the Company will have power to
require him to do so). If at the commencement of any period of notice
or at any time during the period of notice the Executive is informed
(whether by the Company or the Board) that he is not required to work
for the Company during the remainder of the notice period then he shall
become immediately entitled to receive in one lump sum the balance of
monies that would have been paid to him during such period of notice
had he worked for the Company during such period of notice and the
Executive shall, subject to the provisions of clause 9 below, be free
immediately to take up alternative employment
The Company may in its discretion whilst requiring the Executive to
remain an employee of the Company for the remaining period of notice
also require that he event the Executive's salary and other benefits
shall be provided to him in the normal course in accordance with the
terms of this Agreement
3. Duties of the Executive
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3.1 During the period of his employment hereunder the Executive shall serve
the Company as Executive Chairman and Chief Executive Officer of the
Company. The Executive shall be based at 000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxx
3.2 The Executive shall if so requested by the Board (without any further
remuneration than is hereinafter mentioned) perform such services for
any Associated Company and accept such offices in any Associated
Company as the Board may reasonably require
3.3 During the continuance of the employment hereunder the Board shall be
at liberty from time to time to appoint any other person to act jointly
with the Executive and in the event that the Executive is unable
through illness, accident or any other incapacity to carry out his
duties under this Agreement for any consecutive period of three months
the Company may (without prejudice to the provisions of clause 10)
temporarily employ any person or
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persons to perform those duties in the Executive's place until such
time as the Executive is able to resume the performance of his duties
3.4 The Executive shall unless prevented by injury or ill health devote the
whole of his time attention and abilities to the business of the
Company and shall well and faithfully serve the Company and the Group
3.5 The Executive shall carry out his duties hereunder between the hours of
9.00 am and 5.00 pm on normal Working Days and during such other hours
as may from time to time be necessary in order to fulfil properly his
duties hereunder and he shall not be entitled to extra remuneration for
work performed outside normal working hours
3.6 The Board shall have the right upon reasonable grounds from time to
time to vary the place of the employment of the Executive within
England and the Company shall in such event reimburse to the Executive
such removal and other expenses as the Executive may reasonably and
with the prior approval of the Board incur in consequence thereof
3.7 On termination of his employment under this Agreement the Executive
shall (unless the Company waives its right to receive his resignation)
give notice of resigning forthwith (without any specific claim for
compensation for ceasing to be a director) as a director of the Company
and from all offices and directorships held by him in any Associated
Company. In the event of such notice not having been received by the
Company within two days of the termination of the Executive's
employment hereunder, the Company is hereby irrevocably authorised to
appoint any director of the Company or its secretary for the time being
as the Executive's doing all things requisite to give effect thereto
4. Remuneration and Expenses
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4.1 The remuneration of the Executive shall be a fixed salary (inclusive of
any fees payable to him as a director of the Company or any Associated
Company) payable by equal monthly instalments in arrears on the last
day of each calendar month with such increments thereto as the Company
may from time to time determine. The Executive's salary at the date
hereof ii three hundred and sixty three thousand pounds per annum
((pound)363,000 p.a.)
4.2 The salary shall be reviewed by the Board during each calendar year of
the term of this Agreement and shall be increased (but not decreased)
with effect from 1st January in each such calendar year by such amount
as the Board shall in its absolute discretion determine
4.3 In addition to the salary paid to the Executive pursuant to clause 4.1
above the Executive shall be entitled to a bonus in respect of each
period ending 31st December of his employment by the Company (the
"Bonus"). The Bonus will be paid at the sole discretion of the Board.
The criteria for setting the Bonus may be reviewed each year
4.4 Further the Executive shall be entitled during the course of his
employment to benefits in line with the Company's policy from time to
time and comparable with the terms normally granted to similar status
employees in comparable companies in the United Kingdom (and to include
in any event medical insurance for the Executive, his wife and minor
children and permanent health/disability insurance and life assurance
for the Executive and participation in the Company's variable incentive
schemes including the Long Term Incentive Plan, Executive Share Option
Schemes, Sharesave Scheme and Equity Participation Plan) provided that
under no circumstances shall such benefits (including without prejudice
to the generality of the foregoing permanent health
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insurance, private medical insurance, life insurance and the right to
participate in the Company's Executive Share Option Schemes, Long Term
Incentive Plan, Sharesave Scheme and Equity Participation Plan) be less
than the benefits paid to the Executive at the date hereof
4.5 The Company shall reimburse to the Executive all reasonable travelling
hotel and other expenses incurred by him in or about the performance of
his duties hereunder (including any expenses incurred in attending
meetings of the Board or committees of the Board or general meetings of
the Company or of any Associated Companies) subject to such expenses
being submitted and evidenced in such manner as the Company shall
specify from time to time
4.6 The Company may reasonably request the Executive's spouse to accompany
the Executive on overseas engagements whereupon the Company shall
reimburse the Executive for actual and reasonable expenses incurred in
respect of or by the
4.7 The Company shall reimburse the Executive for all reasonable costs of
telephone and fax rental and usage
4.8 To allow the Executive to monitor programming the Company shall provide
and pay for at the Executive's residence appropriate television and VCR
facilities and in addition shall pay for and arrange the installation
of equipment necessary to allow reception of direct to home and/or
cable television and shall pay all subscriber fees relating thereto
5. Motor Car
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5.1 To assist him in the performance of his duties hereunder the Company
shall during the term of his employment hereunder (subject to his being
fully qualified to drive) provide the Executive with a motor car of a
model and type to be agreed between the Executive and the Deputy
Chairman (subject to its being suitable for use by a person of his
status) and at the Company's cost and expense shall permit him to use
it for his own private purposes including use on holidays
The Company shall from time to time at its own cost and expense replace
the same with another car of a type similar to and of a value
equivalent to the cost price of the original car (having regard to the
effects of inflation) and shall (subject as hereinafter provided) pay
the testing taxation insurance premiums and the running expenses of
such motor car including petrol lubrication maintenance and repairs
5.2 The Executive shall be permitted to use the said motor car on terms
that he shall
5.2.1 take good care of the car and ensure that it is kept in the
state and condition required by law and that the provisions
and conditions of any policy of insurance relating to it are
observed
5.2.2 return the car (or such replacement as aforesaid) and its keys
to the Company's principal place of business immediately upon
the termination of his employment hereunder save that if the
Executive's employment is terminated pursuant to clause 2.1
above he shall be entitled to retain and use the car on the
like terms as provided in this clause 5 for the period to the
date when the notice of termination expires or would have
expired but for the provisions of clause 2.2
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5.3 The Executive may elect to receive a cash allowance in such amount as
may be fixed by the Company (acting reasonably) in lieu of the
provision of a motor car under the provisions of this clause 5
6. Holidays and Holiday Pay
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6.1 The Executive shall be entitled (in addition to the normal Public and
Bank Holidays) to twenty working days' holiday in each calendar year
such holiday to be calendar year may be carried forward
6.2 On the cessation of the Executive's employment for whatever reason he
shall be entitled to accrued holiday pay in lieu of holidays not taken
at that date
7. Sickness
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7.1 The Executive will notify or cause to be notified the Company as soon
as he becomes unfit for work due to illness or injury. Failure to
notify will entitle the Company at its absolute discretion to withhold
payment of contractual and/or statutory sick pay
7.2 On each occasion the Executive is absent from work due to illness or
injury he will provide evidence to the Company that he was unfit for
work in accordance with the requirements of the Company from time to
time. A doctor's certificate will be required in case of illness or
injury lasting more than seven days
7.3 The Company shall be entitled during any period of incapacity of the
Executive to require the Executive to undergo a medical examination by
a doctor nominated by the Company which doctor shall be entitled to
report the result of any such examination to the Company and to the
Executive's own doctor
7.4 Subject to compliance with the foregoing provisions of this clause if
the Executive is at any time prevented by illness or accident or any
other medical incapacity from carrying out fully his duties hereunder
his salary will not cease to be payable by reason only of his
incapacity for work due to sickness or injury (unless the Executive's
employment hereunder shall have been terminated). The Company shall be
entitled to deduct from salary paid the maximum of any benefits to
which the Executive shall be entitled under the current Social Security
Acts whether or not he receives those benefits
8. Pension
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The Company will contribute a sum equivalent to between twelve (12) and
fourteen (14) percent of salary each year to a pension scheme. The
exact value of the Company's contribution will vary at the Company's
discretion according to the scheme chosen
9. Confidentiality and Other Interests and Restrictions After Termination
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9.1 In this clause 9 the following expressions shall have the following
meanings:
9.1.1 "Business" shall mean the business of the Group as carried on
immediately prior to the Termination Date;
9.1.2 "Prohibited Area" shall mean the United Kingdom:
9.1.3 "Protected Information" shall mean all information which is at
the Termination Date confidential in relation to the Business,
including for the avoidance of
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doubt all business, financial, operational, customer and
marketing information and trade secrets in relation to the
Business;
9.1.4 "Restricted Period" shall mean the period beginning on the
Termination Date and ending on the earlier of (first) the date
12 months from the Termination Date and (second) the date 24
months from the date of either party giving notice of
termination under clause 2.1;
9.1.5 "Termination Date" shall mean the date on which the employment
terminates irrespective of the cause or manner
9.2 Since the Executive is likely to obtain Protected Information in the
course of the employment and personal knowledge of and influence over
suppliers, customers and employees of the Company and Group the
Executive hereby agrees with the Company that in addition to the other
terms of this Agreement and without prejudice to other restrictions
imposed upon him by law, he will, save with the prior written consent
of the Company, be bound by the covenants contained in clauses 9.3 to
9.7
9.3 The Executive hereby undertakes that he will not during the Restricted
Period, and within the Prohibited Area either solely or jointly or in
partnership or association with or as director, manager, agent,
employee, consultant, servant or representative of or for any other
person, firm or company directly or indirectly carry on or be engaged
or concerned or interested in any business competing with the Business
provided that nothing contained in this clause shall preclude the
Executive from holding any shares or loan capital (not exceeding three
per cent of the shares or loan capital of the class concerned then in
issue) in any company competing with the Business whose shares are
listed or dealt in on a recognised investment exchange
9.4 The Executive hereby undertakes that he will not during the Restricted
Period directly or indirectly interfere with or endeavour to interfere
with, either on his own behalf or for any other person, firm, company
or other undertaking competing with the Business, the business
relationship between a Group Company and any customer or supplier
therefor or the business relationship between any Group Company and any
joint venture partner thereof
9.5 The Executive hereby undertakes that he will not during the Restricted
Period either on his own behalf or for any person, firm, company or
other undertaking directly or indirectly solicit or endeavour to entice
away from the Company or any Group Company any person who is an
employee, director, officer, agent or consultant of the Company or any
Group Company at the Termination Date
9.6 The Executive hereby undertakes that he will not following the
Termination Date, directly or indirectly, divulge or make use of any
Protected Information in relation to do so by a court of competent
jurisdiction
9.7 Provided that, notwithstanding anything herein contained, the
provisions of sub-clauses 9.3, 9.4 and 9.5 shall not apply in
circumstances where this Agreement is terminated by the Executive
pursuant to sub-clause 10.1 hereof
10. Termination of employment
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10.1 Either the Executive of the Company may terminate this Agreement
immediately if the other party is in material breach of the terms
hereof
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10.2 The Company may at any time by notice in writing to the Executive
forthwith terminate his employment and the Executive shall have no
claim against the Company in respect of such termination if the
Executive shall:
10.2.1 be guilty of any fraud or gross default or misconduct in
connection with or affecting the business of the Company or
any Associated Company or be convicted of any criminal offence
(other than a motoring offence not resulting in a custodial
sentence) or
10.2.2 be guilty of conduct tending to bring him the Company or any
Associated Company into disrepute or
10.2.3 become bankrupt or compound or make any arrangement with his
creditors or
10.2.4 become of unsound mind or a patient for the purpose of any
statute (or any part thereof) relating to mental health
10.3 The termination of the Executive's employment shall be without
prejudice to any other remedy the Company may have if the termination
is caused by the Executive's breach of any term of this Agreement
10.4 The rights of the Company under this clause are without prejudice to
any other right it may have at law to terminate the Executive's
employment
10.5 Upon the termination of the Executive's employment for whatever reason
the Company will be entitled to deduct from any payments then due or
becoming due to the Executive (whether in respect of any period before
such termination or not) any monies which may then be or become due or
may become due thereafter from the Executive to any company within the
Group
10.6 In the event of this Agreement being determined by reason of the death
of the Executive the personal representatives of the Executive shall be
entitled to a proportion calculated pro rata temporis of his salary up
to the date of such determination
10.7 liquidation of the Company for the purpose of amalgamation or
reconstruction or as part of any arrangement for the amalgamation of
its undertaking not involving liquidation and the Executive shall be
offered employment with the amalgamated or reconstructed company on
terms not less favourable to him (including title and comparable
responsibilities and status) than the terms of this Agreement then the
Executive shall have no claim against the Company in respect of the
termination of his employment by the Company hereunder and previous
employment of the Executive with the Company prior to such amalgamation
or reconstruction shall be counted as part of the Executive's
continuous period of employment for the purposes of the Act
10.8 If this Agreement is terminated by the Executive pursuant to clause
10.1 above the Executive shall be entitled in lieu of any salary due
after the date of termination to a cash payment equal to twenty four
(24) months salary
11. Disciplinary Rules
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11.1 The terms of this Agreement constitute the disciplinary rules to which
the Executive is subject. If the Executive is dissatisfied with any
disciplinary decision or has any grievance relating to his employment
hereunder he should initially address himself to the
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Deputy Chairman for the time being of the Company or such other person
as the Board shall from time to time direct in writing to the Executive
If after such initial action the Executive wishes to pursue the matter
further he should refer the matter in writing to the Board
11.2 The Company reserves the right in any appropriate case to suspend the
employment of the Executive with or without payment of remuneration. If
the Executive's employment is terminated during or immediately
following any period of suspension without remuneration the Executive
shall not be entitled to receive remuneration in respect of discretion
the period of suspension unless the Board in its discretion otherwise
resolves
12. Particular of Employment
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The employment of the Executive hereunder shall also be subject to the
terms set out in the Schedule which is added in accordance with the
requirements of Part 1 of the Act
13. Assignment
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13.1 The benefit and burden of this Agreement will devolve upon and be
enforceable by and against the Company's successors and assigns
13.2 For the purposes of this Agreement the Company will be entitled to
carry out its obligations as to payment of remuneration and otherwise
through such one or more of the companies within the Group as the Board
may from time to time expressly determine and the Company may enforce
the provisions of this Agreement either
14. General
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14.1 Notwithstanding the termination or expiry of the Executive's employment
hereunder the provisions of this Agreement shall remain in full force
and effect in accordance with their terms for so long as may be
necessary to give effect thereto
14.2 No amendment to this Agreement or other agreement between the Company
and the Executive as to the terms of employment of the Executive shall
be legally binding on either of them unless and until such amendment or
agreement is confirmed in writing and signed by both the Executive and
a duly authorised officer of the Company
14.3 Any notice required to be served hereunder may be served personally or
by being sent by recorded delivery in the case of a notice to the
Executive to his address mentioned above or his last known home address
and any such notice shall be deemed to have been served at the time of
delivery in the case of personal service or at the expiration of 48
hours after it is posted
14.4 This Agreement shall be governed by English law which shall be the
proper law thereof in all respects
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IN WITNESS whereof this Agreement has been executed by the Company and the
Executive on the day and year first above written
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SCHEDULE 1
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Statement of terms of employment
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1. Amplification of terms of employment:
(a) Name of the employer: FLEXTECH plc
(b) Address of the employer: Xxx Xxxxxxxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxxxxxxxxxxxx XX0X 0XX
(c) Name of the Executive: XXXX XXXXXXXX XXXXXX
(d) Address of the Executive: 0 Xxxxx Xxxx, Xxxxx, Xxxxxxx, Xxxxx,
XX0 0XX
(e) Date of commencement of continuous employment: 9th May 1997
No period of employment with a previous employer counts as
part of the Executive's continuous period of employment with
the Company
(f) Remuneration - See clause 4:(pound)363,000 per annum payable
in monthly instalments in arrears
(g) Notice: See clause 2
(h) Job Title: Executive Chairman
(i) Hours of Work: There are no fixed hours of work - see clause 3
of the Agreement
(j) Holidays: See clause 6 of the Agreement
(k) Sickness or injury: See clause 7 of the Agreement
(l) Other benefits: See clauses 4, 5, and 8
2. The following information is supplied pursuant to the Act and reflects
the Company's current practice
(a) Disciplinary Rules. There is no formal disciplinary procedure
applicable to this employment. The Executive shall merely be
expected to exhibit a high standard of propriety in all his
dealings with and in the name of the Company and the
Associated Companies
(b) Grievance Procedure: See clause 11
(c) Appeals Procedure: As 3(b) above
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SIGNED by )
for and on behalf of )
FLEXTECH plc ) /s/ Flextech plc
in the presence of: )
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
SIGNED by the said )
XXXX XXXXXXXX XXXXXX ) /s/ Xxxx Xxxxxx
in the presence of:
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
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SERVICE AGREEMENT BETWEEN
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FLEXTECH plc and XXXX XXXXXX DATED 27 MAY 1999
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The following amendments apply to the Schedule to the Agreement:
Job Title: Chairman and Chief Executive
Remuneration: With effect from 1 January 2000 the fixed
remuneration payable was increased to(pound)400,000
per annum.
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