Exhibit 10.1
Effective 11 September 2001
CARRIER 1 UK LIMITED
CARRIER1 INTERNATIONAL S.A.
- AND -
XXXXXX XXXXXXX XXXXXXX
THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated 27 September, 2001 and is
effective as of 11 September 2001
BETWEEN:-
(1) CARRIER 1 UK LIMITED whose registered office is at 0 Xxxxxxx Xxxxxxxx
Xxxxxx, Xxxxxx, X000XX (the "COMPANY"), which is the employer under this
Agreement;
(2) CARRIER1 INTERNATIONAL S.A., c/o Carrier1 International GmbH,
Xxxxxxxxxxxxxx 00, 0000 Xxxxxx ("CARRIER1 SA"), which is a Luxembourg
societe anonyme and the parent of the Company; and
(3) XXXXXX XXXXXXX XXXXXXX (the "EXECUTIVE"), who is the employee under this
Agreement.
WHEREAS, the Executive has previously served as a senior executive in the
telecommunications and technology sectors and the Company and Carrier1 SA desire
to secure the services of the Executive as Chief Executive Officer and member of
the Board of Directors; and
WHEREAS, in order to induce the Executive to accept employment, and to address
certain forfeitures that will arise as a result of the Executive's termination
of employment with his current employer, the Company has agreed to provide the
remuneration set forth herein (and object to the terms and conditions hereof): -
THE PARTIES AGREE AS FOLLOWS: -
1. DEFINITIONS
In this Agreement unless the context otherwise requires:-
"AFFILIATED COMPANY" as to the Company means a company that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the Company, including a subsidiary of the
Company, a company of which the Company is a subsidiary, or another subsidiary
of a company of which the Company is also a subsidiary, where the term "control"
(including the terms "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a company, whether through the ownership
of voting securities, by contract or credit arrangement, as trustee or executor,
or otherwise;
"BOARD" means the board of directors from time to time of the Company;
"BUSINESS DAY" means any day other than a Saturday, a Sunday, a holiday or a
vacation day;
"CARRIER1 SA BOARD" means the board of directors from time to time of Carrier1
SA;
"CHANGE OF CONTROL" means the first to occur of the following: (i) the
consummation of a single transaction or series of related transactions as a
result of which a "person" or "group" (within the meaning of Section 13(d) or
14(d)(2) under the Exchange Act) becomes the ultimate "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of more than 35% and such
ownership represents a greater percentage of the total voting power of the
Voting Stock of Carrier1 SA, on a fully diluted basis, than is held by Permitted
Holders on such date, (ii) consummation of a merger or consolidation as a result
of which the Persons who own voting equity securities of the Company or Carrier1
SA prior to such transaction(s) shall own less than 65% of the voting securities
of the surviving Person or its direct or indirect parent, or (iii) the sale or
other disposition of all or substantially all of the assets of Carrier1 SA
(determined on a consolidated basis);
"CREATIVE WORK" means any work in which copyright or unregistered design right
may subsist in any media (including but not limited to electronic materials);
"EVENT OF DEFAULT" means an act that constitutes an Event of Default hereunder
as set forth in Clause 10;
"GROUP COMPANY" means the Company and its affiliated companies, and "Group"
means all of such companies taken together;
"INTELLECTUAL PROPERTY" means patents, trade marks and service marks, rights in
designs, trade or business names, copyrights (including rights in computer
software), whether or not registered and including applications for (and the
right to apply for) registration of any such thing, and all rights or forms of
protection of a similar nature or having equivalent or similar effect to any of
these which may subsist anywhere in the world for the full period thereof and
all extensions or renewals thereof;
"INVENTION" means any invention, idea, discovery, development, writing, design,
drawing, improvement or innovation whether or not patentable or capable of
registration;
"KEY EMPLOYEE" means any person who has or had responsibility for or is or was
involved in: any policy-making function, preparation or presentation of
financial statements; obtaining or maintaining government or third party
consents, approvals, licenses or similar activities, or complying with
applicable laws and regulations; communicating with securityholders; identifying
or executing business or strategic opportunities in internet, voice,
infrastructure or other telecommunications products or services whether with
potential customers or other companies; maintaining or creating relationships
with customers; acquiring, constructing or maintaining telecommunications
networks, data centers, or any other technology; and formation or administration
of employment, customers and other contracts; in each case, as an employee or
consultant of the Company or any other Group Company in the period of 12 months
prior to the Termination Date (for the avoidance of doubt, it being agreed that
the Executive's secretarial assistant shall not be treated as a Key Employee);
"LIMITED VICARIOUS LIABILITY" means any liability that is based on acts of the
Company, Carrier1 SA or any member of the Group for which Executive is
responsible solely as a
2
result of his office(s) with the Company and Carrier1 SA, provided that (A) he
was not directly involved in such acts and either had no prior knowledge of such
intended actions or promptly acted reasonably and in good faith to attempt to
prevent the acts causing such liability or (B) he did not have a reasonable
basis to believe that a law was being violated by such acts;
"PERMITTED HOLDERS" means any of the following: any of Providence Equity
Partners L.P., Providence Equity Partners II L.P., Providence Equity Partners
III L.P., Providence Equity Partners IV L.P., Providence Operating Partners IV
L.P., Providence Growth Investors L.P., Primus Capital Fund IV L.P., Primus
Capital Fund V L.P., Primus Executive Fund L.P. and Primus Executive Fund V L.P.
and any of the respective Affiliates or successors of the foregoing.
"PERSON" means any natural person, corporation, limited liability company,
partnership, limited partnership, firm, joint venture, association, joint-stock
company, trust, business trust, unincorporated organization, governmental or
regulatory body, or other entity of whatever nature.
"VOTING STOCK" means, with respect to any person, capital stock of Carrier1 SA
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
person.
"TERMINATION DATE" means the date of effectiveness of termination of the
Appointment.
2. APPOINTMENT
2.1 TERM. The Company shall engage the Executive and the Executive shall serve
the Company as provided herein (the "APPOINTMENT"). The Appointment shall
commence on the date the Executive commences full time employment with the
Company (the "COMMENCEMENT DATE"), which shall be no later than 1 October
2001, and shall continue unless and until terminated as provided in Clause
5. The Executive shall use his reasonable best efforts to commence
employment as soon as possible after the date hereof.
2.2 APPOINTMENT. During the Appointment, the Executive shall be employed as
the Chief Executive Officer of the Company and of Carrier1 SA. Effective
as of the Commencement Date, the Executive shall be named to serve as a
member of the Carrier1 SA Board and the Board. Thereafter during the
Appointment, the Company shall nominate the Executive for, and support his
election to, serve as a member of the Board and the Carrier1 SA Board
during the Appointment. If there is a chairman of the Carrier1 SA Board,
who is also an employee of the Group, the Executive shall be such
chairman.
2.3 EFFECT OF PREVIOUS EMPLOYMENT. No previous employment counts as part of
the Executive's continuous employment with the Company.
2.4 NO CONFLICTS. The Executive represents that (i) he is entering into this
Agreement voluntarily and that his employment hereunder and compliance
with the terms and
3
conditions hereof will not conflict with or result in the breach by him of
any agreement to which he is a party or by which he may be bound, (ii)
except for his agreement with Cable & Wireless plc (a copy of which he has
heretofore provided to the Company), he is not and will not be bound by
any noncompetition, nonsolicitation or other similar covenant or
agreement, and (iii) in connection with his employment with the Company he
will not use any confidential or proprietary information he may have
obtained in connection with employment with any prior employer.
3. DUTIES AND RESPONSIBILITIES
3.1 GENERAL. The Executive shall report solely to the Board and the Carrier1
SA Board. The Executive shall be the most senior executive of the Company
and Carrier1 SA with ultimate responsibility for the business of all Group
Companies, together with the services and staff directly related thereto.
Subject to the supervision and direction of the Board and the Carrier1 SA
Board, the Executive shall have broad discretion and authority to manage
and direct the day-to-day affairs and operations of all Group Companies,
including with respect to the strategic direction of all Group Companies
and the hiring and termination of any one or more employees of the Group
Companies. All operating, staff, other executives, and divisions of all
Group Companies shall report solely to Executive, either directly to
Executive or indirectly to Executive through subordinates of Executive who
report to Executive. In addition, the Executive shall have such other
duties consistent with the Executive's titles and positions as the Board
or the Carrier1 SA Board specifies from time to time, which may include
serving as an officer or director or otherwise performing services for any
Group Company. In so acting, the Executive shall devote such time and
attention to the duties assigned to him as may be required for the
performance of such duties as an employee of the Company and well and
faithfully serve the Company and the Group and use his best endeavours to
promote the interests of the Company and the Group and obey all reasonable
and lawful directions given to him by or under the authority of the Board
or the Carrier1 SA Board, it being understood that the Executive shall
devote substantially all his working time and attention to the performance
of such duties and the fulfillment of such commitments (other than (i)
vacation time and absence for sickness or similar disability, (ii) to the
extent that it does not interfere with the performance of the Executive's
duties hereunder such reasonable time as may be devoted to service in a
non-executive capacity on not more than three corporate boards of
directors as the Carrier1 SA Board shall from time to time approve (such
approval not to be unreasonably withheld), it being understood that such
approval is given with respect to the three corporations listed on
Schedule A hereto, and (iii) such reasonable time as may be necessary from
time to time for managing his personal financial affairs and the
fulfillment of his civic responsibilities, in each case subject to Clause
3.2).
4
3.2 RESTRICTIONS. During the Appointment the Executive shall:-
(a) comply with all material written Company employment-related policies
that have been provided to him;
(b) not do anything that would cause him to be disqualified from holding
any office as a director, chief executive officer, or any other
office with the Company or any Group Company;
(c) not, except as a representative of the Company or with the prior
written approval of the Board, whether directly or indirectly, paid
or unpaid, (i) be engaged or concerned in the conduct of any other
actual or prospective business or profession, (ii) be or become an
employee, agent, partner, member, consultant, director or officer of
any other company or firm or (iii) assist or have any financial
interest in any other business or profession that may interfere,
conflict or compete with the proper performance of the Executive's
obligations to the Company.
3.3 PLACE OF WORK. The Executive shall be required in pursuance of his duties
hereunder:-
(a) to work at 0 Xxxxxxx Xxxxxxxx Xxxxxx, Xxxxxx, X000XX or such other
places within the United Kingdom as the Company may require; and
(b) to travel to such places inside or outside the United Kingdom by
such means and on such occasions as may from time to time be
required in connection with the Executive's performance of services
hereunder.
3.4 WORKING HOURS. The normal business hours of the Company are 9.00 a.m. to
5.00 p.m. Monday to Friday and shall apply to the Executive provided that
the Executive shall work such further hours as may be necessary for the
proper discharge of his duties and he shall not be entitled to receive any
additional remuneration for work outside normal business hours.
4. REMUNERATION AND BENEFITS
4.1 BASE SALARY. During the Appointment, the Company shall pay the Executive a
base salary at the annual rate of (pound)UK450,000. The Board shall review
Executive's base salary annually during the Appointment and, in its sole
discretion, may change such base salary from time to time based upon the
performance of Executive, the financial condition of the Company,
prevailing industry salary levels and such other factors as the Board
shall consider relevant, provided that the annual base salary may not be
decreased. (The annual base salary payable to Executive under this Clause
4.1 from time to time shall hereinafter be referred to as the "BASE
SALARY"). The Base Salary shall be payable in accordance with the
Company's standard payroll practices, but no less frequently than calendar
monthly in arrears on the last working day of each month.
5
4.2 ANNUAL BONUS OPPORTUNITY. The Executive shall participate in the Company's
annual incentive bonus program. The Executive's target annual bonus at
achievement of 100% of the objectives established by the Board and the
Carrier1 SA Board shall be 50% of his Base Salary ("OTE BONUS"), and the
actual bonus paid based upon performance may range from 0% to 75% of Base
Salary (or higher) depending on such performance relative to the
objectives established by the Board and the Carrier1 SA Board, provided
that for the portion of the Company's fiscal year ending 31 December 2001
during the Appointment, the Executive's annual bonus shall be not less
than 50% of Base Salary for such period. The Executive's annual bonus
shall be paid at the time the Company customarily pays annual bonuses to
its executives.
4.3 REPLACEMENT AWARD.
(a) In order to address certain forfeitures that the Executive will face
upon termination of his employment with his prior employer, the
Executive shall receive the following:-
(i) prior to the Commencement Date, the Company shall pay the
Executive(pound)UK 694,020; and
(ii) upon the 24-month and 36-month anniversary of the Commencement
Date the Executive commences full-time employment with the
Company, the Company shall pay the Executive (pound)UK
1,388,041, in each case subject to the Executive's continuous
employment with the Company through such payment date (except
as provided in Clause 5.2(b)).
(b) In order to secure the obligations of the Company under this Clause 4.3,
on or before the Commencement Date, the Company shall establish a standby
letter of credit (the "Letter of Credit") in favor of the Executive, in
form and substance reasonably satisfactory to the Executive, in the amount
of(pound)UK 2,776,082 and that shall provide that the Executive may draw
upon the Letter of Credit in the amounts and at the times (and subject to
the terms and conditions) provided for in Clause 4.3(a), 4.4(c) and 4.4(d)
upon certification delivered to the issuing bank (with a copy to the
Company pursuant to Clause 11 hereof) signed by the Executive under
penalties of perjury certifying that the conditions set forth in this
Agreement to the Executive's right to draw such amount have been satisfied
in full. If the Letter of Credit is scheduled to expire before amounts
payable with respect thereto have been satisfied in full or the
obligations with respect thereto have been extinguished in accordance with
the terms of this Agreement, and the Company has failed to provide a
renewal or replacement letter of credit, the bank issuing such Letter of
Credit shall notify the Executive no later than 60 days prior to such
expiration.
6
(c) If the Executive voluntarily terminates employment other than for
Good Reason before the first anniversary of the Commencement Date,
the Executive shall be obligated to repay to the Company 100% of the
amounts paid pursuant to Clause 4.3(a). If the Executive voluntarily
terminates employment other than for Good Reason after the first
anniversary of the Commencement Date and before the second
anniversary of the Commencement Date, the Executive shall be
obligated to repay to the Company 50% of the amounts paid pursuant
to Clause 4.3(a).
(d) If the employment is terminated by the Company (other than as a
result of an Event of Default or as a result of the Executive's
death or Disability) or by the Executive for Good Reason, the
Executive shall be entitled to retain the amounts previously paid to
him pursuant to Clause 4.3(a) and any remaining amounts that he is
entitled to draw down under the Letter of Credit.
4.4 STOCK OPTION AWARD.
(a) Effective as of September 11, 2001, the Executive will receive a
special one-time award of options to purchase 1,200,000 Carrier1 SA
ordinary shares (it being understood that the foregoing number shall
be appropriately adjusted to reflect any reverse stock split, stock
split, stock dividend or other similar item any time after August 6,
2001). Such stock option grant shall have an exercise price per
ordinary share of $1.10 (it being understood that the price shall be
appropriately adjusted to reflect any reverse stock split, stock
split, stock dividend or other similar item), shall generally have a
term of 10 years and, except as otherwise expressly provided herein,
shall be granted pursuant to an option agreement in the form
attached hereto as Exhibit A.
(b) The options provided for in this Clause 4.4 shall vest 25% on the
first anniversary of the Commencement Date and thereafter shall vest
in 6 equal semi-annual installments on the succeeding 6-month
anniversaries of the Commencement Date, in each case subject to the
Executive's continuous employment through such dates.
(c) Notwithstanding the foregoing, if a Change of Control occurs and the
Executive is not offered the position of Chief Executive Officer of
the surviving company (the parent company if such parent company is
publicly traded and owns more than 50% of the surviving company)
following such Change of Control, the Executive may elect no later
than 30 days prior to the Change of Control either (i) payment of
any unpaid amounts provided for under Clause 4.3(a)(ii), to be -
paid promptly following such Change of Control, or (ii) vesting
effective upon the Change of Control of all of the remaining
unvested options granted pursuant to this Clause 4.4 held by the
Executive at such time, provided that the Executive will not be
entitled to make this election if, after the announcement of or
entering into the transaction that would constitute the Change of
Control but prior to the consummation of the Change of Control, the
Appointment has terminated for
7
any reason other than a termination by the Company where no Event of
Default has occurred or by the Executive for Good Reason.
(d) If the Appointment is terminated by the Company (other than as a
result of an Event of Default or as a result of the Executive's
death or Disability) or by the Executive for Good Reason (other than
in the circumstances where preceding Clause 4.4(c) applies) , the
Executive may elect no later than 30 days prior to the Termination
Date (or, in the case of a termination by the Company on summary
notice, within 20 days following such Termination Date) either (i)
payment of any unpaid amounts provided for under Clause
4.3(a)(ii), to be paid promptly following such termination, or (ii)
vesting effective upon the Termination Date of that number of
options granted pursuant to this Clause 4.4 that would have vested
within the 12 months following such termination, in each case
assuming the Executive had remained employed with the Company
through such date.
(e) If the Executive makes an election pursuant to Clause 4.4(c) or
4.4(d) for options to vest instead of receiving unpaid amounts under
Clause 4.3(a)(ii), the Letter of Credit may be cancelled and any
remaining amounts in escrow or otherwise supporting such Letter of
Credit shall be paid over to the Company. If, pursuant to Clause
4.4(c) or 4.4(d), the Executive draws down remaining amounts under
the Letter of Credit such action shall be deemed an irrevocable
election with respect thereto (in lieu of vesting of options).
(f) Coincident herewith, the Executive and the other parties thereto
shall enter into a Stockholders Agreement that will provide for
certain registration rights and the right (and obligation) to
participate in sales by certain shareholders of Carrier1 SA, in each
case subject to the terms and conditions set forth therein,
substantially in the form attached as Exhibit A.
4.5 BENEFITS, PERQUISITES AND EXPENSES.
(a) BENEFITS. During the Appointment, the Executive shall be eligible to
participate, to the extent made generally available by the Company
to its senior executives, in (i) each welfare benefit plan sponsored
or maintained by the Company, - including, without limitation,
hospitalization, disability, life and health insurance and (ii)
other benefit arrangements, whether now existing or established
hereafter, and to the extent that the Executive is eligible to
participate in any such plan under the generally applicable
provisions thereof. During the Appointment, the Company shall
provide the Executive with (i) term life insurance equal to 4 times
his Base Salary and OTE Bonus (in each case - as of the date
hereof), (ii) disability insurance, (iii) medical insurance for him
and his family and (iv) shall contribute to its pension plan (a copy
of which has heretofore been provided to the Executive) for the
benefit of the Executive each month such amounts as shall be equal
to 10 % per annum of his Base Salary and OTE bonus. If and to the
8
extent that such contributions shall not be capable of being made to
an Inland Revenue approved scheme because of the application of
Inland Revenue limits on contributions or benefits the Company shall
contribute any excess amounts to an unapproved retirement benefits
scheme or plan for the benefit of the Executive. For the avoidance
of doubt it is confirmed that the Executive shall not be required to
contribute to any pension plan or scheme whether approved or
unapproved.
(b) HOLIDAYS.
(i) During the Appointment, the Executive shall be entitled to up
to 25 days paid holiday each year, accruing ratably each
calendar month consistent with Company policy for all senior
executives; provided that unused holiday time shall not be
carried over to subsequent years, and no payment will be due
with respect to such unused days. In addition, the Executive
will be entitled to statutory and other public holidays in
force in the United Kingdom.
(ii) If either party gives notice to terminate the Appointment, the
Company may require the Executive to take any accrued but
unused holiday entitlement during the notice period, and the
Executive shall not receive additional compensation for any
accrued but unused holiday entitlement upon termination.
(c) PERQUISITES. During the Appointment, the Executive shall be entitled
to participate in all perquisite programs maintained by the Company
for its senior executives, on a basis that is commensurate with the
Executive's position and duties with the Company hereunder, in
accordance with the terms thereof, as the same may be amended and in
effect from time to time.
(d) BUSINESS EXPENSES. During the Appointment, the Company shall pay or
reimburse the Executive for reasonable, ordinary and necessary
out-of-pocket business expenses incurred by the Executive in the
performance of his duties, subject to the Company's policies in
effect from time to time with respect to travel, entertainment and
other expenses, including without limitation, requirements with
respect to reporting and documentation of such expenses.
5. TERMINATION
5.1 TERMINATION OF APPOINTMENT.
(a) BY THE COMPANY OR BY THE EXECUTIVE. The Appointment may be
terminated by either the Executive or the Company by giving to the
other party written notice not less than twelve weeks prior to the
Termination Date (such period being referred to herein as the notice
period). Notwithstanding the foregoing, the Company reserves the
right to pay the Executive salary in lieu of part or all of the
notice of termination to which the Executive is otherwise
9
entitled hereunder. Such payment shall extinguish all obligations of
the Company to the Executive in respect of that part of the notice
period to which it relates.
(b) BY COMPANY WHERE EVENT OF DEFAULT HAS OCCURRED. The Company may
terminate the Appointment upon an Event of Default in accordance
with Clause 10. Any delay by the Company in exercising such right to
terminate the Appointment shall not constitute a waiver thereof.
(c) BY THE EXECUTIVE FOR GOOD REASON. The Executive may terminate the
Appointment for Good Reason within 90 days of the Executive becoming
aware of the occurrence of a Good Reason Event (other than in the
case of item (vii) below) by giving the Company not less than 30
days prior written notice of the Termination Date (or, in the case
of item (vii) below, at any time prior to the expiration of the
Letter of Credit), unless such circumstances are fully corrected
prior to the date of termination specified in such written notice.
Any such written notice shall set forth in reasonable detail the
Good Reason Event. For these purposes, a "GOOD REASON EVENT" means
the occurrence of any of the following circumstances without the
Executive's consent: (i) any material diminution of the Executive's
positions, duties or responsibilities of Appointment as provided in
Clause 2.2 (except in each case in connection with the termination
of the Executive's employment as a result of an Event of Default or
Disability or as a result of the Executive's death, or temporarily
as a result of Executive's illness or other absence); (ii) removal
of, or the non-reelection of, the Executive from officer or director
positions with the Company or Carrier1 SA specified herein; (iii)
requiring Executive's principal place of business to be located
other than in the London Metropolitan region; (iv) a reduction in
the Executives remuneration specified herein; (v) any material
breach by the Company of any provision of this Agreement; (vi) any
appointment of any person who is an employee of the Group as
chairman of the Carrier1 SA Board (other than the Executive); or
(vii) any notice of expiration of the Letter of Credit, unless all
amounts payable with respect thereto have been satisfied or the
Company's obligations with respect thereto have been extinguished in
accordance with the terms of this Agreement.
(d) DEATH OR DISABILITY. The Appointment shall terminate automatically
upon the death of the Executive, and the Board may terminate the
Appointment upon a determination of the Disability of the Executive.
For these purposes, a "DISABILITY" of the Executive means a physical
or mental disability that prevents or is reasonably expected to
prevent the performance by the Executive of his duties hereunder for
180 days in any 365 day period. In the event of any dispute, the
determination of the Executive's Disability shall (i) be made by an
independent physician who is reasonably acceptable to the Company
and the Executive (or his representative), (ii) be final and binding
on the parties hereto and (iii) be made taking into account such
competent medical evidence as shall be presented to such independent
physician by the
10
Executive and/or the Company or by any physician or group of
physicians or other competent medical experts employed by the
Executive and/or the Company to advise such independent physician.
5.2 REMUNERATION UPON TERMINATION.
(a) REMUNERATION APPLICABLE TO ANY TERMINATION. In the event of any
termination, the Executive (or his estate, beneficiary or legal
representative, as the case may be) shall be entitled to receive
accrued Base Salary through the Termination Date and any other
amounts or benefits payable under any applicable plan, program or
policy of the Company (determined in accordance with the terms
thereof).
(b) TERMINATION OTHER THAN AS A RESULT OF AN EVENT OF DEFAULT. If the
Appointment is terminated by the Executive for Good Reason or by the
Company other than as a result of an Event of Default on the part of
the Executive, the Executive (or his estate, beneficiary or legal
representative, as the case may be) shall, subject to the
Executive's continued compliance with Clause 6, 7 and 8 be entitled
to receive:-
(i) the Executive's Base Salary for 12 months following the
Termination Date (less any amounts paid pursuant to the second
sentence of Clause 5.1(a) in lieu of the notice period) plus,
when annual bonuses are otherwise payable, an amount equal to
the OTE Bonus (provided that if the termination occurs
following a Change of Control, such amounts shall be paid in a
lump sum promptly following such termination of employment);
and
(ii) continued medical benefits for 12 months following the
Termination Date for the Executive and his eligible family
members, on the same terms and conditions as in effect
immediately before such termination; and
(iii) the items that may be provided for in Clause 4.4(c) or 4.4(d),
if applicable.
(c) TERMINATION WHERE EVENT OF DEFAULT HAS OCCURRED; TERMINATION BY THE
EXECUTIVE OTHER THAN FOR GOOD REASON. Notwithstanding anything
herein to the contrary, in the event that the Appointment terminates
and there has been an Event of Default by the Executive, or the
Executive voluntarily terminates the Appointment other than for Good
Reason, the Executive shall not be entitled to any remuneration
other than as expressly provided for in Clause 5.2(a).
11
6. DISCLOSURE, USE AND PUBLICATION OF BUSINESS INFORMATION
6.1 DISCLOSURE. Without prejudice to his common law duties, the Executive
shall not (except in the proper course of his duties, as required by law
or as authorised by the Board) use or communicate to any person (and shall
use his best endeavours to prevent the use or communication of) any trade
or business secrets or other confidential, non-public or proprietary
information of or relating to the Company or any other member of the Group
(including but not limited to details of actual or potential customers,
clients, consultants, suppliers, networks, facilities, designs, products,
product applications, trade arrangements, terms of business, operating
systems, marketing strategies, manufacturing processes, pricing and fee
arrangements and structures and financial information, research and
development activities, Creative Work, Intellectual Property or Invention)
which he may have created, developed, received or obtained while in the
service of the Company or any other Group Company, except to the extent
the Executive is required to do so in connection with any judicial,
regulatory or other similar proceeding or investigation. If the Executive
shall be required by law (whether by court order, subpoena or otherwise)
to communicate any such information to a court, governmental agency or any
other person, the Executive shall use his best efforts to consult with the
other members of the Board prior to responding to any such order, subpoena
or other requirement. These restrictions shall continue to apply after the
termination of the Appointment howsoever arising without limit in time and
shall include information in the public domain for so long as the
Executive is in a position to use such information more readily than
others who have not worked for the Company or any other Group Company.
6.2 RECORDS. The Executive shall not (i) during the Appointment make (other
than for the benefit of the Group) any record (whether on paper, computer
memory, disk or otherwise) relating to any matter within the scope of the
business of the Group Companies or their customers, clients, consultants
and suppliers or concerning any of its or their dealings or affairs or
(ii) either during the Appointment or at any time thereafter use or permit
to be used any such records other than for the benefit of the Group, it
being agreed by the parties that all such records (and copies thereof)
shall be the property of the relevant member of the Group and shall be
handed over to any other member of the Board by the Executive on the
termination of the Appointment or (at the request of the Board) at any
time during its term.
6.3 PUBLICATION. The Executive shall not during the Appointment or at any time
thereafter either directly or indirectly publish any opinion, fact or
material on any matter connected with or relating to the business of any
member of the Group or their customers, clients, consultants or suppliers
(whether confidential or not) without the prior approval of the Board.
12
7. OBLIGATIONS UPON TERMINATION
Upon termination of the Appointment howsoever arising the Executive shall,
except as otherwise reasonably determined in good faith (with the advice of
counsel) by the Executive to be required by applicable law:-
7.1 at any time or from time to time thereafter upon the request of the Board
(i) immediately resign in writing without claims of any kind as a director
of and from all other offices held in the Company and membership of any
organisation and any directorship or other office in any other company
acquired by reason of or in connection with the Appointment or any
employment or service agreement with any other Group Company, and any
authority, power or proxy to vote held by the Executive in any such
company (including but not limited to any appointment as an alternate
director), (ii) acknowledge in writing that he has no claims of any kind
arising from his office, membership or appointment and (iii) consent in
writing to the revocation of any such authority, power or proxy, and
should he fail to do so the Company is hereby irrevocably appointed to be
the Executive's attorney in his name and on his behalf to execute any
documents and to do any things necessary or requisite to give effect to
this Clause 7.1.
7.2 deliver to the Board (or, as to documents and property of any other member
of the Group, to the board of directors or other similar governing body of
such other member of the Group):-
(a) all documents (including but not limited to correspondence, lists of
clients or customers, plans, drawings, accounts and other documents
of whatsoever nature and all copies thereof, whether on paper,
computer memory, disk or otherwise) containing confidential or other
business information referred to in Clause 6.1 or 6.2 or made or
compiled or acquired by the Executive during the Appointment and
concerning the business, finances or affairs of the Company or any
other member of the Group or any of its or their partners, members,
shareholders, directors, officers, employees, customers, clients,
consultants or suppliers; and
(b) all other property of the Company or any other member of the Group;
7.3 transfer (without payment) to the Company or as the Company may direct any
qualifying shares held by the Executive solely in his capacity as a
director of a member of the Group; and
7.4 except as provided in Clause 5.2, have no rights as a result of this
Agreement or any other terms of the Executive's employment with the
Company, or any alleged breach of this Agreement or such terms, to any
compensation under or in respect of any share option, bonus or long term
incentive plans in which he may participate or have received grants or
allocations at or before the date the Appointment terminates. Any rights
which he may have under such schemes shall be exclusively governed by the
rules of such schemes.
13
8. RESTRICTIONS AFTER TERMINATION
8.1 RESTRICTIONS. The Executive covenants to the Company (for itself and for
each other Group Company) that he shall not for the following periods
after the Termination Date howsoever arising, save with the prior written
consent of the Board, directly or indirectly, either alone or jointly with
or on behalf of any person, firm, company or entity and whether on his own
account or as principal, partner, member, shareholder, director, officer,
employee, consultant or in any other capacity whatsoever:-
(a) for 12 months following the Termination Date employ, engage or offer
to employ, engage or solicit the employment or engagement of, induce
the termination of employment of or otherwise interfere with the
relationship of the Company or any other Group Company with any Key
Employee (whether or not such person would commit any breach of
their contract of employment or engagement by reason of leaving the
service of their employer); or
(b) at any time after the Termination Date disparage or otherwise make
any statement that is damaging to the business or reputation of the
Company or any other member of the Group or the business or
prospects thereof, or any partner, member, shareholder, director,
officer or employee of any member of the Group, or any of Providence
Equity Partners L.P., Providence Equity Partners II L.P., Primus
Capital Fund IV Limited Partnership, Primus Executive Fund Limited
Partnership, or any affiliated company of any thereof, or any
partner, member, shareholder, director, officer or employee of any
thereof.
8.2 RESTRICTIONS SEPARATE AND INDEPENDENT. Each of the obligations contained
in this Clause 8 constitutes an entire separate and independent
restriction on the Executive, despite the fact that they may be contained
in the same phrase, and if any part is found to be unenforceable the
remainder will remain valid and enforceable.
8.3 MODIFICATIONS AS NECESSARY. Although such restrictions are considered by
the parties to be fair and reasonable in the circumstances, it is agreed
that if any such restrictions should be judged to be void or ineffective
for any reason but would be treated as valid and effective if part of the
wording thereof were deleted or the periods thereof reduced in scope, such
restrictions shall apply with such modifications as may be necessary to
make them valid and effective.
8.4 OTHER MEMBERS OF GROUP. The Executive agrees that he will at the request
of the Company and at no cost to him enter into a direct agreement with
any and each other member of the Group under which he will accept
restrictions corresponding to the restrictions contained in this Clause 8
(or such as will be appropriate in the circumstances) in relation to such
member of the Group.
14
9. DISCIPLINARY AND GRIEVANCE PROCEDURE
9.1 APPLICABLE RULES. There are no disciplinary rules applicable to the
Executive except as provided in this Agreement.
9.2 REDRESS OF GRIEVANCES. Any application for the purpose of seeking redress
of any grievance relating to the Executive's employment under this
Agreement shall be made as provided elsewhere herein.
10. EVENTS OF DEFAULT
10.1 The Executive shall have committed an act that constitutes an Event of
Default hereunder if he shall at any time during the Appointment:-
(a) engage in gross misconduct, fraud, willful misconduct or gross
negligence, or act with bad faith or reckless disregard of his duty
to the Company in performing services hereunder or his duty to any
other member of the Group;
(b) be convicted of or enter a plea of guilty or no contest to (i) any
criminal offence that shall constitute a felony, or that shall be
punishable by imprisonment for a period of one year or longer
(whether or not such punishment is imposed on him), or for which a
term of imprisonment of any duration shall be imposed on him (other
than an offence under any road traffic legislation in the United
Kingdom or elsewhere for which a fine or other non-custodial penalty
is imposed on him) or (ii) any offence under any regulation or
legislation relating to insider dealing or any other relevant
legislation, rules or regulations which may apply to the Executive,
the Company or any other member of the Group; provided that in
either case of subsection (i) or (ii), Limited Vicarious Liability
shall be excluded; or
(c) do anything of a similar nature which does or may bring the Company
or any other member of the Group into disrepute or causes or may
result in serious injury to the Company or any other member of the
Group.
If an act, or a failure to act, that was done, or omitted to be done, by
the Executive in good faith and with a reasonable belief that Executive's
act, or failure to act, was in the best interests of the Company or was
required by applicable law or administrative regulation, such breach shall
not constitute an Event of Default if, within thirty (30) days after the
Executive is given written notice of such breach that specifically refers
to this Clause, the Executive cures such breach in full.
10.2 SUSPENSION. The Company may at any time and upon written notice approved
by not less than a75% majority of the Carrier1 SA Board (excluding, for
these purposes, the Executive), suspend the Executive for a period of up
to three months for the purposes of investigating any allegation of
misconduct or neglect against the Executive that may constitute an Event
of Default and during this period the Executive shall not (except with the
prior written approval of the Board) attend any premises of or contact any
employee (other than any director),
15
customer, client, consultant or supplier of the Company or any other
member of the Group. The Company and Carrier1 SA will use their reasonable
best efforts to maintain any such suspension or investigation
confidential.
10.3 The Company may not terminate the Appointment for an Event of Default
unless:
(a) A meeting of the Carrier1 SA Board shall be called for the stated
purpose of determining whether Executive's acts or omissions
constitute an Event of Default and, if so, whether to terminate the
Appointment for an Event of Default;
(b) no fewer than 20 days prior to the date of such meeting, the Company
provides Executive and each member of the Carrier1 SA Board with
written notice (the "NOTICE OF CONSIDERATION") of its intent to
consider termination of the Appointment for an Event of Default,
including (i) a description setting forth in reasonable detail the
specific reasons which form the basis for such consideration, (ii)
the date, time and location of such meeting of the Carrier1 SA
Board, and (iii) Executive's rights under Clause 10.3(c) below;
(c) Executive shall have the opportunity, if he so elects, to appear
before the Carrier1 SA Board in person and, at Executive's option,
with legal counsel, and to present to the Carrier1 SA Board a
response to the Notice of Consideration;
(d) the Appointment may be terminated for an Event of Default only if
(i) the acts or omissions specified in the Notice of Consideration
did in fact occur and do constitute an Event of Default as defined
in this Agreement, (ii) the Carrier1 SA Board makes a specific
determination by at least 75% of the members of the Carrier1 SA
Board (excluding for these purposes the Executive) to such effect
and to the effect that the Appointment should be terminated for an
Event of Default and (iii) the Company thereafter provides Executive
with a written notice which setting forth in reasonable detail the
basis of such termination of Appointment for an Event of Default and
which notice shall be consistent with the reasons set forth in the
Notice of Consideration; and
In the event that the existence of an Event of Default shall become an
issue in any action or proceeding between the parties, the Company shall,
notwithstanding the determination referenced in Clause 10.3(d) above, have
the burden of establishing by a preponderance of the evidence that the
actions or omissions specified in the Notice of Consideration did in fact
occur and do constitute an Event of Default and that the Company has
satisfied the substantive and procedural requirements of this Clause.
11. NOTICES
Any notice to be given hereunder in writing may be given by either party by
personal delivery or post or by fax addressed to the other party at (in the case
of the Company) its
16
registered office at such time and (in the case of the Executive) his last known
place of residence, in each case with copies to the persons indicated below, and
any such notice given by personal delivery or fax shall be deemed to have been
given at the time at which the notice was delivered personally or transmitted or
if given by post would be delivered in the ordinary course of post.
Carrier One, LLC Carrier1 International GmbH
901 Fleet Center 36 Militarstrasse
00 Xxxxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx
Xxxxxxxxxx XX 00000 Attention: General Counsel
USA Facsimile: 00 0000-0000
Attention: Xxxxx X. Xxxxxxx Telephone: 00 0000-0000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx Debevoise & Xxxxxxxx
8000 Sears Tower 000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000 Xxx Xxxx, XX 00000
XXX XXX
Attention: Xxxxx X. Xxxxx Attention: Xxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
12. GENERAL PROVISIONS
12.1 ENTIRE AGREEMENT. This Agreement contains the entire understanding between
the parties with respect to the subject matter hereof.
12.2 PROPER LAW. Any dispute, controversy, proceeding or claim of whatever
nature arising out of or relating to, or breach of, this Agreement or any
other terms of the Executive's employment with the Company shall be
governed by, and this Agreement and such terms shall be construed in all
respects in accordance with, English law.
12.3 LEGAL FEES AND LATE PAYMENTS.
(a) If the Executive prevails as to at least one material aspect (after
exhaustion of all available judicial remedies) of a material claim
asserted by him to obtain any benefit or enforce any right accorded
to the Executive or to defend any claim against the Executive
brought by the Company under this Agreement, the Company shall
reimburse the Executive upon submission of an itemized xxxx for all
reasonable legal fees and other expenses reasonably incurred by him
in connection therewith.
(b) If either of the parties fails to pay any amount provided under this
Agreement, such party shall pay to the other party interest,
compounded monthly, on such amount from the date payment of such
amount should otherwise have been made to the actual date of
payment, at a rate equal to the prime commercial lending rate plus
2% announced by THE WALL STREET
17
JOURNAL on the date such amount is due or, if no such rate shall be
announced on such date, the immediately prior date on which The Wall
Street Journal announced such a rate.
12.4 WITHHOLDING AND OFFSETS. The Executive acknowledges that any payment made
to him under this Agreement may be subject to income tax and national
insurance contributions or other applicable taxes or social charges and
that the Company may withhold amounts in respect of such taxes,
contributions or other charges from any such payment.
12.5 CERTAIN EXPENSES. The Company shall pay for the reasonable costs, fees and
expenses incurred by Executive's tax and legal advisor in connection with
the negotiation and execution of this Agreement.
12.6 NO CONTRACTING-OUT CERTIFICATE. A contracting-out certificate is not in
force in respect of the Executive's employment.
12.7 COLLECTIVE AGREEMENTS. There is no collective agreement which directly
affects the Executive's employment.
12.8 CONSTRUCTION.
(a) HEADINGS. The headings in this Agreement are inserted for
convenience only and shall not affect its construction.
(b) STATUTORY PROVISIONS. Any reference to a statutory provision shall
be construed as a reference to any statutory modification or
reenactment thereof (whether before or after the date hereof) for
the time being in force.
12.9 INDEMNIFICATION. The Company shall indemnify and hold harmless the
Executive to the greatest extent permitted under applicable law as the
same now exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to
provide broader indemnification than was permitted prior to such
amendment) and the Company's by-laws as such exist on the date of this
Agreement if Executive was, is, or is threatened to be made, a party to
any pending, completed or threatened action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any
other proceeding whether civil, criminal, administrative or investigative,
and whether formal or informal, by reason of the fact that Executive is or
was, or had agreed to become, a director, officer, employee, agent, or
fiduciary of the Company, any other member of the Group or any other
entity which Executive is or was serving at the request of the Company
("PROCEEDING"), against all expenses (including all reasonable attorneys'
fees of legal counsel selected by the Company, retainers, court costs,
transcripts, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery
service fees, and all other reasonable disbursements or expenses
customarily required in connection with asserting or defending claims)
("EXPENSES") and all claims, damages, liabilities and losses
18
(including judgments; fines; liabilities under the applicable taxation
laws, employment laws or the Employee Retirement Income Security Act of
1974, as amended, for damages, excise taxes or penalties; damages, fines
or penalties arising out of violation of any law related to the protection
of the public health, welfare or the environment; and amounts paid or to
be paid in settlement) incurred or suffered by Executive or to which
Executive may become subject for any reason. A Proceeding shall not
include any proceeding to the extent it concerns or relates to a matter
described in Clause 12.3.
(a) ADVANCEMENT OF EXPENSES AND COSTS. All Expenses incurred by or on
behalf of Executive in defending or otherwise being involved in a
Proceeding shall be paid by the Company in advance of the final
disposition of a Proceeding, including any appeal therefrom, within
30 days after the receipt by the Company of a statement or
statements from Executive requesting such advance or advances from
time to time. Such statement or statements shall evidence the
Expenses incurred by Executive in connection therewith, together
with supporting invoices, receipts and other documentation. Any
Expenses paid by Executive shall be deemed reasonable unless the
Company establishes before a court of competent jurisdiction by
clear and convincing evidence, that such Expenses are not
reasonable.
(b) EFFECT OF CERTAIN PROCEEDINGS. The termination of any Proceeding by
judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, except, in each case, to the extent
that the terms thereof expressly so provide, shall not, of itself
(i) adversely affect the rights of Executive to indemnification, or
(ii) create a presumption that Executive did not meet any particular
standard of conduct or have any particular belief or that a court
has determined that indemnification or contribution is not permitted
by applicable law.
(c) OTHER RIGHTS TO INDEMNIFICATION. Executive's rights of
indemnification and advancement of Expenses provided by this Clause
12.9 shall not be deemed exclusive of any other rights to which
Executive may now or in the future be entitled under applicable law,
the certificate of incorporation, by-laws, agreement, vote of
stockholders, or resolution of the Board, or other provisions of
this Agreement or any other agreement, or otherwise.
(d) REPRESENTATIONS. The Company represents and warrants that this
Clause 12.9 does not conflict with or violate its certificate of
incorporation or by-laws, and agree that the Company will not amend
its certificate of incorporation or by-laws in a manner that would
limit the rights of Executive hereunder. The Company represents that
the execution, delivery and performance of this Agreement has been
duly and validly authorized by the Board.
(e) SURVIVAL OF INDEMNITY. Notwithstanding anything in this Agreement to
the contrary, this Clause 12.9 shall survive any termination of the
relationship of Executive with the Company and shall be binding on,
and inure to the benefit
19
of the successors and assigns of the Company and the successors,
assigns, heirs and personal representatives of Executive.
12.10 D&O INSURANCE. The Company shall provide directors and officers insurance
coverage to Executive during the period beginning on the Commencement Date
and ending on the sixth anniversary of the Termination Date not less than
the highest coverage level offered to any other senior executive or
director of Carrier1 SA, in accordance with the coverage terms as in
effect from time to time.
12.11 COUNTERPARTS. This Agreement may be executed in more than one counterpart,
each of which shall be deemed an original, but all such counterparts when
executed shall constitute one and the same agreement.
12.12 MODIFICATIONS. No modification, variation or amendment to this Agreement
shall be effective unless such modification, variation or amendment is in
writing and has been signed by or on behalf of both parties.
20
IN WITNESS whereof this Agreement has been executed as a deed as of the date
first above written.
Signed as a deed and delivered by )
XXXXXX XXXXXXX XXXXXXX in the )
presence of:- ) /s/ Xxxxxx Xxxxxxx XxXxxxx
--------------------------------
Witness name: /s/ Xxxxxx Xxxx
--------------------------------
Witness address:
--------------------------------
--------------------------------
--------------------------------
Signed as a deed by, CARRIER 1 UK )
LIMITED, acting by its attorney, )
Carrier1 International, S.A., acting by its /s/ Xxxxx Xxxxxxx
--------------------------------
authorized officer in the presence of: /s/ Xxxx X. Xxxxxx
--------------------------------
Witness name: /s/ Xxxxxxxx Xxxxxxx
--------------------------------
Witness address:
--------------------------------
--------------------------------
--------------------------------
Signed as a deed by, CARRIER1 )
INTERNATIONAL, S.A. )
/s/ Xxxxx Xxxxxxx
--------------------------------
/s/ Xxxx X. Xxxxxx
--------------------------------
Schedule A
1. Alliance and Leicester Bank plc
2. Pace Micro Technologies plc
3. Red M Communications Ltd.
4. European Telecom plc(1)
--------
(1) The Executive currently serves on the Board of European Telecom plc.
However, the parties agree that the Executive will resign from that Board prior
to October 1, 2001.
