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EXHIBIT 10.2
DATED AS OF AUGUST 1, 1997
AMENDED AND RESTATED
SERVICE AGREEMENT
PLD TELEKOM INC. (1)
XXXXX X. X. XXXX ESQ. (2)
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DATED AS OF August 1, 1997
PARTIES
(1) PLD TELEKOM INC., a corporation incorporated under the laws of the State
of Delaware, whose registered office is at c/o CT Corporation System,
Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx ("the Company"); and
(2) XXXXX X.X. XXXX ESQ. of 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx ("the
Executive").
RECITALS
The Company and the Executive were parties to a Service Agreement dated as
of January 1, 1995 (the "First Agreement") and the Executive and PLD Management
Services Limited, an English company and a wholly-owned subsidiary of the
Company ("PLDMS"), were parties to a second Service Agreement also dated as of
January 1, 1995 (the "Second Agreement").
As a result of the Company's continuance to Delaware and the Executive's
transfer to the United States, the Second Agreement is being concluded by
agreement of the parties thereto effective as of the close of business on July
31, 1997 and the Company and the Executive are entering into this Amended and
Restated Service Agreement with a view to amending and restating the terms of
the First Agreement in their entirety, inter alia, to incorporate the salary and
other compensation and benefits previously being provided under the Second
Agreement, and to make various other changes to reflect the fact that the
Company is now a Delaware corporation.
INTERPRETATION
(3) In this Agreement, unless the context otherwise requires, the following
expressions have the meanings set out below:
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the Appointment the employment of the Executive pursuant to this
Agreement;
the Board the board of directors of the Company for the
time being (including any committee of the
Board);
the Commencement Date January 1, 1995;
Compensation
Committee a committee of the Board which determines the
annual sum (inclusive of any bonuses and other
remuneration) payable to the Executive and other
officers and of which a majority consists of
non-executive directors;
Confidential
Information all information which may be imparted in
confidence or be of a confidential nature relating
to the business or prospective business, plans or
internal affairs of the Company or any Group
Company and in particular all Know-how, Marketing
Information, trade secrets, unpublished
information relating to the Company's or any Group
Company's intellectual property and any other
confidential commercial, financial or technical
information relating to the business of the
Company or any Group Company or to any customer or
supplier, officer or employee of the Company or
Group Company or to any member or person
interested in the share capital of the Company or
any Group Company;
Documents documents, disks, memory, notebooks, tapes or any
other medium, whether or not eye-readable, on
which information may from time to time be
recorded;
the Effective Date August 1, 1997
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Group Company any company which directly or indirectly
controls, is controlled by, or is under common
control with the Company, and references to the
"Group Companies" shall be construed
accordingly, provided that for greater certainty
"Group Company" shall include BECET
International and Teleport-TP;
Know-how information comprised in formulae,
specifications, designs, drawings, component
lists, software (or pre-cursor documents),
databases, manuals, instructions and catalogues
held in whatever form relating to the creation,
production or supply of any products or services
by the Company or any Group Company, or by or to
any of the suppliers, customers, partners or
joint ventures of such company;
Marketing Information information relating to the marketing or sales of
any products or services of the Company or any
Group Company, including lists of customers' and
suppliers' names, addresses and contacts, sales
targets and statistics, market share and pricing
statistics, marketing surveys, research and
reports;
Permitted Interest an interest in any class of shares or other
securities of any company which are traded on a
recognized investment exchange which amount to not
more than five percent of such class of issued
shares or securities and an interest in any units
of any authorized unit trust;
Termination Amount an amount equal to the amount arrived at by
multiplying by 2.0 (or such other amount as may be
agreed by the Board and the Executive) the
aggregate total of the amount payable to the
Executive under Clause 4.1 hereof at the rate in
force at
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the date that the calculation falls to be made and
deducting therefrom any taxation or other
withholdings required by law; and
Termination Date the date of termination or expiration of the
Appointment howsoever occurring.
(4) The expressions "subsidiary" and "affiliate" have the meanings given to
them by the Delaware General Corporation Law or, in the absence thereof,
under Delaware law.
(5) References to Clauses and Parties are respectively to Clauses of and the
Parties to this Agreement.
(6) References to any enactment are to be construed as referring also to any
enactment or re-enactment thereof (whether before or after the date
hereof), and to any previous enactment which such enactment has replaced
(with or without amendment provided that the amendment does not change the
law as at the date hereof) and to any regulation or order made thereunder.
OPERATIVE PROVISIONS
1. JOB TITLE
The Company shall employ the Executive and the Executive shall serve the
Company as Chief Executive Officer.
2. PERIOD OF ENGAGEMENT
2.1 The Appointment commenced on the Commencement Date and the
amendments made hereby shall be effective as of the Effective Date.
Unless terminated earlier under Clause 9, the Appointment will
continue until terminated by either Party giving to the other not
less than six (6) months' notice in writing.
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2.2 The Company (and any relevant Group Company) shall not be obliged to
provide work to the Executive at any time after notice of
termination of the Appointment shall have been given by either Party
and the Company may, in its discretion, take any one or more of the
following steps in respect of all or part of an unexpired period of
notice:
(a) require the Executive to comply with such conditions as it may
specify in relation to attending at, or remaining away from,
the place(s) of business of the Company and the Group
Companies; or
(b) withdraw any powers vested in, or duties assigned to, the
Executive.
2.3 Should the Company give notice of termination of the Appointment
other than pursuant to Clause 9.1 (and whether or not in accordance
with Clause 2.1), the Company shall forthwith upon giving such
notice pay to the Executive the Termination Amount. The Executive
shall have no obligation to mitigate in respect of such payment.
2.4 The Company reserves the right at its sole discretion, should the
Executive give notice of termination of the Appointment in
accordance with Clause 2.1, to terminate the Appointment with
immediate effect upon payment to the Executive of a lump sum by way
of six months' gross salary (defined as the amount payable under
Sections 4.1 and 4.2) in lieu of notice, which sum shall be deemed
to be accepted for all purposes by the Executive as satisfaction in
full of all claims in relation to the Appointment or otherwise.
3. DUTIES
3.1 During the term of the Appointment, the Executive shall have the
following duties and obligations:
(a) to serve the Company as Chief Executive Officer; in addition
to such other duties and responsibilities as may lawfully be
delegated to him by the Board
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from time to time during the Appointment, he shall have
overall responsibility for the management and operation of
the businesses of all operating companies within the
Group, the maintenance of relationships with shareholders
and investment advisors and capital markets, the
overseeing of the treasury functions of the Company and
the Group Companies and the sufficiency of working capital
and ongoing commitments of the Company; and he shall
report to the Board and otherwise act in accordance with
the proper, reasonable and lawful directions given to him
from time to time by the Board;
(b) at all times to use all reasonable endeavors to promote the
interests and maintain the goodwill of the Company and any
other Group Company and not knowingly to do anything which is
materially prejudicial or detrimental to the Company or any
Group Company;
(c) to faithfully and diligently perform his duties and carry out
such powers and functions as may from time to time be vested
in him by or under the authority of the Board;
(d) to devote such time and attention as is necessary and the full
benefit of his knowledge, expertise and skills in the proper
performance of his duties (unless on holiday as permitted by
this Agreement or prevented by ill health or accident);
(e) to give (in writing if so requested) to the Board, or to such
person(s) as it may direct, such information and explanations
regarding the affairs of the Company or any other Group
Company or matters relating to the Appointment as the Board
may require; and
(f) to comply with any applicable code relating to dealings in
securities of the Company and with all lawful directions from
time to time given to the Executive by or under the authority
of the Board and, save as inconsistent
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with the express terms of this Agreement, all applicable
rules and regulations from time to time laid down by the
Company concerning its employees.
3.2 Subject to the provisions of Clause 3.1, the Executive shall have
such powers and do such acts in the ordinary course of business
carried on by the Company as the Board may from time to time
delegate to the Executive.
3.3 The Executive acknowledges that the executive offices of the Company
are in New York City, New York, U.S.A. and that the Executive shall
attend and work at any of the Company's locations (whether within or
outside the United States, the Commonwealth of Independent States or
the United Kingdom) in the manner and on the occasions reasonably
required from time to time by the Board.
3.4 The Board may require the Executive to perform services for any
Group Company wherever situated and without further fees or
remuneration and any duties that he may have under this Agreement
will be deemed to extend to such Group Company.
3.5 The hours of work of the Executive are not fixed but are the usual
working hours of the Company and such additional hours as may be
necessary to enable him properly to discharge his duties.
3.6 The Executive shall:
(a) at the request and expense of the Company, submit annually to
a medical examination by a medical practitioner nominated by
the Company as part of a health screening program and for
insurance purposes; and
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(b) authorize such medical practitioner to disclose to or
discuss with the Company's medical advisor any matters
arising from such examination; and the Company's medical
advisor may notify the Board of any serious matter if, in
his opinion, it might materially and adversely affect the
health of the Executive or the proper discharge of his
duties, provided that the Company shall not disclose to any
third party any matters arising from such examination
without the previous consent in writing of the Executive.
4. PAY AND EXPENSES
4.1 The Company shall pay to the Executive for the proper performance of
his duties under this Agreement for the balance of 1997 and
thereafter a salary at an annual rate of $390,000 (or such higher
rate as the Company may from time to time notify in writing to the
Executive).
4.2 Until the Termination Date, the Company shall pay to the Executive
(or as the Executive may otherwise direct) 10% of the Termination
Amount annually, in lieu of all pension, social and other benefits
whatsoever. Such amount shall be paid at the direction of the
Executive either in monthly installments or as an annual lump sum.
4.3 The salary payable to the Executive will:
(a) accrue from day to day and be payable by equal monthly
installments in arrears by not later than the last working day
of each month,
(b) notwithstanding anything to the contrary contained in the
Articles of Incorporation of the Company or equivalent
charter document of any other Group Company, be inclusive of
any other fees or remuneration of any description which the
Executive might be entitled to receive from the Company or
any Group Company or any other company or association in
which the Executive holds office as a nominee or
representative of the
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Company or any Group Company (and the Executive shall, at
the discretion of the Board, either waive his right to any
such remuneration or account to the Company for the same
forthwith upon receipt);
(c) be paid by credit transfer to the account nominated by the
Executive from time to time; and
(d) be capable of set-off by the Company from time to time against
any liability of the Executive to the Company.
All payments to the Executive shall be subject to applicable source
deduction and withholding taxes.
4.4 From time to time (but not less frequently than April 30 of each
year of this Agreement) all compensation to the Executive (including
without limitation salary, bonuses and equity compensation
arrangements) shall be reviewed by the Compensation Committee.
Increases or awards are not automatic but will be based on such
factors as the Compensation Committee may consider relevant,
provided it is acknowledged that increases or awards are solely in
the discretion of such Committee and are not required under this
Agreement. Increases or awards shall to the extent applicable be
retroactive to the preceding January 1.
4.5 The Executive hereby authorizes the Company to deduct from any
remuneration accrued and due to him under the terms of this
Agreement (whether or not actually paid during the Appointment) or
from any pay in lieu of notice:
(a) any overpayment (whether of salary or expenses or otherwise)
or payment made to the Executive by mistake or through any
misrepresentation; and
(b) any debt owed by the Executive to the Company or any Group
Company.
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Provided that in the case of a debt owed to any Group Company the
Company shall obtain for the benefit of the Executive a release of
such debt from such Group Company.
4.6 The Company shall repay to the Executive or (at the option of the
Executive) pay all reasonable travelling, hotel, accommodation and
other expenses properly incurred by the Executive in or about the
performance of the Executive's duties, subject to the Executive
having delivered to the Company such form(s) and vouchers or other
evidence of actual payment of such expenses as the Company may from
time to time require.
5. HOLIDAY
5.1 In addition to the usual public and bank holidays, the Executive
shall be entitled to 25 days' paid holiday in each holiday year (and
pro rata for part of each holiday year worked) to be taken at such
time or times as shall be agreed by the Board.
5.2 The holiday year runs from 1 January each year to the following 31
December. No holiday entitlement may be carried forward from one
holiday year to the next and no money will be paid in lieu of any
such untaken holiday entitlement.
5.3 Upon termination of the Appointment, other than pursuant to Clause
9.1, the Executive's entitlement to holiday will be calculated on
the basis of two days for each calendar month of service completed
during the holiday year in which termination occurs and the Company
shall make a payment in lieu of untaken holiday entitlement.
6. CONFIDENTIALITY
6.1 Neither during the continuance of the Appointment, other than in the
proper course of the Executive's duties and for the benefit of the
Company, nor after the Termination Date for any reason whatsoever,
shall the Executive:
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(a) use, disclose or communicate to any person any Confidential
Information which he shall have come to know or have received
or obtained at any time (before or after the date of this
Agreement) by reason of or in connection with this
Appointment; or
(b) copy or reproduce in any form or by or on any media or device
or allow others access to or to copy or reproduce Documents
containing Confidential Information.
6.2 The Executive acknowledges that all Documents containing
Confidential Information at any time in his control or possession
are and shall at all times remain the absolute property of the
Company and the Executive undertakes, both during the Appointment
and after the Termination Date:
(a) to exercise due care and diligence to avoid any unauthorized
publication, disclosure or use of Confidential Information and
any Documents containing or referring to it;
(b) at the direction of the Board, to deliver up any Confidential
Information (including all copies of all Documents whether or
not lawfully made or obtained) or to delete Confidential
Information from any re-usable medium; and
(c) to do such things and sign such documents at the expense of
the Company as shall be reasonably necessary to give effect to
this Clause and/or to provide evidence that it has been
complied with.
6.3 The restrictions in Clause 6.1:
(a) will not restrict the Executive from disclosing (but only to
the proper recipient) any Confidential Information which the
Executive is required to disclose by law or any order of the
court or any relevant regulatory body (including any stock
exchange upon which the shares or other securities of
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the Company are or are proposed to be traded), provided
that the Executive shall, unless obliged by law, have
given prior written notice to the Company of the
requirement and of the information to be disclosed and
allowed the Company an opportunity to comment on the
requirement before making the disclosure, and
(b) will not apply to Confidential Information which is or which
comes into the public domain otherwise than as a result of an
unauthorized disclosure by the Executive or any other person
who owes the Company an obligation of confidentiality in
relation to the information disclosed.
6.4 The Executive acknowledges that the restrictions set out in this
Clause 6 are without prejudice to any other duties of
confidentiality owed to the Company whether express or implied and
are to survive the termination of the Appointment (howsoever
arising).
7. FURTHER RESTRICTIONS
7.1 Unless agreed by the Board in advance, the Executive shall not (a)
during the Appointment carry on or be concerned, engaged or
interested directly or indirectly (whether as principal,
shareholder, partner, employee, officer, agent or otherwise) in any
trade or business other than that of the Company and shall not
engage in any other activity which the Company reasonably considers
may impair his ability to perform his duties under this Agreement;
and (b) for a period of equal to the greater of (i) twelve months
following the Termination Date and (ii) the period the Executive
receives remuneration hereunder following the Termination Date,
carry on or be concerned, engaged or interested directly or
indirectly (whether as principal, shareholder, partner, employee,
officer, agent or otherwise) in any trade or business which is in
competition with the business of the Company or any Group Company
carried on at the Termination Date in any country in which the
Company (or any entity in which the Company has a greater than 25%
economic
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interest) operates; provided that the foregoing shall not apply to a
Permitted Interest.
7.2 The Executive shall not during the Appointment and for a period of
six months thereafter either on his own behalf or on behalf of any
person, firm or company:
(a) solicit or endeavor to entice away from the Company an actual
employee, or discourage from being employed by the Company any
person who, to the knowledge of the Executive, is an employee
or a prospective employee of the Company; or
(b) employ or procure another person to employ any such person.
7.3 The restrictions set out in this Clause 7 are without prejudice to
any other fiduciary duties owed to the Company whether express or
implied.
8. ABSENCE, ILLNESS AND INCAPACITY
8.1 If at any time the Executive is prevented by reason of ill-health,
accident or other incapacity from properly performing his duties he
shall promptly furnish to the Company, if required, evidence of such
incapacity in a form reasonably satisfactory to the Board.
8.2 The Company shall pay the Executive the amounts payable under
Clauses 4.1 and 4.2 for the first 180 days in aggregate in any
calendar year of absence due to illness or other incapacity of the
Executive, but shall not be required to pay the Executive any salary
or other remuneration for any further periods of such absence in any
calendar year, although it may at its discretion do so.
8.3 The Company shall provide long-term disability coverage which shall
provide for disability payments in an amount not less than 40% of
basic salary commencing after the Executive has been incapacitated
from properly performing his duties for a period of 180 days.
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9. TERMINATION
9.1 The Company may at any time terminate the Appointment with immediate
effect (or any such longer period of notice as the Company shall see
fit) by giving the Executive written notice in any of the following
events:
(a) If the Executive at the time the notice is given is prevented
by reason of ill health or accident or other incapacity from
properly performing his duties and has been so prevented
(whether by the same or another reason) for at least a
continuous period of 180 days or for an aggregate period of at
least 180 days (whether or not, in either case, working days)
in the preceding twelve months:
(b) If the Executive shall have:
(i) been guilty of gross default or gross misconduct in
respect of his duties hereunder or otherwise as a
director or officer of the Company or any Group Company;
(ii) committed any material breach or non-observance or,
after having been given warning in writing, any
repeated or continued material breach or material
non-observance of any of his duties or any of his
express or implied obligations arising from the
Appointment or otherwise as a director or officer of
the Company or Group Company including refusing to
comply with any proper, reasonable and lawful
instructions given to him by the Board;
(iii) been guilty of conduct or permitted or suffered events
tending in the reasonable opinion of the Board to bring
themselves, the Company or any Group Company into
disrepute;
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(iv) become prevented by any applicable law or regulation
from continuing as a director or officer of the Company
or performing any of his duties;
(v) committed any act of fraud or dishonesty (whether or not
connected with the Appointment) or committed any act
which, in the reasonable opinion of the Board,
materially and adversely affects his ability properly to
carry out his duties and which is likely to bring the
Company into disrepute;
(vi) become bankrupt or claimed the benefit of any Act for
the time being in force for the relief of insolvent
debtors or proposed or made any arrangement or
composition with their creditors;
(vii) been convicted of a felony or other crime involving
moral turpitude; or
(viii) become of unsound mind, as certified by a recognized
doctor of psychiatry.
9.2 Upon termination of the Appointment however arising:
(a) The Executive shall, without prejudice for any claim that
may arise out of the termination of this Appointment,
forthwith at the request of the Board resign as a director
of the Company and from all offices held by him in any Group
Company and from all other appointments or offices which he
holds as nominee or representative of the Company or any
Group Company and, if he fails so to do, the Company is
irrevocably authorized by the Executive to appoint some
person in his name and on his behalf to execute such
documents and to do such other things as are reasonably
necessary to give effect to such resignations; and
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(b) The Executive (or, if he shall be dead, of unsound mind or
bankrupt), his personal representatives or such other
persons as shall be appointed to administer his estate and
affairs shall deliver up to the Company in accordance with
the directions of the Board all keys, security passes,
credit cards, Documents and other property belonging to or
relating to the businesses or affairs of the Company or any
Group Company, including all copies of all Documents
containing Confidential Information which may be in his
possession or under his control (or that of his personal
representatives or such other persons), and shall not retain
copies, extracts or notes of any of the same.
9.3 The Executive shall have no claim against the Company in respect of
the termination of the Appointment by reason of the merger,
consolidation, continuation, dissolution or liquidation or the sale
of all or substantially all of the assets of the Company provided
that the Executive shall have first been offered in writing a new
appointment with the successor or surviving company on terms no less
favorable to him than under this Agreement.
10. CHANGE OF CONTROL
10.1 If at any time there shall occur a "Change of Control" as that term
is defined in the Company's 1997 Equity Compensation Plan, the
Executive may at any time terminate this Agreement by giving to the
Company not less than three months notice in writing to that effect.
10.2 In the event of such termination, the Company shall pay the
Executive upon the expiration of such notice, the Termination Amount
but without any obligation to mitigate.
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11. NOTICES
Notices by either party:
(a) must be in writing addressed:
(i) to the Company at its registered office for the time
being; and
(ii) to the Executive at the address set out in this
Agreement or such other address as may be notified to
the Company from time to time.
(b) will be effectively served:
(i) on the day of receipt, where any hand-delivered letter
or facsimile transmission is received on a business day
before or during normal working hours;
(ii) on the following business day, where any hand-delivered
letter or facsimile transmission is received either on a
business day after normal working hours or on any other
day; or
(iii) on the fifth business day following the day of posting
to an overseas address of any prepaid airmail letter.
12. INDEMNITY
12.1 The Company agrees, for the avoidance of doubt, that in addition to
the protection offered by the By-laws of the Company, insofar as it
is lawfully able, to indemnify the Executive for all proper and
reasonable costs and expenses of lawyers (including disbursements
and applicable taxes) incurred by the Executive in connection with
or in relation to any claim, action or proceedings brought by any
person arising out of any allegation against the Executive in
respect of any act
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or omission by him in the course of carrying out his duties under
this Agreement and in which the Executive is a defendant.
12.2 This indemnity will continue to apply for the period of the
Appointment and for a further period of six years after the
Executive's employment with the Company has come to an end provided
that the Executive:
(a) instructs lawyers approved in writing by the Company;
(b) acts in accordance with their advice;
(c) instructs the lawyers to provide copies of correspondence and
other documentation to the Company and authorizes them to
provide any information to the Company on request;
(d) has not been guilty of gross misconduct or any breach of
contract, or has not been the subject of any of the other
conditions or circumstances set out in Clause 9.1(b), pursuant
to which the Company is entitled summarily to terminate this
Agreement; and
(e) has not (after the expiry of the Appointment) acted in breach
of any of his continuing obligations under this Agreement or
any other agreement entered into by him with the Company.
13. GENERAL
13.1 This Agreement, which contains all the terms of the Appointment, is
in substitution for all contracts between the Company and any Group
Company and the Executive (whether written, oral or governed by a
course of dealings) dated prior to the date hereof which shall be
deemed to have terminated with effect from the Effective Date.
13.2 The waiver, express or implied, by either Party of any right under
this Agreement or any failure to perform or breach by the other
shall not constitute or be deemed a
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waiver of any other right under this Agreement or of the same right
on another occasion.
13.3 No amendment, change or addition to the terms of this Agreement
shall be effective or binding on either Party unless reduced to
writing and executed by both Parties.
13.4 The Executive represents and warrants that, other than as notified
in writing to the Board, he is not a party to any agreement,
contract (whether of employment or otherwise) or understanding which
would in any way restrict or prohibit the Executive from undertaking
or performing any of the duties of the Appointment in accordance
with this Agreement.
13.5 The Executive undertakes not to disclose or communicate any terms of
the Appointment to any other employee of any Group Company or to any
third party (other than for the purpose of obtaining professional
advice or other than as required by applicable law, including the
securities laws and regulations of the United States).
13.6 Any provision of this Agreement which contemplates or is capable of
operation after the termination of the Appointment shall apply
notwithstanding termination of the Appointment howsoever arising.
13.7 This Agreement is governed by and is to be construed in accordance
with the laws of the State of New York and the Parties hereby submit
to the non-exclusive jurisdiction of the Courts of the State of New
York with respect to all matters relating to this Agreement.
13.8 The Executive hereby appoints CT Corporation System, 0000 Xxxxxxxx,
Xxx Xxxx, XX 00000 for service of process in connection with legal
proceedings in New York and arising under or in connection with this
Agreement.
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IN WITNESS WHEREOF the Parties have executed this Amended and Restated
Agreement.
Attest: PLD TELEKOM INC.
s/s E. XXXXX XXXXXXXX By: s/s XXXXX XXXXXXXXXXX
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Secretary Chairman, Compensation Committee
s/s E. XXXXX XXXXXXXX s/s XXXXX X.X. XXXX
------------------------ -----------------------------
Witness Xxxxx X.X. Xxxx
