CONFORMED COPY
STRICTLY CONFIDENTIAL
The Directors
Telewest Communications Group Limited
Xxxx 0
Xxxxxxx Xxxxxxxx Xxxx
Xxxxxx Xxxxx
Xxxxxx
Xxxxxx XX00 0XX
WITHOUT PREJUDICE
24 April 1998
Gentlemen
I am employed by the Company under a Service Agreement dated 7 August 1997 (the
AGREEMENT).
1. Subject to the conditions set out below, I hereby give notice to terminate
the Agreement on 15 June 1998.
2.1 The Company will pay me my salary and pension contributions for the month of
April 1998 in the normal course (my salary being paid at the rate of
(pound)350,000 per annum).
2.2 On or before 22 June 1998 the Company will pay me my salary for the period
to 15 June, any outstanding pension contributions due to 30 April and any
holiday pay outstanding as at 30 April and any other amounts owed to me as at
that date (including any expenses).
2.3 In addition, on 22 June 1998 or, if later, within 5 days of my complying
with paragraph 5 below, the Company will pay me, subject to deduction of income
tax and any other legally required deduction, the sum of (pound)494,375 (made up
as set out in Schedule 1), in lieu of notice and in full settlement of all my
rights, and any outstanding claims, under the Agreement, but without prejudice
to my rights under this Agreement.
3. The Company will continue to allow me to use my present company car and
retain my fuel card on the terms specified in clause 8 of the Agreement until 30
April 1999. I will then return that car to the Company's head office.
4. Notwithstanding that I shall not be an employee of any Telewest Group Company
the Company will also continue to provide private medical, permanent health and
life insurance on the terms specified in clause 7 of the Agreement until 30
April 1999, provided that no adverse change shall be made to the level of any
such cover unless it is equivalent to any such change introduced for executive
directors generally. The Company shall similarly continue the Directors and
Officers Insurance Cover presently available until 30 April 2004 and shall
indemnify me against all liabilities, costs and expenses in connection with the
claims brought against, inter alia, the Company and me by Mr Xxxx Xxxxxxxx.
5. I undertake to sign a letter of resignation as a director in the form of
Schedule 2 and to return to the Company all Telewest Group property, including
(other than my company car and fuel card), any company-sponsored credit/charge
cards, computer equipment, fax machine, board papers, documents, correspondence
and relevant copies thereof within 5 days of acceptance of this letter by the
Company.
6. The Company will procure that I will be permitted to exercise (subject to the
rules of each relevant scheme and to any applicable performance criteria) my
share options listed in Schedule 3 at any time between the first and last
exercise dates noted against each option. I accept that the option granted to me
under the Telewest 1995 Sharesave Scheme has lapsed (without prejudice to my
right to continue making contributions and to a refund of contributions).
7. It is agreed that the 475,183 shares awarded to me under the Telewest 1995
Restricted Share Scheme have vested and that the award may be exercised by me,
subject to and in accordance with the Scheme rules, as varied by the Agreement.
8. I acknowledge that all my rights in respect of an award under the Telewest
Equity Participation Plan have lapsed. It is agreed that I will receive the sum
of (pound)7,205 as compensation for the matching award of 7,790 shares (at
92.5p) which might have been made to me under the Plan. This payment will be
made at the same time and on the same terms (in particular as to any legally
required deduction of tax), as the payment due under paragraph 2 above.
9. It is agreed that I should have received two awards of shares under the
Telewest Long Term Incentive Plan as set out in Schedule 3. In order to
compensate me on terms which are as close as possible to those I would have
enjoyed had the awards been made, the provisions of Schedule 4 shall apply.
10. I accept that all the terms of the Agreement expressed to be operative after
termination (in particular, clauses 12 and 14) will remain in full force and
effect. The Company will consider favourably any request I might make for waiver
of any of the restrictions in clause 14 of the Agreement.
11. The Company will pay up to (pound)10,000 (plus VAT) direct to my legal
advisers by way of contribution to the legal fees (including disbursements)
which I have incurred in connection with the termination of my employment. The
Company will also arrange for me to receive outplacement counselling and
assistance up to a value of (pound)12,500 (plus VAT).
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12. Save as required by law or to give effect to the terms of this letter or as
required by the listing rules of the London Stock Exchange or by a regulatory
authority neither I nor the Company (contracting for itself and on behalf of
each Telewest Group Company) will, without the written consent of the other:
o disclose the terms of this agreement to anyone (other than to my
professional advisers who require the information for necessary
professional purposes);
o directly or indirectly make any statement about matters concerning my
directorship of the Company and all my other Telewest Group
directorships or my employment with the Company (other than in the form
of the attached public announcements); or
o make any derogatory or disparaging comment about me, the Company any
Telewest Group company, any corporate shareholder of Telewest
Communications plc as at the date of this Agreement, or any of its or
their respective directors or employees.
Providing that the Company may respond to proper enquiries by, or on behalf of,
shareholders, in a manner consistent with the attached public announcements.
13. In this letter Telewest Group shall mean any of:
o Telewest Communications plc; and
o any subsidiary of Telewest Communications plc from time to time.
Yours sincerely
XXXXXXX XXXXXXXX
I agree to the terms set out above.
XXXX XXXX 24 APRIL 1998
.............................. .........................
for and on behalf of Telewest Date
Communications Group Limited
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SCHEDULE 1
SUM PAYABLE IN LIEU OF NOTICE
(pound)
Salary 350,000
Pension Contributions 35,000
Bonus ((pound)350,000 x 25% x 125%) 109,375
-------
Total 494,375
=======
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SCHEDULE 2
The Directors of Telewest Communications plc
24 April 1998
Gentlemen
I hereby resign with immediate effect as a Director of Telewest Communications
plc (the COMPANY) and as a Director of the companies listed in the Schedule
hereto and of any other direct or indirect subsidiary of the Company of which I
am currently a director (the COMPANIES).
I confirm that, save for my rights under the letter dated 24 April 1998 from me
to the Company, I have no claim outstanding against the Company, or any of its
corporate shareholders as at 24 April 1998, or any of the Companies and/or any
of its or their respective directors, officers or employees in respect of any
cause, matter or thing whatsoever, but to the extent that any such claim exists
or may exist, I hereby irrevocably waive such claim and release the Company, its
corporate shareholders as at 24 April 1998, and the Companies from any liability
whatsoever in respect thereof.
SCHEDULE
ATTACHED
SIGNED as a DEED and delivered )
by _____ _____ in the presence of: )
Witness:
Signature:
Name:
Address:
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SCHEDULE 3
THE TELEWEST SHARE OPTION SCHEMES
--------------------- ------------------ ------------------ ---------------------- ---------- -----------
SCHEME DATE OF AWARD FIRST EXERCISE LAST EXERCISE DATE NO. OF EXERCISE
DATE SHARES PRICE
--------------------- ------------------ ------------------ ---------------------- ---------- -----------
Executive Options 11 March 1996 11 March 1999 11 September 1999 21,277 141.0p
(No.1)
--------------------- ------------------ ------------------ ---------------------- ---------- -----------
Executive Options 11 March 1996 11 March 1999 11 September 1999 86,302 141.0p
(No.2)
--------------------- ------------------ ------------------ ---------------------- ---------- -----------
Executive Options 16 June 1995 16 June 1998 30 April 1999 166,880 171.5p
(No.2)
--------------------- ------------------ ----------------------------------------- ---------- -----------
Sharesave 4 1 February 1998 These options will lapse 16,810 58.0p
--------------------- ------------------ ----------------------------------------- ---------- -----------
THE TELEWEST LONG TERM INCENTIVE PLAN
--------------------- ----------------------- ----------------------------------
DATE OF AWARD NUMBER OF SHARES PROPORTION OF RELEVANT SHARES
--------------------- ----------------------- ----------------------------------
November 1997 410,036 15/36ths
--------------------- ----------------------- ----------------------------------
March 1998 364,129 3/36ths
--------------------- ----------------------- ----------------------------------
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SCHEDULE 4
DEFINITIONS
ALLOCATION means a promise to transfer shares in the Company in accordance with
the rules of the Plan;
PAYMENTS means the cash payments or Shares representing a value equal to such
cash payments, set out in paragraphs 1 and 2 below or either of them;
COMPANY means Telewest Communications plc (for the purposes of this Schedule).
PERFORMANCE PERIOD means:
(a) in respect of the Payment payable under paragraph 1 below, 1 January 1997
to 31 December 1999;
(b) in respect of the Payment payable under paragraph 2 below, 1 January 1998
to 31 December 2000;
NOTICE OF EXERCISE means a notice substantially in the form set out in Appendix
2 to this Schedule.
PARTICIPANT means a person who has been given an Allocation under the Plan;
PLAN means the Telewest Long Term Incentive Plan;
REMUNERATION COMMITTEE means the Remuneration Committee of the Company.
SHARES means Shares in the Company
1. Within 10 working days of the service of a Notice of Exercise by the
Executive (which may not be served before 31 December 1999 or after 31 January
2000) the Company shall pay the Executive a cash sum or, at the election of the
Remuneration Committee, transfer Shares equal in value to such cash sum, subject
to paragraphs 3 to 8 below, calculated in accordance with the following formula:
15
A x B x ---- = C
36
Where:
A is 410,036;
7
B is the Company's middle market share price (per Share) either:
o at the close of business on the date immediately preceding the
date on which a Notice of Exercise is served or, where
appropriate, an event within paragraph 4 below occurs; or
o at the close of business on the tenth working day preceding
the date of payment to the personal representatives under
paragraph 7 below.
15
C is the product of A x B x ---- in cash or Shares, the
36
value of which at the close of business on the date of valuation
referred to in this paragraph is equal to such cash sum. In the event
that the cash sum cannot be represented by a whole number of Shares,
the number of Shares shall be rounded up to the next whole number.
2. Within 10 working days of the service of a Notice of Exercise by the
Executive (which may not be served before 31 December 2000 or after 31 January
2001) the Company shall pay the Executive a cash sum or, at the election of the
Remuneration Committee, transfer Shares equal in value to such cash sum, subject
to paragraphs 3 to 8 below, calculated in accordance with the following formula:
3
D x E x ---- = F
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Where:
D is 364,129;
E is the Company's middle market share price (per Share) either:
o at the close of business immediately preceding the date on
which a Notice of Exercise is served, or where appropriate,
the occurrence of an event within paragraph 4 below occurs;
o at the close of business on the tenth working day preceding
the date of payment to the personal representatives under
paragraph 7 below.
3
F is the product of D x E x ---- in cash or Shares, the
36
value of which at the close of business on the date of valuation
referred to in this paragraph is equal to such cash sum. In the event
that the cash sum cannot be represented by a whole number of Shares,
the number of Shares shall be rounded up to the next whole number.
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3. Except where paragraph 4 below applies, such percentage of the Payments set
out in paragraphs 1 and 2 above shall be paid as the conditions in Appendix 1 to
this Schedule provide (RELEVANT PAYMENTS).
4. If any person obtains control of the Company (within the meaning of section
840 of the Income and Corporation Taxes Act 1988) as a result of making a
general offer to acquire shares in the Company or having obtained such control
makes such an offer, or if any person becomes bound or entitled to acquire
shares in the Company under sections 428 to 430F of the Companies Act 1985, or
if under section 425 of the Companies Act 1985 the Court sanctions a compromise
or arrangement proposed for the purposes of or in connection with a scheme for
the reconstruction of the Company or its amalgamation with any other company or
companies, or if the Company passes a resolution for voluntary winding up, or if
an order is made for the compulsory winding up of the Company the Payments shall
be made in full to the Executive within 10 working days thereof (subject always
to paragraph 8 below).
5. For the purposes of paragraph 4 above, a person shall be deemed to have
obtained control of the Company if he and others acting in concert with him have
together obtained control of it.
6. In the event of any increase or variation of the share capital of the Company
(whenever effected), the Remuneration Committee may adjust the Payments as it
considers appropriate but in a manner consistent with any adjustment made to the
entitlements of at least a majority of the Participants in the Plan. As soon as
reasonably practicable after making any such adjustment the Company shall give
notice in writing to the Executive at his last known address.
7. If the Executive dies after the end of the relevant Performance Period but
before either or both of the Payments are paid, the outstanding Relevant
Payments shall be paid to the Executive's personal representatives as soon as
practicable following the death of the Executive. If the Executive dies before
the end of either of the Performance Periods, the Relevant Payments shall not be
made before the end of the respective Performance Periods.
8.1 Where the Payment is a cash sum, the Company shall withhold or make
necessary deductions from the Payment in respect of any tax or social security
contribution it is required to deduct from any such payment:
8.2 Where the Payment is a transfer of Shares and the Company is obliged to
account for any tax and/or any social security contributions recoverable from
the Executive (together, the TAX Liability) for which the Executive is liable by
virtue of being entitled to the transfer of Shares, the Company shall not be
obliged to transfer the Shares, unless either it has received on or prior to the
transfer of the Shares payment from the Executive of an amount not less than the
Tax Liability, or the Executive has entered into arrangements reasonably
acceptable to the Company to secure that such a payment is made.
9
9. In the event of any dispute or disagreement as to the interpretation of this
Schedule, or as to any question or right arising from or related to this
Schedule, the decision of the Remuneration Committee shall be final and binding
provided that it is accepted that any entitlement pursuant to this Schedule
shall be generally no less favourable (other than in relation to the proportion
of Relevant Shares applicable) than that of the majority of the Participants in
the Plan.
10. Any alterations made pursuant to Rule 7 of the Plan shall also be made to
the terms of this Schedule, where relevant.
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APPENDIX 1
THE SCHEDULE TO THE PLAN
PART A
1. For the purposes of this Appendix:
(a) TSR means total shareholder return, calculated by Datastream after:
(i) reinvesting dividends (plus associated tax credits) on a
company's shares on the day on which the shares went
ex-dividend on the London Stock Exchange;
(ii) making such adjustments to take account of any increase or
variation of the share capital of a company as the
Remuneration Committee considers relevant; and
(iii) averaging the index of closing share prices and reinvested
dividends for the period of three months preceding the
Performance Period and averaging the index of closing share
prices and reinvested dividends for the final three months of
the Performance Period.
(b) THE FT-SE 100 INDEX means the Financial Times - Stock Exchange index of
the market values of 100 leading UK equities;
(c) THE COMPARATOR COMPANIES means the group of companies set out in Part B
of this Appendix (or such other such group of companies as the Board
may decide from time to time before a Payment is made, taking into
account any factors considered by the Board to be relevant);
(d) THE RELEVANT FT-SE 100 COMPANIES means the companies which were the
constituent companies for the purposes of the FT-SE 100 Index at the
commencement of the Performance Period in question and, if it was not
such a company, the Company;
(e) THE RELEVANT COMPARATOR COMPANIES means the Company and the Comparator
Companies which were listed on the London Stock Exchange at the
commencement of the Performance Period in question;
(f) any reference to the Company's position is a reference to what would be
its position in a table of the Relevant FT-SE 100 Companies or a table
of the Relevant Comparator Companies arranged in descending order
according to the TSR of each of them for the Performance Period;
(g) in the event that one of the Relevant FT-SE 100 Companies or one of the
Relevant Comparator Companies is taken over, the TSR of that company
shall be calculated up to the date of change of control (within the
meaning of section 840 of the Income and Corporation Taxes Act 1988) of
that company on the basis that:
11
(i) if the takeover is on terms that an offer wholly or partly in
cash is made to shareholders, that cash is assumed to have
been reinvested in the FT-SE 100 Index for the balance of the
Performance Period;
(ii) if the takeover is on terms that it is compulsory for part or
all of the offer to be satisfied in the form of shares, those
shares are assumed to be held until the end of the Performance
Period.
(h) in the event of a demerger of one of the Relevant FT-SE 100 Companies
or one of the Relevant Comparator Companies into two or more companies
quoted on a recognised stock exchange (within the meaning of that term
as set out in section 841 of the Income and Corporation Taxes Act
1988), the TSR of the relevant company will be calculated by
aggregating the total shareholder return of the demerged company or
companies and the company from which it or they demerged for the part
of the Performance Period following the demerger become effective.
2. If one of the events specified in paragraph 4 of Schedule 4 of this Agreement
occurs, for the purposes of the calculation of TSR the middle-market quotation
of the Relevant FT-SE 100 Companies or the Relevant Comparator Companies on such
date shall be taken as the final share price of such companies (and the final
share price shall not be averaged) and the final share price of the Company
shall be taken as the most valuable option offered to shareholders in the
Company as at the date of such event.
3. The percentage of the Payment, when TSR is measured against the Relevant
FT-SE 100 Companies, is as follows:
(a) 50% of the Payment if the Company is in the 25th (or a higher) position;
(b) 12 1/2% of the Payment if the Company is in the 50th position;
(c) 0% of the Payment if the Company is in the 51st (or a lower) position;
and pro rata for positions between those specified at (a) and (b) above.
4. The percentage of the Payment, when TSR is measured against the Relevant
Comparator Companies, is as follows:
(a) 50% of the Payment if the Company has an upper quartile position;
12
(b) 12 1/2% of the Payment if the Company is at the median position (or if
there is no median position, the position immediately above the median
position);
(c) 0% of the Payment if the Company is below the median position;
and pro rata for positions between those specified at (a) and (b) above.
5. The Remuneration Committee may make such adjustments to the method of
calculating TSR or any other feature of this Appendix as it considers
appropriate to ensure that the condition in this Appendix achieves its original
purpose.
PART B
LIST OF COMPARATOR COMPANIES
British Telecommunications plc
Vodafone Group plc
Orange plc
General Cable plc
British Sky Broadcasting Group plc
Flextech plc
Eurotunnel plc
Comcast Corp
Nynex Corporation
International CabelTel Corp
Carlton Communications plc
Yorkshire Tyne Tees Television Holdings plc
HTV Group plc
Scottish Television plc
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APPENDIX 2
NOTICE OF EXERCISE
Mr Xxxxxxx Xxxxxxxx
Xxxxxxxxx House
Whiteleaf
Princes Risborough
Bucks HP17 0LL
The Directors
Telewest Communications plc
Genesis Business Xxxx
Xxxxxx Drive
Woking
Surrey GU21 5RW
[Date]
Dear Sirs
AGREEMENT DATED 24 APRIL 1998 (THE AGREEMENT)
Pursuant to paragraph [1] [2] and subject to any deduction pursuant to paragraph
8 of the Schedule to the Agreement I hereby serve a Notice of Exercise with the
effect that you shall make the Relevant Payments to me by cheque or by delivery
of Shares, such cheque or Shares to be received by me not later than 10 working
days of the date of this notice.
Yours faithfully
XXXXXXX XXXXXXXX
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PUBLIC AND INTERNAL ANNOUNCEMENT
FOLLOWING RESIGNATION
ATTACH ANNOUNCEMENTS.
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