EXHIBIT 10.27
Dated 3 November 1999
UPC SERVICES LIMITED
and
XXXXX X'XXXXX
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EXECUTIVE SERVICE AGREEMENT
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THIS AGREEMENT is made on 3 November 1999
BETWEEN:-
(1) UPC SERVICES LIMITED, a limited liabilty company duly organised and existing
under the laws of England and Wales, whose registered office is at 00
Xxxxxxxx Xxxx, Xxxxxx X0X 0XX Xxxxxx Xxxxxxx (the "COMPANY"); and
(2) XXXXX X'XXXXX of 00 Xxxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxx XX00 0XX (the
"EXECUTIVE").
THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
In this agreement unless the context otherwise requires:-
1.1 "UPC" means United Pan-Europe Communications N.V.; UnitedGlobalCom means
United Global Com, Inc.;
1.2 "MANAGEMENT BOARD" means the management board of UPC;
1.3 "GROUP COMPANIES" means the Company, its holding company and all subsidiary
and associated companies of its holding company;
1.4 "ASSOCIATED COMPANY" means a company which falls to be so treated as such
for the purposes of Statement of Standard Accounting Practice No.1 of the
Institute of Chartered Accountants in England & Wales;
1.5 "SUBSIDIARY" and "HOLDING COMPANY" have the meanings given to them in
section 736 of the Companies Xxx 0000;
1.6 "COMMENCEMENT DATE" shall mean 8 November 1999.
2. TERM AND APPOINTMENT
2.1 The Company shall engage the Executive and the Executive shall serve the
Company as an employee and director as hereinafter provided (the
"APPOINTMENT").
2.2 The Appointment shall commence on the Commencement Date and shall be for a
fixed term of four years from the Commencement Date ("THE FIXED TERM").
2.3 The parties have agreed that the Executive shall be entitled to payment of
the liquidated damages ("THE LIQUIDATED DAMAGES") specified in clause 2.5 in
the following circumstances:
(a) If the Executive terminates the Agreement during the Fixed Term in
response to and as a result of a fundamental breach by the Company of
this Agreement; and/or
(b) If the Company terminates the Agreement before the expiry of the Fixed
Term otherwise than in circumstances which would warrant a summary
termination under Clause 13.
2.4 The parties agree that the Executive is unlikely to terminate the Agreement
during the Fixed Term save in the circumstances set out in clause 2.3
(a) above. With a view to avoiding the time and cost involved in litigation,
the parties have agreed the following Liquidated Damages and that such
Liquidated Damages represent a genuine pre-estimate of the loss which the
Executive would suffer if the Appointment is terminated in the circumstances
set out in clause 2.3 (a)-(b) above. The parties further agree that the
Executive is not obliged to mitigate his loss or bring into account any
earnings following termination of the Agreement under this clause. The
payment of Liquidated Damages under this clause shall be in full and final
settlement of all or any claims that the
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Executive may have arising out of this Appointment or its termination in the
circumstances set out in clause 2.3 (a)-(b) above.
2.5 The Company shall pay the Liquidated Damages to the Executive within 14 days
of the effective date of termination ("THE TERMINATION DATE"). The
Liquidated Damages shall be a sum representing the Salary (including
reasonable annual increments) and the value of all contractual benefits,
which would have been payable or provided by the Company to the Executive
between the Termination Date and the first date on which the Company could
lawfully have terminated the Appointment pursuant to clause 2.2.
2.6 The parties agree that in calculating the Liquidated Damages each of the
sums set out in 2.5 shall be calculated net of all or any Income Tax and
National Insurance which would otherwise have been payable by the Executive
on these sums.
2.7 Further, if the Appointment is terminated in the circumstances set out in
clause 2.3 (a)-(b) above, all share options (including for the avoidance of
doubt the 250,000 UPC share options as referred to in clause 5.3 below)
which shall have been awarded to the Executive as at the Termination Date,
shall vest and the Executive shall be entitled to exercise the options at a
price equal to USD 4 less the issue price of UPC's Secondary Offering of
shares on the 19th of October 1999. If there is any conflict between the
terms of the share option scheme and this Agreement, the terms of this
Agreement shall take precedence.
2.8 The parties further agree that each of the sums set out in clause 2.5 and
the vesting of the options in clause 2.7 shall be separate and severable and
that if a Court were to consider any of these sums set out in 2.5 to be a
penalty payment, such sum could be severed from the remaining sums and not
form part of the calculations of Liquidated Damages and that the remaining
sum would be valid and enforceable.
2.9 In circumstances that lead to a change of control of UPC or UnitedGlobalCom,
the Executive shall be afforded the same treatment of his compensation
package, including for the avoidance of doubt the 250,000 UPC share options
referred to in clause 5.3 below, as will then have been afforded to UPC's
Chief Executive Officer, currently Mr. Xxxx Xxxxxxxxx.
3. DUTIES
3.1 During the Appointment the Executive shall devote the whole of his
professional time and attention to the duties assigned to him and shall well
and faithfully serve the Company and use his reasonable endeavours to
promote the interests of the Company and subject thereto the Executive shall
perform the duties of Managing Director responsible for Strategy,
Acquisitions, and Corporate Development reporting directly to the Chief
Executive Officer of UPC N.V. The Executive shall also be recommended for
appointment to the Management Board of UPC. One of the understandings of the
Executive in entering into this agreement is that he will be appointed to
the Management Board of UPC.
3.2 The Executive may be reasonably required in pursuance of his duties
hereunder:-
(a) to perform services not only for the Company but also for any of the
Group Companies;
(b) to travel to such places whether in or outside the United Kingdom by
such means and on such occasions as the Company may require and in
particular to the Netherlands;
(c) to make appropriate reports to the Board and/or the Board of its holding
company on any matters concerning the affairs of the Company or any other
Group Company as it or they may reasonably require.
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3.3 Notwithstanding the foregoing or any other provision of this agreement the
Company shall not be under any obligation to vest in or assign to the
Executive any powers or duties and may at any time require the Executive to
perform:-
(a) all his normal duties;
(b) a part only of his normal duties and no other duties;
(c) such duties as it may reasonably require and no others;
(d) no duties whatever;
and may from time to time suspend or exclude the Executive from the
performance of his duties and/or from all or any premises of the Company for
the period of three months in total at any one time without the need to give
any reason for so doing but his salary will not cease to be payable (in
whole or in part) nor will he cease to be entitled to any other benefits
hereunder by reason only of such requirement as mentioned in paragraphs
3.3(b) to 3.3(d) of this clause or such suspension or exclusion (unless or
until his employment under this agreement shall be terminated).
4. HOLIDAY ENTITLEMENT
During the Appointment the Executive shall be entitled to 25 working days'
holiday (in addition to public holidays) in each calendar year January to
December at full salary to be taken at such time or times as may be approved
by the Board. Holidays can only be carried over to the subsequent year with
the prior approval of the Board. Upon the termination of the Appointment
either the Executive shall be entitled to receive payment in lieu of accrued
holidays not taken at that date (provided that such determination is not
pursuant to clause 13) or the Company shall be entitled to make a deduction
from the Executive's remuneration in respect of holidays taken in excess of
the accrued entitlement.
5. REMUNERATION
5.1 During the Appointment, as remuneration for his services hereunder, the
Executive shall be paid a fixed salary at the rate of L250,000 gross per
annum payable in equal monthly instalments in arrears on or before the last
working day of each calendar month.
5.2 The amount of the Executive's salary will be increased subject to annual
performance evaluation in January of each year.
5.3 The Executive shall receive 250,000 UPC share options at an exercise price
equal to USD 4 less than the issue price of UPC's Secondary Offering of
shares as valued on 19 October 1999. The shares shall vest monthly over 48
months. The Executive shall be eligible to receive future share option
grants, such grants to be reviewed annually.
6. EXPENSES
The Executive shall be entitled to recover all reasonable travelling, hotel
and other expenses properly authorised by the Board and incurred in or about
the performance of the duties hereunder, which expenses shall be evidenced
in such manner as the Company may specify from time to time.
7. COMPANY CAR
To assist in the performance of the duties hereunder the Company shall during
the Appointment provide the Executive with a car allowance in line with
function, subject to any terms and conditions of the Company's car policy.
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8. PENSIONS
The Executive is entitled to participate in the UPC Services Limited Group
Personal Pension Plan as exists from time to time. In line with Company
policy, the Company will pay into the plan such contributions as are
appropriate to the Executive's status as director.
9. BENEFITS
9.1 The Executive and his family are entitled to become members of the Company's
Private Medical Insurance scheme subject to the rules of the scheme as
amended from time to time. All monthly premiums will be borne by the
Company. Full details of the scheme are available from Human Resources.
9.2 The Executive may participate in the Company's Permanent Health Insurance
scheme subject to the rules of the scheme as amended from time to time. Full
details of the scheme are available from Human Resources.
9.3 The Company will provide the Executive with group life assurance cover. Full
details of the scheme are available from Human Resources.
10. CONFIDENTIAL INFORMATION/TRADE SECRETS/NON-COMPETITION
The Executive shall be subject to the Company's policy in respect of
confidential information and trade secrets and non-competition as set out in
Schedule 2 attached.
11. INVENTIONS AND CREATIVE WORKS
11.1 The Executive acknowledges that because of the nature of his duties and the
particular responsibilities arising as a result of such duties which he owes
to the Company and the Group Companies he has a special obligation to
further the interests of the Company and the Group Companies. In particular
the duties of the Executive shall include reviewing the products and
services of the Company and Group Companies with a view to improving them by
new and/or original ideas and inventions and implementing such improvements.
11.2 The Executive shall promptly disclose to the Company any idea, inven-tion
or work which is relevant to or capable of use in the business of the
Company or any of the Group Companies made by the Executive in the course of
his employment whether or not in the course of his duties. The Executive
acknowledges that the intellectual property rights subsisting or which may
in the future subsist in any such ideas, inventions or works created by him
in the course of his employment will, on creation, vest in and be the
exclusive property of the Company and where the same does not automatically
vest as aforesaid, the Executive shall assign the same to the Company (upon
the request and at the cost of the Company). The Executive hereby
irrevocably waives any rights which he may have in any such ideas,
inventions or works which are or have been conferred upon him by chapter IV
of part I of the Copyright, Designs and Patents Xxx 0000 headed "Moral
Rights"
11.3 The Executive hereby irrevocably appoints the Company to be his attorney in
his name and on his behalf to execute and do any such instrument or thing
and generally to use his name for the purpose of giving to the Company or
its nominee the full benefit of the provisions of this clause 11 and
acknowledges in favour of any third party that a certificate in writing
signed by any Director or Secretary of the Company that any instrument or
act falls within the authority hereby conferred shall be conclusive evidence
that such is the case.
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12. CONFLICT OF INTEREST AND INTEGRITY POLICY
The Executive shall be subject to the Company's policy in respect of conflict
of interest and integrity as set out in Schedule 3 attached.
13. TERMINATION BY EVENTS OF DEFAULT
13.1 The Appointment shall be subject to summary termination at any time by the
Company by notice in writing if the Executive shall:-
(a) have committed any serious breach or (after warning in writing) any
repeated or continued material breach of the obligations hereunder; or
(b) shall have been guilty of any act of dishonesty or serious misconduct or
any conduct which in the reasonable opinion of the Board tends to bring
himself, the Company or any of the Group Companies into disrepute
including but not limited to any serious breach of the companies'
Conflict of Interest and Integrity Policy as set out in Schedule 3; or
(c) shall be declared bankrupt;
(d) be convicted of any criminal offence under the laws of the countries of
the United Kingdom and the Netherlands (excluding road traffic offences).
13.2 Any delay by the Company in exercising such right to termination shall not
constitute a waiver thereof.
14. INCAPACITY
If the Executive shall be incapacitated during the Appointment by ill-health
or accident from performing his duties hereunder for an aggregate of 130
working days or more in any period of 12 months the Company may by written
notice to the Executive forthwith (or as from a future date specified in the
notice) discontinue payment in whole or part of the remuneration under
clause 5 above until such incapacity shall cease or (whether or not his
remuneration shall have been discontinued as aforesaid) determine the
Appointment provided that the Company shall take all reasonable steps to
ensure that the Executive receives benefits pursuant to clause 9. Subject as
aforesaid the said remuneration shall continue to be payable to the
Executive under clause 5 notwithstanding such incapacity but the Company
shall be entitled to set off or deduct therefrom the amount of any sickness
or other benefit to which the Executive is entitled under Social Security
legislation for the time being in force.
15. OBLIGATIONS UPON TERMINATION
Upon the termination of the Appointment howsoever arising the Executive
shall:-
15.1 at any time or from time to time thereafter upon the request of the
Company, resign without claim for compensation from:-
(d) all offices held in the Company or any of the Group Companies; and
(e) membership of any organisation and any office in any other company
acquired by reason of or in connection with the Appointment;
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;
15.2 deliver to the Board all documents (including, but not limited to,
correspondence, lists of clients or customers, notes, memoranda, plans,
drawings and other documents of whatsoever nature and all
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copies thereof) made or compiled or acquired by the Executive during the
Appointment and concerning the business, finances or affairs of the Company
or any of the Group Companies or customers
16. RECONSTRUCTION AND AMALGAMATION
If at any time the Executive's employment is terminated in connection with
any reconstruction or amalgamation of the Company or any of the Group
Companies whether by winding up or otherwise and the Executive receives an
offer on terms which (considered in their entirety) are not less favourable
to any material extent than the terms of this agreement from a company
involved in or resulting from such reconstruction or amalgamation the
Executive shall have no claim whatsoever against the Company or any such
company arising out of or connected with such termination.
17. NOTICES
Any notice to be given hereunder shall be in writing. Notices may be given by
either party by personal delivery or post or by fax, to be confirmed,
addressed to the other party at (in the case of the Company) its registered
office for the time being and (in the case of the Executive) his last known
address and any such notice given by letter or fax shall be deemed to have
been served at the time at which the letter was delivered personally or
transmitted or if sent by post would be delivered in the ordinary course of
first class post.
18. PREVIOUS CONTRACTS
18.1 This agreement is in substitution for any previous contract of service
between the Company or any of the Group Companies and the Executive which
shall be deemed to have been terminated by mutual consent as from the
commencement of the Appointment.
18.2 The Executive hereby warrants and represents to the Company that he will
not, in entering into this agreement or carrying out his duties hereunder,
be in breach of any terms of employment whether express or implied or any
other obligation binding upon him.
19. PROPER LAW
This agreement shall be governed and construed in all respects in accordance
with English law.
20. CONSTRUCTION
20.1 The headings in this agreement are inserted for convenience only and shall
not affect its construction.
20.2 Any reference to a statutory provision shall be construed as a reference to
any statutory modification or re-enactment thereof (whether before or after
the date hereof) for the time being in force.
21. STATUTORY INFORMATION AND SCHEDULES
Schedule 1 hereto (in addition to this agreement) constitutes a written
statement as at the date hereof of the terms of employment of the Executive
in compliance with the provisions of the Employment Rights Xxx 0000.
This agreement together with Schedules 1 to 3 constitute the entire agreement
between the Executive and the Company.
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IN WITNESS whereof this agreement has been executed as a deed on the date first
before written.
Signed as a deed by the said
XXXXX X'XXXXX
in the presence of:-
Signed by XXXX X. XXXXXXXXX
Duly authorised for and on behalf of
UPC SERVICES LIMITED
in the presence of:-
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SCHEDULE 1
1. The Executive has been continuously in the employment of the Company
(including reckonable service with any of the Group Companies) since 8
November 1999.
2. Rate of remuneration and the intervals at which it is paid are contained in
clause 5.
3. There are no specific terms and conditions relating to hours of work except
as provided in clause 3.1.
4. The terms and conditions relating to holidays are contained in clause 4 and
those relating to sickness are contained in clause 14.
5. Particulars as to the length of notice to terminate are contained in clause
2.
6. Particulars as to the work for which the Executive is employed are contained
in clause 3.
7. Subject to clause 3.2 the Executive's place of work at the date of this
schedule is London.
8. There are no disciplinary rules applicable to the Executive except as
provided in this agreement and if the Executive is dissatisfied with any
disciplinary decision he should apply orally or in writing to the Board.
9. Any application for the purpose of seeking redress of any grievance relating
to the Executive's employment should be made either orally or in writing to
the Board.
10. Details of the Executive's work outside the UK are contained in clause 3.2.
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SCHEDULE 2
TRADE SECRETS, CONFIDENTIAL INFORMATION AND NON-COMPETITION
During the Appointment, the Executive will acquire knowledge of confidential and
propriety information regarding, among other things, the Company's and the
Group's present and future operations, its customers and suppliers, pricing and
bidding strategies, and the methods used by the Company and its employees.
Therefore, the Executive hereby agrees to the following:
A. During the Appointment and after the termination of the Appointment the
Executive will hold in a fiduciary capacity for the benefit of the Company,
and shall not directly or indirectly use or disclose any Trade Secret, as
defined below, that the Executive may require during the Appointment for so
long as such information remains a trade secret. The term "TRADE SECRET" as
used in this agreement shall mean information including, but not limited to,
technical or non-technical data, a formula, a pattern, a compilation, a
program, a device, a method, a technique, a drawing, a process, financial
data, financial plans, product plans or a list of actual or potential
customers or suppliers which:
(1) derives economic value, actual or potential from not being generally
known to, and not being readily ascertainable by proper means by other
persons who can obtain economic value from its disclosure or use; and
(2) is the subject of reasonable efforts by the Company or its Group to
maintain its confidentiality.
B. In addition to A above and not in limitation thereof, the Executive agrees
that, during the Appointment and for a period of 2 years after termination,
the Executive will hold in a fiduciary capacity for the benefit of the
company and the Group, and shall not directly or indirectly use or disclose,
any Confidential or Propriety information, as defined below, that the
Executive may have acquired (whether or not developed or compiled by the
Executive and whether or not the Executive was authorised to have access to
such information) during the term of, in the course of or as a result of the
Appointment. The term "CONFIDENTIAL OR PROPRIETARY INFORMATION" as used in
this Agreement means any secret, confidential, or proprietary information of
the Company not otherwise included in the definition of "Trade Secret" above
and does not include information that has become generally available to the
public by the act of one who has the right to disclose such information
without violating any right of the client to which such information
pertains.
C. The Executive agrees that for a period of 6 months after termination of the
Appointment he or she will not hire or attempt to hire for any purpose
whatsoever (whether as an employee, consultant, adviser, independent
contractor or otherwise) any senior employee of the Company or the Group or
any person who was a senior employee of the Company or the Group at any time
during the one year period prior to termination of the Appointment in either
case provided that the Executive had contact with such employee during the
12 months prior to termination of employment.
D. The Executive agrees that for a period of six months after termination of the
Appointment he will not solicit or interfere with or endeavour to entice
away from the Company of any of the Relevant Group Companies any senior
person, or any firm, company or entity who was a supplier to the Company
whom the Executive was concerned or had personal contact with during the 12
months prior to termination of employment;
E. The covenants contained in this Schedule shall inure to the benefit of the
Company, and successor of it and every subsidiary and affiliate.
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SCHEDULE 3
CONFLICT OF INTEREST AND INTEGRITY POLICY
A. An employee of the Company shall conduct his/her business and personal
affairs with such ethics and integrity that no conflict of interest with the
Company's business, real or implied, can be construed. A conflict of
interest shall be deemed to exist if an employee or an Affiliate (as defined
in E below) of an employee has any interest (including, but not limited to
equity ownership, interest arrangement, commission, gift) direct or
indirect, in a client, supplier, contractor, or other principle dealing with
the Company or the Group, and that interest is of such extent or nature that
it might reasonably be perceived by the Board to affect the employee's
judgement or decisions exercised on behalf of the Company.
B. An employee or any Affiliate of the employee shall not personally or on
behalf of the Company receive or be involved with any kickbacks, bribes,
gratuities, reciprocal arrangements or other improper or illegal
arrangements, or benefit personally from any rebates or discounts, with any
other organizations and personnel conducting or soliciting, currently or
prospectively, the business with the Company and the Group.
C. An employee of the Company shall not bring the company into disrepute. More
specifically, an employee or any Affiliate of an employee shall not permit
or be involved in any direct or indirect pay, award, commission, or other
compensation to any person or organisation for purposes of improperly or
illegally inducing action of any kind whatsoever.
D. Where any questionable outside business activity is contemplated, an employee
must obtain prior approval of the Board.
E. For purposes of this policy, Affiliate shall include, but not limited to,
any immediate relative by blood or by marriage or any entity in which the
employee or any such relative may have any financial interest where the
employee also has voting, controlling and/or management interest.
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