EXHIBIT 10.27
[FLAG TELECOM LETTERHEAD]
31 October 2002
Xxxxx Xxxx
Xxxxx No 13, Bin Himd Residential Compound
Kayyal Street
Rawdah District
Jeddah, Western Province
Saudi Arabia 21411
TERMINATION AGREEMENT
Dear Xxxxx,
This letter agreement (this "AGREEMENT") sets forth the terms of your
termination from employment as advisor to the Chairman and CEO of FLAG Telecom
Group Limited and as President of FLAG Telecom Development Services Company LLC,
both limited companies organized under the laws of Bermuda and Egypt
respectively (hereinafter collectively referred to as the "COMPANY").
1. RESIGNATION
Effective as of November 1, 2002, (the "TERMINATION DATE"), you
will cease to be an employee of the Company and its subsidiaries (collectively,
the "COMPANIES"). By signing this Agreement, you hereby resign as of the
Termination Date as a director of the Company, as a director of any of the other
Companies for which you are then serving as a director, and from every other
capacity in which you serve the Companies, including, if applicable, as an
officer or employee.
2. SEVERANCE BENEFITS
(a) Your termination of employment hereunder shall be treated as a
termination without Cause under your "Amended Employment Agreement"
(hereinafter, the "EMPLOYMENT AGREEMENT"); provided, however, your right to
receive payments and benefits as a
result of such termination shall only be governed by the terms of this Agreement
and not the Employment Agreement which shall become null and void on the
Termination Date except as specifically provided herein. On the Termination
Date, the Company shall pay to you a severance payment of $610,000 in U.S.
dollars (without any withholding as per prior practice) in same day funds. This
Agreement will be null and void in case such amount is not paid in full on the
Termination Date.
(b) The Company shall pay to you on the Termination Date or as soon
as practicable thereafter, but in no event later than 14 days after the
Termination Date, in accordance with the policies of the Company as currently in
effect, your accrued, but unpaid compensation under the Employment Agreement,
including accrued and unused vacation, living allowance, and reimburse your
expenses for the period ending on the Termination Date, in accordance with the
Company's expense reimbursement policy, to the extent not already paid or
reimbursed.
(c) You shall continue to benefit from and be subject to the legal
expense payment provisions in Sections 6.4.1 and 6.4.2 of the Reorganization
Plan of the Company, as confirmed by the US bankruptcy court on September 26,
2002 and as effective as October 9, 2002. In case needed for your defense of any
securities class action lawsuit filed against you, the Company will grant you
and/or your attorneys reasonable access to relevant documents or any other
written material and/or personnel of the Company.
(d) You shall be entitled to retain the "Retention Payment Amount"
paid under the Employment Agreement.
(e) You shall continue to be covered by the directors and officers
insurance of the Company in the same manner, and to the same extent, as the
active directors and officers of the Company with regard to actions and
inactions while a director and officer of the Company. If the Company elects to
extend and/or continue the directors and officers liability insurance policy of
FLAG Telecom Holdings Limited in effect immediately prior to the Effective Date
for the benefit of the former directors and officers of FLAG Telecom Holdings
Limited generally, then you shall be eligible for the same coverage as such
other directors and officers subject to any generally applicable limitations in
such policy. Your right to any such coverage shall be governed solely by the
terms and conditions of such policy or extension and are in no way guaranteed by
the Company or its affiliates.
(f) You shall be indemnified by the Company in accordance with the
Bye-Laws of the Company as in effect on the Effective Date with respect to acts
or omissions as an officer or director.
(g) Except as specifically provided herein, or as otherwise may be
required by law, you shall not be entitled to receive any other payments,
benefits or severance amounts from the Company following the Termination Date.
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3. COVENANT
You shall continue to be bound by the provisions of your
Employment Agreement, incorporated herein by reference, relating to the
prohibition of disclosure of proprietary information, and you shall be required
to return the Company's computer equipment, unless bought by you in mutual
agreement at the Termination Date, and telecommunications equipment upon the
Termination Date.
4. Mutual Release
(a) It is understood and agreed by the parties to this Agreement
that, in consideration of the mutual promises and covenants contained in this
Agreement, and subject to the performance each party to this agreement (except
for immaterial inadvertent non-performance which is promptly cured by you or the
Company, whichever is applicable) of its respective heirs, executors,
administrators, representatives, agents, successors and assigns hereby
irrevocably and unconditionally release and forever discharge the other party
from any and all causes of action, claims, actions, rights, judgments,
obligations, damages, demands, accountings or liabilities of whatever kind or
character, which each party may have against the other party from the beginning
of the world and through and including the Termination Date
(b) Nothing contained in this Section 4 shall serve as a release by
you or any Releasor with respect to any causes of action, claims, actions,
rights, judgments, obligations, damages, demands, defenses, accountings or
liabilities (i) that may arise under this Agreement, (ii) to which you would
otherwise be entitled under the Plan (unless expressly modified by this
Agreement other than Section 4(a) above) or (iii) that you or any other Releasor
would otherwise be entitled to assert by counter-claim, cross-claim, impleader
or otherwise in connection with any cause of action, claim, action, right,
judgment, obligation, damages, demand, accounting or liability that may be
asserted against you or any other Releasor.
5. RELATIONSHIP TO OTHER AGREEMENTS
On the Termination Date, this Agreement shall constitute the entire
agreement of the parties with regard to the subject matter hereof, contain all
the covenants, promises, representations, warranties and agreements between the
parties with respect to your resignation from the Company and supersede all
prior employment or severance agreements, including any addendum, amendment or
agreement thereto, between you and the Company or any of its predecessors or
affiliates, notwithstanding any survival clauses therein contained. Except as
otherwise provided herein, each party to this Agreement acknowledges that no
representation, inducement, promise or agreement, oral or written, has been made
by either party, or by anyone acting on behalf of either party, which is not
embodied herein, and that no agreement, statement, or promise relating to your
resignation from the Company, that is not contained in this Agreement, shall be
valid or binding. Any modification of this Agreement will be effective only if
it is in writing and signed by the party to be charged.
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6. NO WAIVER
No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall (a) be deemed to be a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time or (b) preclude insistence upon strict compliance in the future.
7. SEVERABILITY
If a court of competent jurisdiction determines that any provision of
this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect and such invalid or
unenforceable provision shall be reformulated by such court to preserve the
intent of the parties hereto.
8. COUNTERPARTS
This Agreement may be executed in three counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same Agreement.
9. HEADINGS
The paragraph headings have been inserted for purposes of convenience
and shall not be used for interpretive purposes.
10. ASSIGNMENT
This Agreement is binding on you and the Company and each of you and
the Company's successors and assigns. None of your rights or obligations
hereunder may be assigned by you to any other person or entity, except by will
or the laws of descent and distribution. In the event of your death prior to
receipt by you thereof, the Severance Payment and the Bonus shall be payable to
your designated beneficiaries on the same schedule as provided for in this
Agreement. The rights and obligations of the Company under this Agreement may
only be assigned to a successor to all or substantially all of the assets of the
Company.
11. GOVERNING LAW
This Agreement shall be governed by the laws of England and Wales
applicable to contracts made and performed therein, without regard to its
conflicts of law principles.
12. ACKNOWLEDGMENTS
You acknowledge that:
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(a) You have read and understand the terms of this Agreement and
have voluntarily agreed to these terms without coercion or undue persuasion by
the Company or any officer, director or other agent thereof;
(b) This Agreement does not purport to waive, and does not waive,
any rights you may have which arise after the Termination Date.
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* * *
Please indicate your acceptance of these terms by signing and dating
below.
Sincerely,
FLAG Telecom Group Limited
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By:
Name:
Title:
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Xxxxx Xxxx
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Date
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