AMENDED & RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED & RESTATED EMPLOYMENT AGREEMENT, dated as of 5 July
2006 (this "Agreement"), by and between NTL Incorporated, a Delaware
corporation (the "Company"), and Xxxxx Xxxxxx (the "Executive").
WHEREAS, on 3 March 2006, NTL Incorporated and Telewest Global,
Inc. effected a merger transaction (the "Merger"), structured as a reverse
acquisition, whereby Telewest Global, Inc. acquired NTL Incorporated and
both companies changed their names so that Telewest Global, Inc. became
"NTL Incorporated" and former NTL Incorporated became "NTL Holdings Inc."
("Old NTL");
WHEREAS, as a result of the Merger, Old NTL became a wholly owned
subsidiary of the Company and shares of Old NTL were converted into shares
of the Company, so that one share of common stock of Old NTL became two and
a half shares of the common stock of the Company after giving effect to the
Merger;
WHEREAS, the Executive has been employed as the Chairman of the
Board of Old NTL since 7 March 2003 and as Chairman of the Board of the
Company since the closing of the Merger on 3 March 2006, pursuant to the
terms of an Employment Agreement dated as of 17 September 2003 (the
"Original Agreement"); and
WHEREAS, the Company and the Executive each desire to amend and
restate the Original Agreement in its entirety to extend the Employment
Term, to provide for the assignment of this Agreement by Old NTL to the
Company, to provide for certain additional restricted stock grants to the
Executive and to provide for his continued employment with the Company,
which is now the parent entity of the group;
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Amendment; Employment Term. The Original Agreement is hereby
amended and restated in its entirety by this Agreement. The parties have
agreed to assign the terms of the Original Agreement, as amended and
restated hereby, to the Company from Old NTL and accordingly the term
"Company" now refers to NTL Incorporated, the ultimate parent entity. In
connection with such assignment, the parties acknowledge and agree that (i)
all rights of Old NTL under the Original Agreement are now rights of the
Company under this Agreement and shall be enforceable against the Executive
solely by the Company, (ii) all rights of the Executive under the Original
Agreement shall be enforceable by the Executive solely against the Company,
(iii) all obligations of Old NTL under the Original Agreement are now
obligations of the Company under this Agreement and shall be enforceable by
the Executive solely against the Company and (iv) all obligations of the
Executive under the Original Agreement shall be enforceable against the
Executive solely by the Company. The Executive hereby releases and waives
Old NTL from any and all such claims he may have against it as of the date
hereof and acknowledges that, from and after the date hereof, such claims
shall be asserted solely against the Company.
Except for earlier termination as provided for in Section 7, the
Company agrees to employ the Executive, and the Executive agrees to be
employed by the Company, subject to the terms and provisions of this
Agreement, for the period commencing on 7 March 2003 and ending on 30 April
2009 (the "Employment Term").
2. Duties. During the Employment Term, the Executive shall serve
as the Chairman of the Board. The Executive shall perform such duties,
services and responsibilities on behalf of the Company and its subsidiaries
as may be determined from time to time by the Board. In performing such
duties hereunder, the Executive will report directly to the Board. The
Executive shall devote substantial business time, attention and skill to
the performance of such duties, services and responsibilities, and will use
his best efforts to promote the interests of the Company.
3. Cash Compensation. In full consideration of the performance by
the Executive of the Executive's obligations during the Employment Term,
the Executive shall be compensated as follows:
(a) Base Salary. The Executive shall be eligible to receive
a base salary during the Employment Term at an annual rate of $1,250,000
per year (the "Base Salary"). The Base Salary is payable in accordance with
the normal payroll practices of the Company then in effect.
(b) Incentive Bonus. The Executive shall participate in the
Company's cash bonus plans, with an on-target bonus percentage of 100% of
base salary, provided that for bonus purposes his base salary shall be
deemed to be $400,000.
4. Equity-Based Compensation. Prior to the completion of the
Merger, the Executive was granted options to purchase common stock of Old
NTL and restricted Old NTL common stock, and the shares of common stock
subject to such grants (to the extent outstanding immediately prior to the
completion of the Merger) were converted in the Merger into shares of the
Company (the "Prior Equity Grants"). In addition to the Prior Equity
Grants, effective as of the earliest practicable date following the day on
which the Company's 2006 Stock Incentive Plan is approved by the Company's
shareholders, the Executive has been granted an additional 1,125,000 shares
of common stock of the Company, on the terms and conditions as described on
Exhibit A-1 and as set forth in the form of Restricted Stock Agreement
attached in Exhibit A-2 (the "Restricted Stock Agreement").
5. Benefits. During the Employment Term, the Executive shall be
entitled to: (i) participate in health insurance and life insurance plans,
policies, programs and arrangements in accordance with the Company's policy
then in effect, to the extent the Executive meets the eligibility
requirements for any such plan, policy, program or arrangement and (ii)
reimbursement for travel expenses in accordance with the Company's policy
then in effect.
6. Taxes. The Executive shall be solely responsible for taxes
imposed on the Executive by reason of any compensation and benefits
provided under this Agreement and all such compensation and benefits shall
be subject to applicable withholding taxes.
7. Termination. The Executive's employment with the Company and
the Employment Term shall terminate upon the expiration of the Employment
Term or upon the earlier occurrence of any of the following events (the
date of termination, the "Termination Date"):
(a) The death of the Executive ("Death").
(b) The mutual agreement between the Company and the
Executive that the employment of the Executive with the Company shall be
terminated.
(c) The termination of employment by the Company for Cause
upon written notice (the "Cause Notice") to the Executive specifying the
conduct constituting Cause. Termination of employment for "Cause" means:
(i) the Executive is convicted of any criminal offense including fraud or
breach of trust, (ii) the willful or continued failure of the Executive to
perform the Executive's duties hereunder (other than as a result of
physical or mental illness) or (iii) in carrying out the Executive's duties
hereunder, the Executive has engaged in conduct that constitutes gross
neglect or willful misconduct, unless the Executive believed in good faith
that such conduct was in, or not opposed to, the best interests of the
Company and its parents, subsidiaries, associated and affiliated companies
and joint ventures (collectively, the "Company Affiliated Group"). For all
purposes of the Executive's employment by the Company, if the Executive's
employment is terminated for Cause, the effective date of such termination
shall be the date of delivery of the Cause Notice.
(d) The termination of employment by the Company if the
Executive is Disabled. "Disabled" shall mean that the Executive, as of any
date, has been unable, due to physical or mental incapacity, to
substantially perform the Executive's duties, services and responsibilities
hereunder either for a period of at least 180 consecutive days or for at
least 270 days in any consecutive 365-day period, whichever may be
applicable.
(e) The termination of employment by the Company other than
for Cause, being Disabled or Death. A termination other than for Cause
includes the failure of the Company, without the Executive's consent, to
nominate the Executive to the slate of directors proposed by the Company at
the Company's 2008 annual meeting of stockholders.
In the event of termination of the Executive's employment, for
whatever reason (other than Death), the Executive agrees to cooperate with
the Company, its subsidiaries and affiliates and to be reasonably available
to the Company, its subsidiaries and affiliates with respect to continuing
and/or future matters arising out of the Executive's employment hereunder
or any other relationship with the Company, its subsidiaries or affiliates,
whether such matters are business-related, legal or otherwise.
Upon termination of the Executive's employment for any reason,
the Executive shall be deemed to have resigned from the Board and from all
other boards of, and other positions with, any member of the Company
Affiliated Group, as applicable, and shall execute all such documentation
required to evidence any such resignations.
8. Termination Payments.
(a) If the Executive's employment with the Company
terminates pursuant to Subsection (a), (b), (c) or (d) of Section 7, the
Company shall pay the Executive: (i) any accrued and unpaid Base Salary as
of the Termination Date and (ii) an amount equal to such reasonable and
necessary business expenses incurred by the Executive in connection with
the Executive's employment on behalf of the Company on or prior to the
Termination Date but not previously paid to the Executive (the "Accrued
Compensation").
(b) If the Executive's employment with the Company
terminates pursuant to Subsection (e) of Section 7:
(i) the Company shall pay the Executive the Accrued
Compensation;
(ii) for a period of one year following the Termination
Date, but only for so long as the Executive is in compliance with Section
9, the Company shall continue to pay the Executive the Base Salary and
Bonus in accordance with the normal payroll practices of the Company; and
(iii) (x) the portion of the shares granted under
Sections 3(i) and 3(ii) of the Restricted Stock Agreement that are
scheduled to become vested within one year following the Termination Date
shall become vested on the Termination Date (without regard to whether the
performance conditions relating thereto are satisfied) and the remaining
portion of the shares granted under such Sections shall be forfeited, and
(y) one-third of the of the shares granted under Section 3(iii) of the
Restricted Stock Agreement shall become vested (without regard to whether
the performance conditions relating thereto are satisfied), and the
Compensation Committee or the Board of Directors will have the discretion
to vest all or any part of the remaining portion of the Restricted Stock
Agreement granted under such Section.
(c) If the Executive's employment with the Company
terminates pursuant to Subsection (a) of Section 7, any shares granted
under the Restricted Stock Agreement and not then forfeited pursuant to the
terms thereof shall become vested and exercisable on the Termination Date.
(d) Release; Full Satisfaction. Notwithstanding any other
provision of this Agreement, no severance pay shall become payable under
this Agreement unless and until the Executive executes a general release of
claims in form and manner reasonably satisfactory to the Company including
where relevant a release of any statutory claims, and such release has
become irrevocable; provided, that the Executive shall not be required to
release any indemnification rights. The payments to be provided to the
Executive pursuant to this Section 8 upon termination of the Executive's
employment shall constitute the exclusive payments in the nature of
severance or termination pay or salary continuation which shall be due to
the Executive upon a termination of employment and shall be in lieu of any
other such payments under any plan, program, policy or other arrangement
which has heretofore been or shall hereafter be established by any member
of the Company Affiliated Group.
(e) Effect of Section 409A of the Internal Revenue Code. If
the Executive is a "specified employee" for purposes of Section 409A of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder,
any severance payments to the Executive which are subject to Section 409A
shall not commence until six months from the Termination Date, and the
first payment after such period shall include all prior severance payments
that would have been paid during such six month period if Section 409A had
not been applicable thereto.
9. Executive Covenants.
(a) Unauthorized Disclosure. The Executive agrees and
understands that in the Executive's position with the Company, the
Executive will be exposed to and will receive information relating to the
confidential affairs of the Company Affiliated Group, including but not
limited to technical information, intellectual property, business and
marketing plans, strategies, customer information, other information
concerning the products, promotions, development, financing, expansion
plans, business policies and practices of the Company Affiliated Group, and
other forms of information considered by the Company to be confidential and
in the nature of trade secrets ("Confidential Information"). The Executive
agrees that during the Employment Term and thereafter, the Executive will
not disclose such Confidential Information, either directly or indirectly,
to any third person or entity without the prior written consent of the
Company. This confidentiality covenant has no temporal, geographical or
territorial restriction. Upon termination of the Employment Term, the
Executive will promptly supply to the Company all property, keys, notes,
memoranda, writings, lists, files, reports, customer lists, correspondence,
tapes, disks, cards, surveys, maps, logs, machines, technical data or any
other tangible product or document which has been produced by, received by
or otherwise submitted to the Executive during or prior to the Employment
Term. Any material breach of the terms of this paragraph shall be
considered Cause.
(b) Non-competition. By and in consideration of the
Company's entering into this Agreement and the payments to be made and
benefits to be provided by the Company hereunder, and further in
consideration of the Executive's exposure to the proprietary information of
the Company Affiliated Group, the Executive agrees that the Executive will
not, during the Employment Term, and thereafter during the "Non-competition
Term" (as defined below), directly or indirectly, own, manage, operate,
join, control, be employed by, or participate in the ownership, management,
operation or control of, or be connected in any manner with, including but
not limited to holding any position as a shareholder, director, officer,
consultant, independent contractor, employee, partner, or investor in, any
"Restricted Enterprise" (as defined below); provided that in no event shall
ownership of less than 1% of the outstanding equity securities of any
issuer whose securities are registered under the Securities and Exchange
Act of 1934, as amended, standing alone, be prohibited by this Subsection
(b) of this Section 9. For purposes of this paragraph, the term "Restricted
Enterprise" shall mean any person, corporation, partnership or other entity
that competes directly or indirectly with any member of the Company
Affiliated Group by (i) owning or operating broadband or mobile
communications networks for telephone, television or internet services,
(ii) providing mobile telephone, fixed line telephone, television or
internet services or (iii) owning, operating or providing any
content-generation services or television channels, in each case
principally in the United Kingdom or Ireland. Following termination of the
Employment Term, upon request of the Company, the Executive shall notify
the Company of the Executive's then current employment status. For purposes
of this Agreement, the "Non-competition Term" shall mean the period
beginning on the Termination Date and ending on the first anniversary of
such date. Any material breach of the terms of this paragraph shall be
considered Cause.
(c) Non-solicitation. During the Non-competition Term, the
Executive shall not, and shall not cause any other person to, interfere
with or harm, or attempt to interfere with or harm, the relationship of any
member of the Company Affiliated Group, or endeavor to entice away from any
member of the Company Affiliated Group, or hire, any person who at any time
during the Employment Term was an employee or customer of any member of the
Company Affiliated Group, or otherwise had a material business relationship
with any member of the Company Affiliated Group.
(d) Proprietary Rights. The Executive assigns all of the
Executive's interest in any and all inventions, discoveries, improvements
and patentable or copyrightable works initiated, conceived or made by the
Executive, either alone or in conjunction with others, during the
Employment Term and related to the business or activities of any member of
the Company Affiliated Group to the Company or its nominee. Whenever
requested to do so by the Company, the Executive shall execute any and all
applications, assignments or other instruments that the Company shall in
good xxxxx xxxx necessary to apply for and obtain trademarks, patents or
copyrights of the United States or any foreign country or otherwise protect
the interest of any member of the Company Affiliated Group therein. These
obligations shall continue beyond the conclusion of the Employment Term
with respect to inventions, discoveries, improvements or copyrightable
works initiated, conceived or made by the Executive during the Employment
Term.
(e) Remedies. The Executive agrees that any breach of the
terms of this Section 9 would result in irreparable injury and damage to
the Company, its subsidiaries and/or its affiliates for which the Company,
its subsidiaries and/or its affiliates would have no adequate remedy at
law; the Executive therefore also agrees that in the event of said breach
or any threat of breach, the Company, its subsidiaries and/or its
affiliates, as applicable, shall be entitled to an immediate injunction and
restraining order to prevent such breach and/or threatened breach and/or
continued breach by the Executive and/or any and all persons and/or
entities acting for and/or with the Executive, without having to prove
damages, in addition to any other remedies to which the Company, its
subsidiaries and/or its affiliates may be entitled at law or in equity. The
terms of this paragraph shall not prevent the Company, its subsidiaries
and/or its affiliates from pursuing any other available remedies for any
breach or threatened breach hereof, including but not limited to the
recovery of damages from the Executive. The Executive and the Company
further agree that the provisions of the covenants contained in this
Section 9 are reasonable and necessary to protect the businesses of the
Company Affiliated Group because of the Executive's access to Confidential
Information and his material participation in the operation of such
businesses. Should a court, arbitrator or other similar authority
determine, however, that any provision of the covenants contained in this
Section 9 are not reasonable or valid, either in period of time,
geographical area, or otherwise, the parties hereto agree that such
covenants should be interpreted and enforced to the maximum extent to which
such court or arbitrator deems reasonable or valid.
The existence of any claim or cause of action by the Executive
against the Company and/or its subsidiaries and/or its affiliates, whether
predicated on this Agreement or otherwise, shall not constitute a defense
to the enforcement by the Company of the covenants contained in this
Section 9.
10. Executive's Representation. The Executive represents to the
Company that the Executive's execution and performance of this Agreement
does not violate any agreement or obligation (whether or not written) that
the Executive has with or to any person or entity including, but not
limited to, any prior employer.
11. Indemnification.
(a) To the extent permitted by applicable law, the Company
shall indemnify the Executive against, and save and hold the Executive
harmless from, any damages, liabilities, losses, judgments, penalties
fines, amounts paid or to be paid in settlement, costs and reasonable
expenses (including, but not limited to, attorneys' fees and expenses),
resulting from, arising out of or in connection with any threatened,
pending or completed claim, action, proceeding or investigation (whether
civil or criminal) against or affecting the Executive by reason of the
Executive's service from and after the Effective Date as an officer,
director or employee of, or consultant to, any member of the Company
Affiliated Group, or in any capacity at the request of any member of the
Company Affiliated Group, or an officer, director or employee thereof, in
or with regard to any other entity, employee benefit plan or enterprise
(other than arising out of the Executive's acts of misappropriation of
funds or actual fraud). In the event the Company does not compromise or
assume the defense of any indemnifiable claim or action against the
Executive, the Company shall promptly pay to the Executive to the extent
permitted by applicable law all costs and expenses incurred or to be
incurred by the Executive in defending or responding to any claim or
investigation in advance of the final disposition thereof; provided,
however, that if it is ultimately determined by a final judgment of a court
of competent jurisdiction (from whose decision no appeals may be taken, or
the time for appeal having lapsed) that the Executive was not entitled to
indemnity hereunder, then the Executive shall repay forthwith all amounts
so advanced. The Company may not agree to any settlement or compromise of
any claim against the Executive, other than a settlement or compromise
solely for monetary damages for which the Company shall be solely
responsible, without the prior written consent of the Executive, which
consent shall not be unreasonably withheld. This right to indemnification
shall be in addition to, and not in lieu of, any other right to
indemnification to which the Executive shall be entitled pursuant to the
Company's Certificate of Incorporation or By-laws or otherwise.
(b) Directors' and Officers' Insurance. The Company shall
use its best efforts to maintain commercially reasonable directors' and
officers' liability insurance during the Employment Term.
12. Non-Waiver of Rights. The failure to enforce at any time the
provisions of this Agreement or to require at any time performance by any
other party of any of the provisions hereof shall in no way be construed to
be a waiver of such provisions or to affect either the validity of this
Agreement or any part hereof, or the right of any party to enforce each and
every provision in accordance with its terms.
13. Notices. Every notice relating to this Agreement shall be in
writing and shall be given by personal delivery, by a reputable same-day or
overnight courier service (charges prepaid), by registered or certified
mail, postage prepaid, return receipt requested or by facsimile to the
recipient with a confirmation copy to follow the next day to be delivered
by personal delivery or by a reputable same-day or overnight courier
service to:
If to the Company: NTL Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Secretary
Fax: (000) 000-0000
with a copy to: NTL Incorporated
Xxxxxxx Xxxx Xxxxxxxx Xxxx
Xxxx, Xxxxxxxxx XX00 0XX
Attn: HR Director
If to the Executive, to the address most recently provided
by the Executive to the Company and contained in the
Company's records
14. Binding Effect/Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
heirs, executors, personal representatives, estates, successors (including,
without limitation, by way of merger) and assigns. Notwithstanding the
provisions of the immediately preceding sentence, the Executive shall not
assign all or any portion of this Agreement without the prior written
consent of the Company.
15. Entire Agreement. This Agreement (as amended and restated
hereby), the Restricted Stock Agreement and the agreements evidencing the
Prior Equity Grants set forth the entire understanding of the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements, written or oral, between them as to such subject matter,
including the agreement between the Executive and the Company dated 25
February 2003, which shall be null and void.
16. Severability. If any provision of this Agreement, or any
application thereof to any circumstances, is invalid, in whole or in part,
such provision or application shall to that extent be severable and shall
not affect other provisions or applications of this Agreement.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York,
without reference to any principles of conflict of laws which might result
in the application of the laws of any other jurisdiction.
18. Modifications and Waivers. No provision of this Agreement may
be modified, altered or amended except by an instrument in writing executed
by the parties hereto. No waiver by any party hereto of any breach by any
other party hereto of any provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar
provisions at the time or at any prior or subsequent time.
19. Headings. The headings contained herein are solely for the
purposes of reference, are not part of this Agreement and shall not in any
way affect the meaning or interpretation of this Agreement.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by authority of the Executive Committee of the Board of Directors,
and the Executive has hereunto set his hand, on the day and year first
above written.
Company:
-------
NTL Incorporated
By: /s/Xxxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxx
Secretary
Executive:
---------
/s/Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
[Signature Page to Amended & Restated Employment Agreement]
EXHIBIT A-1
Terms of Additional Restricted Stock Grant
Date of Grant: Effective as of the earliest practicable date following the
day on which the Company's 2006 Stock Incentive Plan is approved by the
Company's stockholders and a Form S-8 with respect thereto is effective.
Shares of Restricted Stock: 1,125,000 (this number takes into account the
conversion of shares in the merger).
Vesting Schedule: Each tranche of restricted stock vests as follows:
Tranche 1 (375,000 shares) - in equal one-third installments on April
30, 2007, 2008 and 2009, subject to achievement of, respectively, 2006,
2007 and 2008 annual performance milestones to be provided by the Executive
Committee of the Board;
Tranche 2 (375,000 shares) - in equal one-third installments on April
30, 2007, 2008 and 2009, subject to achievement of a list of objectives for
each of 2006, 2007 and 2008, respectively, to be provided by the Executive
Committee of the Board; and
Tranche 3 (375,000 shares) - on April 30, 2009, subject to achievement
of the Company's LTIP over the period 2006-2008.
Shares will be granted under the 2006 Stock Incentive Plan (the "Plan").
Upon the occurrence of an "Acceleration Event" (as defined in the Plan),
shares granted under Tranche 1 and Tranche 2 will vest automatically on an
accelerated basis. Vesting of Tranche 3 will occur upon the occurrence of
an Acceleration Event as follows: (i) if the Acceleration Event occurs
during the 2006 fiscal year, 125,000 shares will automatically vest, and
the Compensation Committee or the Board of Directors will have the
discretion to vest all or any part of an additional 250,000 shares; (ii) if
the Acceleration Event occurs during the 2007 fiscal year, 250,000 shares
will automatically vest, and the Compensation Committee or the Board of
Directors will have the discretion to vest all or any part of an additional
125,000 shares; and (iii) if the Acceleration Event occurs during the 2008
fiscal year (or the 2009 fiscal year if the shares are then outstanding),
375,000 shares will automatically vest.
The award will be evidenced by the Restricted Stock Agreement in the form
attached as Exhibit A-2.
During the Employment Term, the Executive shall not sell or transfer any
shares of Restricted Stock, except as may be necessary to pay income taxes
which are incurred as a result of vesting of such Restricted Stock as
further provided in the Restricted Stock Agreement (but in no event more
than 45% of such vested shares).
EXHIBIT A-2
NTL INCORPORATED
RESTRICTED STOCK AGREEMENT
RESTRICTED STOCK AGREEMENT, dated as of 5 July 2006, between NTL
Incorporated, a Delaware corporation (the "Company"), and Xxxxx Xxxxxx (the
"Executive").
WHEREAS, the Executive is employed by the Company under the Amended &
Restated Employment Agreement dated as of the date hereof (the "Employment
Agreement") and which has a term thereunder which expires on 30 April 2009
(such term, as may be extended by amendment of the Employment Agreement,
the "Term");
WHEREAS, the Executive Committee of the Board of Directors of the
Company (the "Executive Committee") has reviewed and approved the terms of
this Agreement and the Employment Agreement;
WHEREAS, the Company wishes to grant to the Executive, and the
Executive wishes to accept from the Company, shares of common stock of the
Company, par value $0.01 per share (the "Restricted Stock"), to be granted
pursuant to the NTL Incorporated 2006 Stock Incentive Plan (the "Plan");
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Restricted Stock. The Company hereby grants to the
Executive, and the Executive hereby accepts from the Company, 1,125,000
shares of Restricted Stock on the terms and conditions set forth in this
Agreement. This Agreement is also subject to the terms and conditions set
forth in the Plan. Capitalized terms used but not defined herein shall have
the meanings set forth in the Plan.
2. Rights of Executive. Except as otherwise provided in this
Agreement, the Executive shall be entitled, at all times on and after the
date that the shares of Restricted Stock are issued, to exercise all the
rights of a stockholder with respect to the shares of Restricted Stock
(whether or not the Transfer Restrictions thereon shall have lapsed),
including the right to vote the shares of Restricted Stock and the right,
subject to Section 6 hereof, to receive dividends thereon. Notwithstanding
the foregoing, prior to the "Release Date" (as defined in Section 4.1), the
Executive shall not be entitled to transfer, sell, pledge, hypothecate,
assign or otherwise dispose of or encumber, the shares of Restricted Stock
(collectively, the "Transfer Restrictions"), except that, as provided in
Section 4.1, the Executive may sell such number of shares as is reasonably
necessary to pay for any US federal or state income tax that may apply as a
result of vesting upon the occurrence of the relevant Lapse Date but in no
event more than 45% of such shares.
3. Vesting and Lapse of Transfer Restrictions. The Transfer
Restrictions on the Restricted Stock shall lapse and the Restricted Stock
granted hereunder shall vest (in each case on April 30 of fiscal year
following the relevant fiscal year(s) specified below) as follows:
(i) Annual Budget. As to the number of shares set forth below if
performance conditions relating to group cash flow and EBITDA
established by the Executive Committee in respect of the Company's
fiscal year shown below have been met, so long as the Executive
has remained continuously employed by the Company from the date of
commencement of his employment through December 31 of the relevant
fiscal year shown below:
No of Shares Relevant Fiscal Year Lapse Date
------------ -------------------- ----------
125,000 2006 April 30, 2007
125,000 2007 April 30, 2008
125,000 2008 April 30, 2009
Upon the occurrence of an Acceleration Event, the Transfer
Restrictions on all of these shares of Restricted Stock
which are then outstanding shall lapse and such shares of
Restricted Stock shall vest.
(ii) Comprehensive List of Objectives. As to the number of shares set
forth below if performance conditions relating to a comprehensive
list of objectives established by the Executive Committee in
respect of the Company's fiscal year below have been met, so long
as the Executive has remained continuously employed by the Company
from the date of commencement of his employment through December
31 of the relevant fiscal year shown below:
No of Shares Relevant Fiscal Year Lapse Date
------------ -------------------- ----------
125,000 2006 April 30, 2007
125,000 2007 April 30, 2008
125,000 2008 April 30, 2009
Upon the occurrence of an Acceleration Event, the Transfer
Restrictions on all of these shares of Restricted Stock
which are then outstanding shall lapse and such shares of
Restricted Stock shall vest.
(iii) LTIP. As to 375,000 shares if the long term performance conditions
established by the Executive Committee in respect of the Company's
2006-2008 fiscal years have been met, so long as the Executive has
remained continuously employed by the Company from the date of
commencement of his employment through December 31, 2008. In the
event of the occurrence of an Acceleration Event, these shares of
Restricted Stock shall vest as follows: (i) if the Acceleration
Event occurs during the 2006 fiscal year, 125,000 shares will
automatically vest, and the Committee or the Board will have the
discretion to vest all or any part of an additional 250,000
shares; (ii) if the Acceleration Event occurs during the 2007
fiscal year, 250,000 shares will automatically vest, and the
Committee or the Board will have the discretion to vest all or any
part of an additional 125,000 shares; and (iii) if the
Acceleration Event occurs during the 2008 fiscal year (or the 2009
fiscal year, if prior to the date of the determination referred to
in the immediately following paragraph), 375,000 shares will
automatically vest.
The Committee shall meet to determine whether such performance conditions
have been met promptly after the completion by the Company of the financial
reports or other information in respect of an applicable fiscal year
necessary to make such determination. The restrictions on the shares of
Restricted Stock subject to this Section 3.1 shall lapse on the date that
the Committee determines that the applicable performance conditions have
been met in respect of an applicable fiscal year (such date, the "Lapse
Date"), and the shares of Restricted Stock shall be forfeited if the
Committee determines that such performance conditions have not been met. In
no event shall the date of such determination occur later than the last day
of the fiscal year immediately following the fiscal year to which the
performance conditions relate.
4. Escrow and Delivery of Shares.
4.1 Certificates representing the shares of Restricted Stock
shall be issued and held by the Company in escrow and shall remain in the
custody of the Company until the earliest of (i) the final Lapse Date
(Xxxxx 00, 0000), (xx) the date of the Executive's termination of
employment with the Company and its Affiliates (other than by resignation)
and (iii) the date of vesting of the shares upon an Acceleration Event as
provided herein (the earliest of (i), (ii) and (iii), the "Release Date");
provided, that in connection with any Lapse Date, the Company shall deliver
to the Executive a sufficient number of shares that have become vested on
such Lapse Date with a value equal to the Withholding Tax requirements, if
any (but in no event more than 45% of such vested shares) (the "Withholding
Shares"). As soon as practicable after the Release Date, the shares of
Restricted Stock that have become vested pursuant to Section 3 hereof that
have not previously been delivered to the Executive shall be delivered to
the Executive or the Executive's estate, subject to the delivery of any
documents which the Company in its discretion may require as a condition to
the issuance of shares, and so long as the Executive has satisfied all
applicable Withholding Tax requirements with respect to the Restricted
Stock.
4.2 The Executive shall receive, hold, sell, or otherwise dispose
of those shares delivered to the Executive pursuant to Section 4.1 free and
clear of the Transfer Restrictions, but subject to compliance with all
federal and state securities laws.
4.3 Prior to the Release Date (or such earlier date that is
applicable to the Withholding Shares), each stock certificate shall bear a
legend in substantially the following form:
"This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture,
restrictions against transfer and rights of repurchase, if
applicable) contained in the Restricted Stock Agreement (the
"Agreement") between the registered owner of the shares
represented hereby and the Company. Release from such terms and
conditions shall be made only in accordance with the provisions
of the Agreement, a copy of which is on file in the office of the
Secretary of NTL Incorporated."
5. Effect of Termination of Employment for any Reason. Upon
termination of the Executive's employment with the Company and its
Affiliates, if applicable, for any reason, the Executive shall forfeit the
shares of Restricted Stock which are then subject to the Transfer
Restrictions, and, from and after such forfeiture, such shares of
Restricted Stock shall cease to be outstanding and the Executive shall have
no rights with respect thereto; provided, that, if the Executive's
employment shall terminate after the end of a fiscal year of the Company
and prior to the date of the determination as to whether the performance
conditions applicable to such fiscal year have been met, the shares of
Restricted Stock subject to vesting in respect of such fiscal year shall
remain outstanding following the termination of the Executive's employment
and shall vest or be forfeited when such determination is made, in either
case based on such determination; and provided, further, that the shares of
Restricted Stock shall be subject to vesting to the extent provided in the
Employment Agreement.
6. Voting and Dividend Rights. All dividends declared and paid by the
Company on shares of Restricted Stock shall be deferred until the lapsing
of the Transfer Restrictions pursuant to Section 3 hereof (and shall be
subject to forfeiture upon forfeiture of the shares of Restricted Stock as
to which such deferred dividends relate). The deferred dividends shall be
held by the Company for the account of the Executive. Upon the Lapse Date,
the dividends allocable to the shares of Restricted Stock as to which the
Transfer Restrictions have lapsed shall be paid to the Executive (without
interest). The Company may require that the Executive invest any cash
dividends received in additional Restricted Stock which shall be subject to
the same conditions and restrictions as the Restricted Stock granted under
this Agreement.
7. No Right to Continued Employment. Nothing in this Agreement shall
be interpreted or construed to confer upon the Executive any right with
respect to continuance of employment by the Company or any of its
Affiliates, nor shall this Agreement interfere in any way with the right of
the Company or any such Affiliate to terminate the Executive's employment
at any time.
8. Withholding of Taxes. The Executive shall pay to the Company, or
the Company and the Executive shall agree on such other arrangements
necessary for the Executive to pay, the applicable federal, state and local
income taxes required by law to be withheld (the "Withholding Taxes"), if
any, upon the vesting and delivery of the shares. The Company shall have
the right to deduct from any payment of cash to the Executive an amount
equal to the Withholding Taxes in satisfaction of the Executive's
obligation to pay Withholding Taxes.
9. Modification of Agreement. This Agreement may be modified, amended,
suspended or terminated, and any terms or conditions may be waived, but
only by a written instrument executed by the parties hereto.
10. Severability. Should any provision of this Agreement be held by a
court of competent jurisdiction to be unenforceable or invalid for any
reason, the remaining provisions of this Agreement shall not be affected by
such holding and shall continue in full force and effect in accordance with
their terms.
11. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
New York without giving effect to the conflicts of laws principles thereof.
12. Successors in Interest; Transfer. This Agreement shall inure to
the benefit of and be binding upon any successor to the Company. This
Agreement shall inure to the benefit of the Executive's heirs, executors,
administrators and successors. All obligations imposed upon the Executive
and all rights granted to the Company under this Agreement shall be binding
upon the Executive's heirs, executors, administrators and successors. This
Agreement is not assignable by the Executive.
[The remainder of this page is intentionally blank.]
NTL INCORPORATED
/s/Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
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Title: Secretary
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/s/Xxxxx X. Xxxxxx
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Executive
