EXHIBIT 10.20
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 4th day of
March, 2003, by and between NTL Incorporated, a Delaware corporation (the
"Company"), and Xxxxx Xxxxxxxx (the "Executive").
WHEREAS, the Company wishes to employ the Executive effective
as of March 3, 2003 (the "Effective Date"); and
WHEREAS, the Executive wishes to accept such employment and to
render services to the Company on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Effectiveness. This Agreement shall become effective as of the
Effective Date.
2. Employment Term.
(a) The term of the Executive's employment pursuant to
this Agreement (the "Employment Term") shall commence as of the Effective Date
and shall end on December 31, 2004, unless the Employment Term terminates
earlier pursuant to Section 7 of this Agreement. The Employment Term may be
extended by mutual agreement of the Company and the Executive; provided, that
the Company shall give the Executive at least 60 days' notice prior to December
31, 2004 if it does not intend to seek an extension of the Employment Term.
(b) Title; Duties. The Executive shall join the Company's
Finance Group and perform such duties, services and responsibilities as are
reasonably requested from time to time by the Board of Directors of the Company
(the "Board") and normal and customary for such position until such time as he
is appointed Chief Financial Officer; at which time he shall perform such
duties, services and responsibilities as are reasonably requested from time to
time by the Board and normal and customary for the CFO position; provided
however that it is expressly understood and agreed that Executive will not in
any way hold himself out as, or perform any functions consistent with the
position of, Chief Financial Officer until such time as he is so appointed by
the Board. During the Employment Term, the Executive shall be based in
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either the United States or the United Kingdom, as agreed by the Executive and
the Chief Executive Officer. The Executive agrees that he may be seconded to the
United Kingdom for some portion or the entire duration of this Agreement.
During the Employment Term, the Executive shall devote
substantially all of his time to the performance of the Executive's duties
hereunder. During the Employment Term, the Executive will not, without the prior
written approval of the Board, engage in any other business activity which
interferes in any material respect with the performance of the Executive's
duties hereunder or which is in violation of written policies established from
time to time by the Company. Nothing contained in this Agreement shall preclude
the Executive from devoting a reasonable amount of time and attention during the
Employment Term to (i) serving, with the prior approval of the Board, as a
director, trustee or member of a committee of any for-profit organization; (ii)
engaging in charitable and community activities; and (iii) managing personal and
family investments and affairs, so long as any activities of the Executive which
are within the scope of clauses (i), (ii) and (iii) of this Section 2(b) do not
interfere in any material respect with the performance of the Executive's duties
hereunder, and (iv) performance of consulting duties for Wiltel Communications
Group, Inc. of up to ten days per year through October 15, 2006.
3. Monetary Remuneration.
(a) Base Salary. During the Employment Term, in
consideration of the performance by the Executive of the Executive's obligations
hereunder to the Company and its parents, subsidiaries, affiliates and joint
ventures (collectively, the "Company Affiliated Group") in any capacity
(including any services as an officer, director, employee, member of any Board
committee or management committee or otherwise), the Company shall pay to the
Executive an annual salary of (pound)340,000 (the "Base Salary"). The Base
Salary shall be payable in accordance with the normal payroll practices of the
Company in effect from time to time for senior management generally; provided
that the Executive may designate at one time each year a percentage of cash
compensation, not yet paid, to be paid in U.S. Dollars, with the exchange rate
set on the date that such designation is made by reference to the noon buying
rate as quoted by the Federal Reserve Bank of New York. If the Executive
provides services to members of the Company Affiliated Group other than the
Company, no additional compensation shall be paid by
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any such member to the Executive, and any compensation for such services (if
any) shall be paid to the Company.
(b) Annual Cash Bonus.
During each fiscal year of the Company that the Employment
Term is in effect, the Executive shall be eligible to earn a cash bonus in the
sole discretion of the Board of up to 100% of the Executive's Base Salary
(prorated for any partial fiscal year, except as otherwise provided herein) (the
"Annual Cash Bonus"). For fiscal year 2003, Executive's Annual Cash Bonus will
not be pro-rated and will be equal to or greater than 50% of Executive's Base
Salary.
(c) Ex-Xxx Package. During the Employment Term and for
any period during which the Executive is required by the Company to be in the
United Kingdom, Executive and his family shall have the right to receive the
benefits of the Company's standard ex-patriot benefits package (as applied to
comparable New York based employees of the Company) for the duration of any time
Executive lives in England, but in any event, such benefits will be consistent
with the terms set forth in Appendix A hereto. Tax equalization for the
Executive shall be consistent with NTL tax equalization policy, attached as
Appendix C hereto, and incorporated by reference.
4. Equity-Based Compensation.
(a) During the Employment Term, the Executive shall be
eligible to receive options to purchase common stock of the Company in addition
to the options described on Appendix B at such exercise prices, schedules as to
exercisability and other terms and conditions as determined in the sole
discretion of the Board.
5. Benefits.
(a) During the Employment Term, the Executive shall be
entitled to participate in all of the employee benefit plans, programs, policies
and arrangements (including fringe benefit and executive perquisite programs and
policies) made available by the Company to, or for the benefit of, its senior
executive officers in accordance with the terms thereof as they may be in effect
from time to time.
(b) Reimbursement of Expenses. During the Employment
Term, the Company shall reimburse the Executive for all reasonable business
expenses incurred by the Executive in carrying out the Executive's duties,
services and responsibilities under this
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Agreement, so long as the Executive complies with the general procedures of the
Company for submission of expense reports, receipts or similar documentation of
such expenses applicable to senior management generally. Without limiting the
generality or effect of any other provision hereof the Executive shall have the
right to reimbursement, upon submission of customary substantiating
documentation, of reasonable attorney's fees in connection with the negotiation
and execution of this Employment Agreement.
6. Vacations. For each whole and partial calendar year during the
Employment Term, the Executive shall be entitled to 5 weeks of paid vacation
(prorated for any partial calendar year, except for calendar year 2003), to be
credited and taken in accordance with the Company's policy as in effect from
time to time for its similarly situated executives.
7. Termination; Severance.
(a) Termination of Employment. The Company may terminate
the employment of the Executive without Cause upon 30 days' notice to the
Executive. In addition, the employment of the Executive shall automatically
terminate as of the date on which the Executive dies or is Disabled. For
purposes of this Agreement, the Executive shall be "Disabled" as of any date if,
as of such date, the Executive 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. Upon termination of the Executive's employment because the Executive
dies or is Disabled, the Company shall provide the Executive (or the Executive's
estate, if applicable) with death or disability benefits (as applicable)
pursuant to the plans, programs, policies and arrangements of the Company as are
then in effect with respect to senior executive officers. In addition, upon any
termination of the Executive's employment during the Employment Term, the
Company shall pay the Executive any earned but unpaid portion of the Base Salary
and Annual Cash Bonus. Immediately following termination of the Executive's
employment for any reason, the Employment Term shall terminate.
(b) Termination Without Cause; Constructive Termination
Without Cause. Upon a Termination Without Cause or a Constructive Termination
Without Cause, the Company shall, as soon as practicable following the
Executive's execution and delivery to the Company of the general release of
claims set forth in Section 7(f), pay the Executive a lump-sum severance payment
of
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cash equal to the product of the Base Salary times 3.
(c) Termination upon Non-Renewal of the Employment Term.
If (i) the Employment Term shall end on December 31, 2004, (ii) the Executive's
employment shall terminate on or after January 1, 2005 and on or prior to
January 15, 2005 and such termination is not a termination by the Company for
Cause or by reason of the Executive having died or become Disabled and (iii) the
Executive is not, on the date of termination, a party to an employment agreement
with the Company that the parties agree therein is a successor to this
Agreement, then the Company shall, as soon as practicable following the
Executive's execution and delivery to the Company of the general release set
forth in Section 7(f), pay the Executive a lump-sum severance payment of cash
equal to the product of the Base Salary times 2. Notwithstanding the foregoing,
a non-renewal of the Employment Term during the period commencing on the date of
a Change in Control and ending on the first anniversary thereof shall be a
Constructive Termination Without Cause as provided in Section 7(b) hereof.
(d) Upon a termination of the Executive's employment by
the Company for Cause, the Executive shall be entitled to earned but unpaid Base
Salary and benefits through the date of termination, and the Executive shall not
be entitled to any other payments or benefits.
(e) Upon any termination of the Executive's employment
other than by the Company for Cause, the Executive and his family shall be
entitled to continued medical benefits under (and in accordance with the terms
of) the Company's benefit plans for 1 year from the date of termination.
For purposes of this Agreement:
(i) A "Constructive Termination Without Cause"
means a termination of the Executive's employment during the Employment Term by
the Executive following the occurrence of any of the following events without
the Executive's prior consent: (A) failure to continue the Executive as the
Company's Chief Financial Officer (excluding a promotion); (B) any material
diminution in the Executive's working conditions or authority, responsibilities
or authorities; (C) assignment to the Executive of duties that are inconsistent,
in a material respect, with the scope of duties and responsibilities associated
with his position as described; (D) any materially adverse change in the
reporting structure applicable to the Executive (but not including a change in
the person filling the position to which the Executive reports); (E) failure
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to grant the Executive, during the 2003 fiscal year, the options set forth on
Appendix B hereto; (F) failure of the Board to appoint the Executive to the
position of Chief Financial Officer within three months of the Effective Date;
(G) the failure of the Company to maintain commercially reasonable directors'
and officers' liability insurance; or (H) a Change in Control occurs and the
Executive is Terminated Without Cause during the period commencing on the date
of the Change in Control and ending on the first anniversary thereof. For
purposes of this Agreement, a "Change in Control" is defined in Appendix E
attached hereto, and incorporated by reference. The Executive shall give the
Company 10 days' notice of the Executive's intention to terminate the
Executive's employment and claim that a Constructive Termination Without Cause
(as defined in (A), (B), (C), (D), (E), (G) or (N) above) has occurred, and such
notice shall describe the facts and circumstances in support of such claim in
reasonable detail. The Company shall have 10 days thereafter to cure such facts
and circumstances if possible.
(ii) A "Termination Without Cause" means a
termination of the Executive's employment during the Employment Term by the
Company other than for Cause.
(iii) "Cause" means (x) the Executive is convicted
of, or pleads guilty or nolo contendere to, a felony or to any crime involving
fraud, embezzlement or breach of trust; (y) the willful and continued failure of
the Executive to perform the Executive's duties hereunder (other than as a
result of physical or mental illness); or (z) 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
each member of the Company Affiliated Group. The Company shall give the
Executive 10 days' notice of the Company's intention to terminate the
Executive's employment and claim that facts and circumstances constituting Cause
exist, and such notice shall describe the facts and circumstances in support of
such claim. The Executive shall have 10 days thereafter to cure such facts and
circumstances if possible. If the Board reasonably concludes that the Executive
has not cured such facts or circumstances within such time, Cause shall not be
deemed to have been established unless and until the Executive has received a
hearing before the Board (if promptly requested by the Executive) and a majority
of the Board within 10 days of the date of such hearing (if so requested)
reasonably confirms the existence of Cause and the termination of the Executive
therefor. If the
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Executive is a member of the Board, the Executive hereby recuses himself or
herself from the deliberations and vote of the Board at such subsequent meeting.
(f) 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 and substantially similar
to Appendix D, and such release has become irrevocable; provided, that the
Executive shall not be required to release any indemnification rights,
continuing rights to benefits under the Company's employee benefit plans, or
rights to future payments or benefits under this Agreement. The payments to be
provided to the Executive pursuant to this Section 7 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.
(g) Resignation as a Director. 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.
(h) Cooperation Following Termination. Following
termination of the Executive's employment for any reason, the Executive agrees
to reasonably cooperate with the Company upon the reasonable request of the
Board and to be reasonably available to the Company with respect to matters
arising out of the Executive's services to any member of the Company Affiliated
Group. The Company shall reimburse or, at the Executive's request, advance the
Executive for expenses reasonably incurred in connection with such matters.
8. 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.
9. Executive's Covenants.
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(a) Confidentiality. The Executive agrees and understands
that the Executive has been, and in the Executive's position with the Company
the Executive will be, exposed to and receive information relating to the
confidential affairs of the Company Affiliated Group, including, but not limited
to, technical information, business and marketing plans, strategies, customer
(or potential customer) information, other information concerning the products,
promotions, development, financing, pricing, technology, inventions, expansion
plans, business policies and practices of the Company Affiliated Group, whether
or not reduced to tangible form, and other forms of information considered by
the Company Affiliated Group to be confidential and in the nature of trade
secrets. The Executive will not knowingly disclose such information, either
directly or indirectly, to any person or entity outside the Company Affiliated
Group without the prior written consent of the Company; provided, however, that
(i) the Executive shall have no obligation under this Section 9(a) with respect
to any information that is or becomes publicly known other than as a result of
the Executive's breach of the Executive's obligations hereunder and (ii) the
Executive may (x) disclose such information to the extent he determines that so
doing is reasonable or appropriate in the performance of the Executive's duties
or, (y) after giving prior notice to the Company to the extent practicable,
under the circumstances, disclose such information to the extent required by
applicable laws or governmental regulations or by judicial or regulatory
process. Upon termination of the Executive's employment, the Executive shall
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 and any other tangible product or
document which has been produced by, received by or otherwise submitted to the
Executive in the course of or otherwise in connection with the Executive's
services to the Company Affiliated Group during or prior to the Employment Term.
(b) Non-Competition and Non-Solicitation. During the
period commencing upon the Effective Date and ending on the 18-month anniversary
of the termination of the Executive's employment with the Company, the Executive
shall not, as an employee, employer, stockholder, officer, director, partner,
associate, consultant or other independent contractor, advisor, proprietor,
lender, or in any other manner or capacity (other than with respect to the
Executive's services to the Company Affiliated Group), directly or indirectly:
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(i) perform services for, or otherwise have any
involvement with, a business unit of a person, where such business unit competes
directly or indirectly with any member of the Company Affiliated Group by owning
or operating (x) broadband communications networks for telephone, cable
television or internet services or (y) transmission networks for television and
radio broadcasting, in each case principally in the United Kingdom or Ireland
(the "Core Business"); provided, however, that this Agreement shall not prohibit
the Executive from owning up to 1% of any class of equity securities of one or
more publicly traded companies;
(ii) hire any individual who is, or within the 12
months prior to the Executive's termination was, an employee of any member of
the Company Affiliated Group whose base salary at the time of hire exceeded
$100,000 per year; or
(iii) solicit, in competition with any member of
the Company Affiliated Group in the Core Businesses, any business, or order of
business from any person that the Executive knows was a current or prospective
customer of any member of the Company Affiliated Group during the Executive's
employment.
(c) 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 or prior to 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 Slates 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.
(d) Acknowledgment. The Executive expressly recognizes
and agrees that the restraints imposed by this Section 9 are reasonable as to
time and geographic scope and are not oppressive. The Executive further
expressly recognizes and agrees that the restraints imposed by
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this Section 9 represent a reasonable and necessary restriction for the
protection of the legitimate interests of the Company Affiliated Group, that the
failure by the Executive to observe and comply with the covenants and agreements
in this Section 9 will cause irreparable harm to the Company Affiliated Group,
that it is and will continue to be difficult to ascertain the harm and damages
to the Company Affiliated Group that such a failure by the Executive would
cause, that the consideration received by the Executive for entering into these
covenants and agreements is fair, that the covenants and agreements and their
enforcement will not deprive the Executive of an ability to earn a reasonable
living, and that the Executive has acquired knowledge and skills in this field
that will allow the Executive to obtain employment without violating these
covenants and agreements. The Executive further expressly acknowledges that the
Executive has consulted independent counsel, and has reviewed and considered
this Agreement with that counsel, before executing this Agreement.
10. Indemnification.
(a) 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
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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.
11. Certain Additional Payments by the Company. Anything in this
Agreement to the contrary notwithstanding, in the event that it is determined
(as hereafter provided) that any payment (other than the Gross-Up payments
provided for in this Section 11) or distribution by the Company or any of its
affiliates to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan, program
or arrangement, including without limitation any stock option, performance
share, performance unit, stock appreciation right or similar right, or the lapse
or termination of any restriction on or the vesting or exercisability of any of
the foregoing (a "Payment"), would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or
any successor provision thereto) by reason of being considered "contingent on a
change in ownership or control" of the Company, within the meaning of Section
28OG of the Code (or any successor provision thereto) or to any similar tax
imposed by state or local law, or any interest or penalties with respect to such
tax (such tax or taxes, together with any such interest and penalties, being
hereafter collectively referred to as the "Excise Tax"), then the Executive will
be entitled to receive an additional payment or payments (collectively, a
"Gross-Up Payment"). The Gross-Up Payment will be in an amount such that, after
payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including any Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed
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upon the Payment. For purposes of determining the amount of the Gross-Up
Payment, the Executive will be considered to pay (x) federal income taxes at the
highest rate in effect in the year in which the Gross-Up Payment will be made
and (y) state and local income taxes at the highest rate in effect in the state
or locality in which the Gross-Up Payment would be subject to state or local
tax, net of the maximum reduction in federal income tax that could be obtained
from deduction of such state and local taxes.
12. Miscellaneous.
(a) Non-Waiver of Rights. The failure to enforce at any
time the provisions of this Agreement or to require at any time performance by
the 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 either party to enforce each and
every provision in accordance with its terms. No waiver by either party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar conditions or provisions at
that time or at any prior or subsequent time.
(b) Notices. All notices required or permitted hereunder
will be given in writing, by personal delivery, by confirmed facsimile
transmission (with a copy sent by express delivery) or by express next-day
delivery via express mail or any reputable courier service, in each case
addressed as follows (or to such other address as may be designated):
If to the Company: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Secretary
Fax: (000) 000-0000
If to the Executive: Xxxxx Xxxxxxxx
Notices that are delivered personally, by confirmed facsimile transmission, or
by courier as aforesaid, shall be effective on the date of delivery.
(c) 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
(whether direct or indirect, by purchase, merger, consolidation, reorganization
or otherwise) and assigns. Notwithstanding the provisions of the
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immediately preceding sentence, the Executive shall not assign all or any
portion of this Agreement without the prior written consent of the Company.
(d) Withholding. The Company shall withhold or cause to
be withheld from any payments made pursuant to this Agreement all federal,
state, city or other taxes as shall be required to be withheld pursuant to any
law or governmental regulation or ruling.
(e) Entire Agreement. This Agreement constitutes the
complete understanding between the parties with respect to the Executive's
employment and supersedes any other prior oral or written agreements,
arrangements or understandings between the Executive and any member of the
Company Affiliated Group. Without limiting the generality of the Plan or Section
11 of this Agreement or this Section 12(e), effective as of the Effective Date,
this Agreement supersedes any existing employment, retention, severance and
change-in-control agreements or similar arrangements or understandings
(collectively, the "Prior Agreements") between the Executive and the Company and
any member of the Company Affiliated Group, and any and all claims under or in
respect of the Prior Agreements that the Executive may have or assert on or
following the Effective Date shall be governed by and completely satisfied and
discharged in accordance with the terms and conditions of this Agreement. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party that are not
set forth expressly in this Agreement.
(f) 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.
(g) Governing Law, Etc. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Delaware,
without reference to the principles of conflict of laws. Any proceeding based
upon or arising out of this Agreement may be brought only in a federal or state
court in New York City.
The Company will reimburse or, at the option of the Executive,
advance in either case within five business days of submission of copies of
invoices therefor, all costs and expenses that the Executive may incur for
legal, tax or other advice relating to the interpretation or enforcement of this
Agreement or the effect thereof upon the Executive.
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In light of the disparity of resources between the Company and
the Executive and in order to induce the Executive to become a senior manager of
the Company in the first instance, the Company expressly agrees to make or pay
such reimbursements or advances regardless of the outcome thereof or of any
claim or proceeding relating thereto, including without limitation if the
Executive is unsuccessful in a proceeding in respect thereof, and that such
amounts will be paid as herein provided on an as-incurred basis, regardless of
the status of any claim or proceeding relating thereto or otherwise.
(h) Modifications. Neither this Agreement nor any
provision hereof may be modified, altered, amended or waived except by an
instrument in writing duly signed by the party to be charged.
(i) Number and Headings. Whenever any words used herein
are in the singular form, they shall be construed as though they were also used
in the plural form in all cases where they would so apply. The headings
contained herein are solely for purposes of reference, are not part of this
Agreement and shall not in any way affect the meaning or interpretation of this
Agreement.
(j) Counterparts. This Agreement may be executed in 2 or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(signature page follows)
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed, and the Executive has executed this Agreement as of the day and
year first above written, in each case effective as of the Effective Date.
NTL Incorporated
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Its EVP
/s/ Xxxxx Xxxxxxxx
---------------------------------------------
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APPENDIX A
TERM SHEET FOR EX-XXX ASSIGNMENT
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INDIVIDUAL XXXXX XXXXXXXX
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I) Status U.S. EE Seconded at the time of hire for purposes of these provisions
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II) Term Not to Exceed the term of the employment contract
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III) Benefits
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A) Excluded from tax
equalization (i.e. benefits are paid at
this level net of any tax obligation -
executive does not pay tax obligations).
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Housing Allowance L1850/wk
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School Allowance N/A
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Auto Allowance Car Service/Driver
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Travel Allowance(1) 10 R.T. Tickets annually
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Health Insurance CIGNA Int'l with supplemental U.S. Coverage
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Tax Preparation Per NTL Policy
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Relocation Per NTL Policy
UK Club dues For local Health Club and NTL designated Country Club
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IV) Tax Equalization(2) Per NTL Policy
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V) Other NTL agrees to pay membership fees for 1 year, for up to 3 U.S. Country
Clubs where SES has existing memberships. Excluded from tax equalization and if
taxed, a tax gross-up will be provided by NTL.
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(1) Utilizing full unrestricted coach fares from Chicago to London payable at
the time of hire for 2003 and annually thereafter
(2) Tax equalization based upon Illinois State hypo tax.
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Appendix B
Stock Options under NTL Incorporated 2003 Stock Option Plan ("Plan")
OPTIONS GRANTED ON THE EFFECTIVE DATE:
Tranche A
175,000 options; granted 20% immediately, 20% on each of 3/31/03, 6/30/03,
9/30/03, 12/31/03. Strike Price - of initial grant is $15.00 and of subsequent
grants as determined by compensation committee; - vests 1/3 on each anniversary
date of issuance. Upon any termination vested options must be exercised within
three months of the termination date.
Tranche B
25,000 options; granted 20% immediately, 20% on each of 3/31/03, 6/30/03,
9/30/03, 12/31/03. Strike Price - of initial grant is $15.00 and of subsequent
grants as determined by compensation committee; vest 1/3 on each anniversary
date of issuance, but any unvested options accelerate and fully vest on
12/31/04. Upon any termination vested options must be exercised within three
months of the termination date.
Other Terms
Options will have a ten-year total term. Options vesting will
accelerate on an Acceleration Event as defined in the Plan.
1
Appendix C
NTL DIGITAL US INC CORPORATION
TAX & SOCIAL SECURITY EQUALISATION POLICY
A. OBJECTIVE
A TAX & SOCIAL SECURITY EQUALISATION POLICY has been established for
employees on foreign assignment, as an employee's actual tax liability
will be different from what it would have been in the home country.
(This is because expatriate allowances and reimbursements may be
taxable in the foreign country; the employee is also likely to remain
subject to home country taxes).
This policy ensures that an expatriate's total tax burden will
approximate to that of an NTL DIGITAL US INC employee working in the US
with comparable NTL DIGITAL US INC income, personal income,
adjustments, deductions and exemptions, irrespective of host (i.e.,
assignment) country.
By equalising income tax and social security costs for its expatriates,
NTL DIGITAL US INC intends that each expatriate shall fully comply with
the tax filing and payment requirements imposed by the taxing
authorities in his country of assignment and by his home country.
Assistance will be provided to the expatriate by an international tax
consulting firm in order to meet these tax return filing requirements.
B. REPORTING, OBLIGATION
NTL DIGITAL US INC requires that all employees be familiar and comply
fully with all applicable national and local laws. In connection with
tax and social security matters, the following guidelines ensure that
NTL DIGITAL US INC and its expatriates will fully comply with worldwide
income tax and social security requirements.
- NTL DIGITAL US INC regards compliance with worldwide
income tax and social security requirements as a
mandatory obligation of each expatriate.
- An expatriate must conduct himself at all times so as
to avoid charges of fiscal evasion or abuse, or of
violation of local law, which could jeopardise in any
way his standing personally or as a representative of
NTL DIGITAL US INC.
- An expatriate is expected to exercise care and
attention in minimising his liability for worldwide
income taxes and social security contributions in
accordance with appropriate principles of fiscal
planning. An expatriate must co-operate with NTL
DIGITAL US INC to ensure that his tax returns are
filed in such a manner as to produce the lowest
possible tax permitted by law.
Each expatriate is required to report taxable income and pay income
taxes to the taxing authorities which have jurisdiction during the
period of his International Assignment.
1
The income tax and social security contributions to be paid by each
expatriate will be governed by the fiscal laws and regulations under
which the authorities operate.
C. TAX RETURN PREPARATION ASSISTANCE
It is the responsibility of each expatriate to ensure that the proper
income tax returns are filed when due. NTL DIGITAL US INC has engaged
an international tax consulting firm to assist expatriate employees in
meeting this obligation. The fee for such services will be borne by NTL
DIGITAL US INC.
Tax returns prepared by the international tax consulting firm will be
kept confidential by them.
D. IMPLEMENTATION OF TAX EQUALISATION
NTL DIGITAL US INC will continue to withhold actual US Social Security
Taxes from the base salary of a US citizen or green-card holder during
an International Assignment, subject to maximum statutory limitations.
As noted above, under the NTL DIGITAL US INC TAX & SOCIAL SECURITY
EQUALISATION POLICY, each expatriate will have a total income tax
burden approximately equal to that of an NTL DIGITAL US INC employee
working in the US with comparable income, adjustments, deductions and
exemptions.
This is achieved by calculating a hypothetical tax liability and
subtracting this amount from the expatriate's base salary during the
year.
Having reduced base salary by a retained hypothetical US income tax,
NTL DIGITAL US INC will assume responsibility for paying the
expatriate's actual worldwide income tax liability as well as his
actual local social tax, if any.
After the close of the year, and after an expatriate's US Federal (and
State, if required) income tax return has been filed, the international
tax consulting will prepare a year-end reconciliation. The "retailed
hypothetical US income tax" will be adjusted, to reflect actual income
and deductions in place of estimated amounts used at the beginning of
the year. This reconciliation will be the basis of a final settlement
between NTL DIGITAL US INC and the expatriate of that year's income tax
reimbursement.
1. HYPOTHETICAL US INCOME TAX (RETAINED FROM PAY)
Hypothetical tax represents an estimate of the expatriate's US
Federal and Illinois State tax obligations on his or her
projected taxable income. This will be calculated using actual
filing status, current dependency exemptions and tax rates for
the taxable year. NTL DIGITAL US INC has agreed to calculate
hypothetical State tax based on Illinois rates, since this is
where payroll is maintained, irrespective of an individual's
`home' state prior to accepting overseas assignment.
2
Income to be included in the hypothetical tax calculations is
as follows:
- base salary
- bonus
- group term life
- personal passive (investment) income
If married, passive income of expatriate's spouse will also be
included. Subject to the specific exception below, spousal
salary or other earned income, however, is specifically
excluded from the Hypothetical calculation. Rationale: spouse
is eligible to elect Sec.911 foreign earned income exclusion
in their own right. This, plus credit for foreign taxes paid
on foreign source wages, should result in no incremental US
tax being due on such income. Spouse remains personally liable
for all foreign income and social security taxes due.
In arriving at hypothetical taxable income, deductions will be
available for:
- actual amounts claimed on Federal income tax return
to arrive at adjusted gross income.
- actual itemised deductions per Federal return,
excluding moving expenses.
- mortgage interest and real estate taxes paid per
Federal Schedule A or, if home is sold during
overseas assignment, the amounts deductible in last
complete tax year prior to sale.
- credit will be given for hypothetical Illinois State
taxes calculated, if this figure is higher than
actual taxes claimed in Federal return.
The hypothetical US income tax retained from pay may be
changed by NTL DIGITAL US INC during the course of a year
whenever there is a change in the expatriate's base salary,
401(k) contribution, or other NTL DIGITAL US INC
income/related deductions, or a change in filing status or
number of dependants. Also, upon notification and verification
of US itemised deductions and deductible losses and
adjustments such as US rental losses and alimony, NTL DIGITAL
US INC may reduce the retailed hypothetical tax to give the
expatriate current tax benefit. Conversely, NTL DIGITAL US INC
may increase the retailed hypothetical tax in order to collect
the additional hypothetical US income tax on net personal
income such as dividends and interest.
The hypothetical US income tax retained from pay is not a
withholding tax and should not be confused with the amount of
US income tax withholding to which the expatriate may have
been subject prior to the International Assignment. The
3
two amounts are calculated in different ways and will often be
different in amount. THE HYPOTHETICAL US INCOME TAX IS SIMPLY
A NEGATIVE ITEM IN THE EXPATRIATE'S COMPENSATION PACKAGE
WHICH, BECAUSE IT APPROXIMATES HIS TAX OBLIGATION FOR THE YEAR
ON NTL DIGITAL US INC INCOME, PROVIDES THE EXPATRIATE WITH
APPROXIMATELY THE SAME NET LEVEL OF SPENDABLE INCOME AS A
COUNTERPART US EMPLOYEE.
Spousal Income - Exception
In the event that both spouses are employed by NTL DIGITAL US
INC and on foreign assignment, the hypothetical tax liability
will be based on the inclusion of all income (as above) and
calculated on the basis of the married fling joint tax rates.
The hypothetical taxes payable by each spouse will be in
proportion to their respective gross income (as defined
above), but net of 401k contributions and/or other NTL DIGITAL
US INC income/related deductions.
2. FINAL HYPOTHETICAL US INCOME TAX (FOR TAX REIMBURSEMENT
PURPOSES)
As stated above, after the close of the year, the "retained
hypothetical US income tax" will be adjusted to a "final
hypothetical US income tax" based on actual amounts. This
hypothetical US income tax then becomes the "final" income tax
burden which an expatriate must bear for such year, and will
approximate that of an NTL DIGITAL US INC employee in the US
with comparable base salary, bonus, other NTL DIGITAL US INC
income, personal income or losses, deductions and exemptions.
Because the United States taxes its citizens and green-card
holders on worldwide income, the final hypothetical US income
tax will be based not only on NTL DIGITAL US INC base salary
and bonus, but also on the expatriate's taxable net personal
income or loss, adjustments, and in most circumstances on his
actual itemised deductions as well. In the absence of a
reduction in the retained hypothetical US tax as discussed
above, the NTL DIGITAL US INC expatriate with losses, alimony
or itemised deductions will likely receive a cash
reimbursement from NTL DIGITAL US INC after the end of the
year. On the other hand, an NTL DIGITAL US INC expatriate with
net personal income will be obliged to make a cash payment to
NTL DIGITAL US INC after the end of the year equal to the
additional hypothetical tax on such income. Such expatriates
are thereby on notice that they must have sufficient cash to
pay this hypothetical tax on personal income, or make
arrangements for NTL DIGITAL US INC to retain it through
payroll or to make payments of Estimated US income tax to the
IRS and to State tax authorities, if applicable.
The final hypothetical US income tax will be based on the
following items:
(a) NTL DIGITAL US INC Income
4
- Base salary, less 401(k) contributions and any
other pre-tax employee contributions. (For this
purpose, in the case of an employee who works a
part-year on International Assignment for NTL
DIGITAL US INC and who works a part-year for NTL
DIGITAL US INC in the US base salary will be the
sum of the two part-year base salaries).
- Cash bonuses and any other cash incentive
compensation.
- (Income from the exercise of NTL DIGITAL US INC
Stock Options. (Note, however, that while an
expatriate will be charged a US hypothetical tax
on Stock Option income, it is in the best
interests of the expatriate, and of NTL DIGITAL
US INC, for the tax consequences of stock option
exercises to be thoroughly discussed with the
international tax consulting firm in advance of
the exercise and of any subsequent sale of
shares, in order to mitigate adverse tax
consequences).
- Income from any other NTL DIGITAL US INC
stock-based incentive plan.
- Imputed income from group term life insurance and
any other employee benefit considered taxable in
the US which the expatriate would have received
independent of his International Assignment.
- Overseas allowances are excluded from all
calculations of hypothetical tax to ensure that
NTL DIGITAL US INC bears the full cost of any tax
imposed on these allowances.
(b) Net Personal Income
"Net personal income" is the positive amount which
results from subtracting "personal losses" from
"personal income". NTL DIGITAL US INC reserves the
right to "cap" the amount of net personal income
which it will tax equalise under this policy, and
also to limit its reimbursement of host country
income taxes thereon when such taxes could have been
avoided by following the tax advice of the
international tax consulting firm.
"Personal income" encompasses income earned or
received from sources other than NTL DIGITAL US INC.
It includes, but is not limited to, amounts from the
following sources which are taxable on an
expatriate's actual US income tax return:
- Dividends
- Interest
5
- State income tax refunds
- Net capital gain, other than gain from the sale
of an expatriate's US principal residence and
gain from the sale of any residence owned by the
expatriate country of assignment.
- Net rental income (but excluding any NTL DIGITAL
US INC - funded expenses).
- Net partnership income.
Capital gain arising from the sale of an expatriate's
US principal residence will not be tax equalised
under the NTL DIGITAL US INC policy. In this
connection, it is possible for an expatriate who
sells his US principal residence (upon taking an
International Assignment) to defer the Federal (but
not all states') income tax on his gain, if any, by
reinvesting the proceeds (within certain time limits)
in a new principal residence. The tax consequences of
selling versus renting should be discussed with the
international tax consulting firm. In the event an
expatriate chooses to sell his US principal
residence, at any time, the expatriate will be
responsible for the full amount of the income tax
payable, if any, on the gain therefrom, as well as
the full amount of the income tax payable, if any, on
the sale of any residence owned by the expatriate in
the country of assignment.
"Personal Income" also includes:
- Any salaries or compensation received by the
expatriate prior to, or subsequent to, the
International Assignment, while self-employed or
employed by a corporation unrelated to NTL
DIGITAL US INC.
- Any salaries, compensation or self-employment
income received by the expatriate's spouse prior
to, or subsequent to, the International
Assignment.
During the period of the expatriate's
International Assignment, to the extent that
an expatriate's spouse has a job in the host
country, or is self-employed there, the
spouse will be fully responsible for any
income and social taxes imposed on the
spouse's income. In this circumstance, the
Year-End US. Tax Equalisation calculation
will not reflect a final hypothetical US
income tax on such income; and in
calculating the actual US income tax if any,
attributable to the spouse's income, the
spouse will receive the full benefit of the
spouse's "earned income exclusion" and the
appropriate "foreign tax credit" available
under US tax law. However, where the host
country is the UK, the "married couple's
allowance" will be
6
deemed deductible by the NTL DIGITAL US INC
expatriate and not by his spouse.
"Personal losses" encompass losses funded
exclusively by the expatriate. This category
includes, but is not limited to:
- Net capital loss deductible on the
actual US income tax return.
- Net rental loss deductible on the
actual US income tax return (but
excluding any NTL DIGITAL US INC
funded expenses).
- Net partnership loss deductible on
the actual US income tax return.
(c) Net Personal Loss
"Net Personal Loss is the negative amount which
results from subtracting "personal losses" from
"personal income".
(d) Deductions
The following deductions which are not funded by NTL
DIGITAL US INC via a specific allowance payment will
be allowed in arriving at an expatriate's
hypothetical taxable income for purposes of computing
his final hypothetical US income tax:
Adjustments to gross income claimed on the
expatriate's actual US income tax return for the
taxable year, such as alimony, forfeited interest,
and deductible XXX contributions; plus
- the amount of actual itemised deductions
deductible on an expatriate's US income tax
return for the taxable year plus the amount
of the final hypothetical State income tax
for the year;
- an amount equal to the last full tax year's
expense for mortgage interest and real
estate taxes where the principal residence
in USA has been sold.
An expatriate's actual itemised deductions will be
reduced by those expenses (principally moving
expenses) which were reimbursed (directly or in the
form of an allowance) by NTL DIGITAL US INC.
(e) Tax Rates & Filing Status
7
In computing the final hypothetical US income tax,
the tax rates and filing status to be used are those
used on the actual US income tax return (and State
return, if required) for the taxable year.
(f) Tax Income Taxes
The State portion of the final hypothetical US income
tax will be adjusted after year-end to include the
various items of income and deductions described
above, applying the tax laws of the State of Illinois
which would have been applicable to an expatriate if
he had remained in the US.
In most cases, an expatriate will not be subject to
actual State income taxes on his worldwide earnings
abroad. However, some states may attempt to assess
state income taxes in certain situations. Where this
occurs, the following rules will apply:
- Tax based on "domicile" or "residence" in year of
departure from US or return to US
Some states assess tax on an expatriate's overseas
earnings due to the fact that the expatriate was
domiciled in that state during the year.
In such cases, an equitable adjustment will be made
to keep the expatriate whole.
- State Income Tax on Business Trips to the US
In certain circumstances, business trips to the US by
an expatriate may attract State income tax on
earnings related to such business trips. NTL DIGITAL
US INC will reimburse an expatriate for all state
income taxes assessed on income earned on business
trips to the US.
3. REIMBURSEMENT OF ACTUAL WORLDWIDE INCOME TAXES & LOCAL SOCIAL
SERVICES
Having reduced an expatriate's compensation by a retained
hypothetical US income tax which is later adjusted to a final
hypothetical US tax, NTL DIGITAL US INC will reimburse the
actual amount of worldwide income taxes paid by an expatriate
as well as local social taxes paid, if any.
In general, NTL DIGITAL US INC employees on International
Assignment will be subject to income and social taxes in their
country of assignment. Where this is the case, NTL DIGITAL US
INC expects each expatriate to comply fully with the tax laws
of such country, relying on the services of the international
tax consulting firm in the preparation of required tax returns
and in legally minimising income tax liabilities.
8
Whenever an expatriate must pay a local income or social tax,
NTL DIGITAL US INC will at that time pay the amount of such
tax to or on behalf of the expatriate. This includes local
income and social taxes in the form of:
- Withholding taxes which NTL DIGITAL US INC
is required to pay over to the assignment
country government.
- Estimated tax filings made during the year.
- Payment of the balance due with the
assignment country income tax return or upon
final assessment for the tax year.
In all cases, the expatriate's cash flow will not be reduced
by tax payments to the assignment country government.
Verification of the actual amount of local taxes paid by each
expatriate will be provided by Ernst & Young, which will
communicate the amount thereof to NTL DIGITAL US INC. An
amount equal to any local tax refunds must be paid or turned
over to NTL DIGITAL US INC by the expatriate, since NTL
DIGITAL US INC (and not the expatriate) will have funded all
local taxes.
4. YEAR-END US TAX EQUALISATION
After an expatriate's US income tax return (if required) has
been filed, the international tax consulting firm will prepare
a tax reconciliation.
NTL DIGITAL US INC will provide to the consultants the salary
and other information (retained hypothetical tax, etc.)
necessary to complete this form. The consultants will send the
Year-End US Tax reconciliation to NTL DIGITAL US INC, who will
review the calculation and then forward it to the expatriate.
The "Year-End US Tax reconciliation" will reconcile the
retained hypothetical US income tax with the final
hypothetical US income tax for the year. It will also disclose
the actual US income tax for the year (if any) which, under
this policy, is fully reimbursable by NTL DIGITAL US INC. The
reconciliation will then indicate the net reimbursement owed
to/by the expatriate, and NTL DIGITAL US INC reimbursement
will be made as appropriate and final.
NTL DIGITAL US INC will reimburse the expatriate for all
interest and penalties relating to NTL DIGITAL US INC income
except when the assessment of the interest and penalties
results from the negligence or fault of the expatriate; e.g.,
a delay in submitting data booklets or tax questionnaires to
the consultants which in turn prevents the timely filing of a
return.
NTL DIGITAL US INC will also reimburse interest imposed on any
balance due resulting from an extended due date for filing US
tax returns granted to US taxpayers residing overseas.
9
5. CREDITS ALLOWED AGAINST US TAX FOR LOCAL TAXES PAID
Any tax credits for local taxes (referred to as "foreign tax
credits") reimbursed by NTL DIGITAL US INC which reduce an
expatriate's US income tax liability prior to, during or
subsequent to his International Assignment, will be considered
to be for the benefit of NTL DIGITAL US INC.
It also includes tax credits (reimbursed by NTL DIGITAL US
INC) which are carried back or carried forward, regardless of
whether the income in the carryback or carry forward year is
related to the International Assignment. In such instances, an
expatriate must pay the amount of his tax refund received from
the Internal Revenue Service, plus interest, to NTL DIGITAL US
INC. This payment is to be made within 10 days of receipt of
the refund.
6. NET OPERATING LOSSES
Any net operating losses resulting from exclusions available
to US citizens working abroad will be considered to be for the
benefit of NTL DIGITAL US INC, because the tax benefit of
these personal losses will have been fully realised by the
expatriate in the hypothetical tax calculation. This includes
a net operating loss which is carried back or carried forward
regardless of whether the income in the carryback or carry
forward year is related to the International Assignment. In
such instances, an expatriate must pay the amount of his tax
refund received from the Internal Revenue Service and
applicable state tax authority, plus interest, to NTL DIGITAL
US INC. This payment is to be made within 10 days of receipt
of the refund.
7. SUBSEQUENT ADJUSTMENTS
Assignment country government or US Internal Revenue Service
or State government examinations of expatriate income tax
returns are not uncommon. When they occur, the year-end US or
local tax equalisation for that year will be recomputed, if
necessary, with adjustments made as appropriate.
8. "TAX ON TAX"
Whenever NTL DIGITAL US INC reimburses local or US income
taxes (either currently, or in the following year), such
reimbursements themselves constitute taxable income for US
income tax purposes and, generally, for assignment country tax
purposes as well. Under the NTL DIGITAL US INC TAX & SOCIAL
SECURITY EQUALISATION POLICY, any "final" tax paid with
respect to income tax reimbursements will be fully reimbursed
by NTL DIGITAL US INC.
For repatriated employees receiving tax reimbursements during
the year subsequent to termination of their International
Assignment, the payment may be
10
grossed up to include any final tax due on the reimbursement
in order to keep the employee whole.
9. SHORT-TERM LOANS
Even though compensation is reduced by the hypothetical US
income tax, it may be necessary for NTL DIGITAL US INC to
withhold actual US or local taxes as applicable, and to remit
these taxes to the proper US and local taxing authorities. In
order to ease the expatriate's cash flow burden, the
expatriate in such cases will receive a loan equal to the
local and/or US taxes withheld, with the approval of NTL
DIGITAL US INC. This loan will, to the extent possible, be
remitted to the expatriate at the same time that the salary
check is issued. The total loan will be settled in the
following year at the time the Year-End US or local tax
reconciliation is prepared.
10. ANNUAL SETTLEMENT WITH EXPATRIATE
When the Year-End Equalisation calculations result in a
balance due to the expatriate, the amount will first be
applied against any outstanding loans for the same year. The
remainder will be paid by NTL DIGITAL US INC to the
expatriate.
If loans for a particular year exceed the amount of the tax
equalisation balance due, the expatriate must repay such
excess loans to NTL DIGITAL US INC within 10 days of receiving
the applicable refund of taxes from the US or local government
taxing authorities. NTL DIGITAL US INC reserves the right to
recapture all unpaid tax loans by reducing the expatriate's
base salary.
11. TREATMENT OF NEW, RETURNING, TERMINATED AND RETIRED
EXPATRIATES
For an expatriate who is hired, transferred, terminated or who
returns home during the year, the Year-End US Tax Equalisation
will be adjusted in order to compare:
- Hypothetical US income tax retained from
compensation (described above) during the
portion of the year spent on International
Assignment,
- Final hypothetical US income tax (described
above) on the entire year's income, and
- Actual US income tax liability on Form 1040
for the entire year.
Where the expatriate was employed by an employer other than
NTL DIGITAL US INC or any affiliate during the year,
compensation from the expatriate's previous or subsequent
employer will be treated as personal income and will therefore
be subject to US hypothetical tax and will be fully tax
equalised.
11
Where the expatriate spent part of the year (either
pre-assignment or post assignment) in the US he will be fully
responsible for applicable State income taxes assessed during
such part-year periods, except to the extent that such state
income taxes are increased by a NTL DIGITAL US INC allowance
on which NTL DIGITAL US INC assumes responsibility for paying
actual taxes.
12. TREATMENT OF EXPATRIATES WHO ARE MARRIED TO PARTICIPANTS IN
TAX EQUALISATION POLICIES OF OTHER EMPLOYERS
For an expatriate whose spouse is employed in the host country
by entities other than NTL DIGITAL US INC and is covered by a
tax equalisation policy of another employer, the manner in
which the final hypothetical tax and reimbursable US and local
taxes are calculated will be determined on a case-by-case
basis. This approach will ensure that an NTL DIGITAL US INC
expatriate receives the protection to which he is entitled
under the NTL DIGITAL US INC TAX & SOCIAL SECURITY
EQUALISATION POLICY by eliminating any distorted results which
could occur if the standard calculations were performed.
12
Appendix D
RELEASE AGREEMENT
In consideration of the payments and benefits provided for or
referred to in the attached Schedule (the "Benefits"), and the release from
[employee's name] (the "Employee") set forth herein, NTL Incorporated (the
"Company") and the Employee agree to the terms of this Release Agreement.
1. The Employee acknowledges and agrees that the Company is under
no obligation to offer the Employee the Benefits, unless the Employee consents
to the terms of this Release Agreement. The Employee further acknowledges that
he/she is under no obligation to consent to the terms of this Release Agreement
and that the Employee has entered into this agreement freely and voluntarily.
2. The Employee voluntarily, knowingly and willingly releases and
forever discharges the Company and its Affiliates, together with their
respective officers, directors, partners, shareholders, employees, agents, and
the officers, directors, partners, shareholders, employees, agents of the
foregoing, as well as each of their predecessors, successors and assigns
(collectively, "Releasees"), from any and all charges, complaints, claims,
promises, agreements, controversies, causes of action and demands of any nature
whatsoever that the Employee or his/her executors, administrators, successors or
assigns ever had, now have or hereafter can, shall or may have against Releasees
by reason of any matter, cause or thing whatsoever arising prior to the time of
signing of this Release Agreement by the Employee. The release being provided by
the Employee in this Release Agreement includes, but is not limited to, any
rights or claims relating in any way to the Employee's employment relationship
with the Company, or the termination thereof, or under any statute, including
the federal Age Discrimination in Employment Act of 1967, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1990, the Americans with
Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974,
the Family and Medical Leave Act of 1993, each as amended, and any other
federal, state or local law or judicial decision. 3. The Employee acknowledges
and agrees that he/she shall not, directly or indirectly, seek or further be
entitled to any personal recovery in any lawsuit or other claim against the
Company or any other Releasee based on any event arising out of the matters
released in paragraph 2.
3. Nothing herein shall be deemed to release (i) any of the
Employee's rights to the Benefits or (ii) any of the benefits that the Employee
has accrued prior to the date this Release Agreement is executed by the Employee
under the Company's employee benefit plans and arrangements, or any agreement in
effect with respect to the employment of the Employee of (iii) any claim for
indemnification as provided under Section 10 of the Employment Agreement.
4. In consideration of the Employee's release set forth in
paragraph 2, the Company knowingly and willingly releases and forever discharges
the Employee from any and all charges, complaints, claims, promises, agreements,
controversies, causes of action and demands of any nature whatsoever that the
Company now has or hereafter can, shall or may have against him/her by reason of
any matter, cause or thing whatsoever arising prior to the time of signing of
this
1
Release Agreement by the Company, provided, however, that nothing herein is
intended to release any claim the Company may have against the Employee for any
illegal conduct.
5. The Employee acknowledges that the Company has advised him/her
to consult with an attorney of his/her choice prior to signing this Release
Agreement. The Employee represents that, to the extent he/she desires, he/she
has had the opportunity to review this Release Agreement with an attorney of
his/her choice.
6. The Employee acknowledges that he/she has been offered the
opportunity to consider the terms of this Release Agreement for a period of at
least forty-five (45) days, although he/she may sign it sooner should he/she
desire. The Employee further shall have seven additional days from the date of
signing this Release Agreement to revoke his/her consent hereto by notifying, in
writing, the General Counsel of the Company. This Release Agreement will not
become effective until seven days after the date on which the Employee has
signed it without revocation.
_______________________________________________
[Employee Name]
_______________________________________________
By: ___________________________________________
2
Appendix E
A "Change in Control" shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have occurred:
(i) Any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
(not including in the securities beneficially owned
by such Person any securities acquired directly from
the Company) representing 30% or more of the combined
voting power of the Company's then outstanding
securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction
described in clause (a) of Paragraph (iii) below; or
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then
serving: individuals who, on the date the Plan is
adopted by the Board of Directors of the Company
("Board"), constitute the Board and any new director
(other than a director whose initial assumption of
office is in connection with an actual or threatened
election contest, including but not limited to a
consent solicitation, relating to the election of
directors of the Company) whose appointment or
election by the Board or nomination for election by
the Company's stockholders was approved or
recommended by a vote of at least a majority of the
directors then still in office who either were
directors on the date hereof or whose appointment,
election or nomination for election was previously so
approved or recommended; or
(iii) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the
Company with any other corporation, other than (a) a
merger or consolidation which would result in the
voting securities of the Company outstanding
immediately prior to such merger or consolidation
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the Company or such surviving entity or
any parent thereof outstanding consolidation effected
to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes
the Beneficial Owner, directory or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person any
securities acquired directly from the Company)
representing 30% or more of the combined voting power
of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or
there is consummated an agreement for the sale or
disposition by the Company of all or substantially
all of the Company's assets, other than a sale or
disposition by the Company of all substantially all
of the Company's assets to an entity, at least 50% of
the combined voting power of the voting securities of
which are owned by the stockholders of the Company
immediately prior to such sale.
1
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
For purposes of this Appendix E:
"Affiliate" shall have the meaning set forth in Rule 12b-2 under Section 12 of
the Securities Exchange Act of 1934.
"Person" shall have the meaning given in Section 3(a)(9) of the Securities
Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d) thereof,
except that such terms shall not include (i) the Company or any of its
Affiliates, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company.
"Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the
Securities Exchange Act of 1934, except that a Person shall not be deemed to be
the Beneficial Owner of any securities which are properly filed on a Form 13-G.
2
