EXHIBIT 10.9
FLAG TELECOM GROUP LIMITED
October 10, 2002
▇▇▇▇▇▇ Bande
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
TERMINATION AGREEMENT
Dear ▇▇▇▇▇▇:
This letter agreement (this "AGREEMENT") sets forth the terms of your
termination from employment as Chairman and Chief Executive Officer of FLAG
Telecom Group Limited, a limited company organized under the laws of Bermuda
(the "COMPANY"). This Agreement shall be signed simultaneously with the U.K.
Compromise Agreement attached hereto as Attachment 4 (the "U.K. AGREEMENT").
1. RESIGNATION
(a) Effective as of the first day following the "Effective Date,"
as defined in FLAG's Third Amended and Restated Joint Plan of Reorganization
(the "PLAN"), (hereinafter, the "EFFECTIVE DATE," and such first day following
the Effective Date, the "TERMINATION DATE"), you will cease to be an employee of
the Company and its subsidiaries (collectively, the "COMPANIES"), the Chairman
and Chief Executive Officer of the Company, and an officer of any of the
Companies. By signing this Agreement, you hereby resign as of the Termination
Date as a director of the Company, as a director of any of the other Companies
for which you are then serving as a director, and from every other capacity in
which you serve the Companies, including, if applicable, as an officer or
employee.
(b) During the period beginning on the Termination Date and ending
on December 31, 2002 (the "CONSULTING PERIOD"), you shall serve as a consultant
to the Company, reporting exclusively to the Board of Directors of the Company
(the "BOARD") and the acting or actual Chief Executive Officer of the Company
(the "CEO"), on matters related to the Company's emergence from bankruptcy and
the transition to new management of the Company. These duties shall at all times
be commensurate with your status as the former Chairman and Chief Executive
Officer of the Company. Your duties as a consultant shall be performed upon
reasonable advance notice at such times and at such locations as shall
reasonably be acceptable to you and the Board and/or the CEO; PROVIDED, HOWEVER,
that you shall not be required to consult for more than thirty hours (exclusive
of travel) and travel for more than thirty hours in any thirty-day period in the
Consulting Period. For purposes hereof, your consulting time
hereunder shall be measured in increments of two (2) hours, such that, in any
day in which you perform consulting services at the Company's request, your
actual consulting time shall be rounded up to the nearest even whole number of
hours. For example, if you actually consult for a total of three (3) hours in a
given day, your consulting time hereunder would equal four (4) hours for that
day. In addition, in any day in which you travel on Company business for eight
(8) hours or less, but for at least four (4) hours, or in which you are away on
travel from your primary residence, your travel time hereunder shall equal eight
(8) hours for that day. For the avoidance of doubt, in any day in which you
travel for more than eight (8) hours, your travel time hereunder for that day
shall equal your actual travel time. The Consulting Period shall not be extended
without your prior written consent. You shall have no power to bind the Company
in contractual or other matters during the Consulting Period, and you shall not
hold yourself out as having such authority.
(c) In consideration for your services as a consultant hereunder
during the Consulting Period, subject to your not revoking your waiver of rights
under ADEA as described in Section 4 below and your re-executing the U.K.
Agreement and executing the form of release attached as Attachment 3 hereto on
the date the Consulting Period expires, the Company shall pay to you $350,000
(the "CONSULTING FEE") in U.S. dollars in same day funds on January 2, 2003,
unless the Board determines in good faith and after prior notice to you and
opportunity to be heard that you have failed to perform in a material respect
your duties as a consultant. You shall in no event have failed to perform in a
material respect your duties as a consultant unless you have received prompt
notice of and a reasonable opportunity to cure the circumstances on which such
determination is based. Except as specifically provided in this Agreement,
including, without limitation, with respect to the medical insurance coverage
continuation described in Section 2(f) below, during the Consulting Period, you
shall not be paid or provided any compensation or benefits other than the
Consulting Fee.
(d) During the Consulting Period, the Company shall promptly
reimburse you for reasonable costs and expenses incurred by you in the
performance of your duties as a consultant, including, without limitation, for
travel and accommodations in accordance with the Company travel reimbursement
practices applicable to the CEO, subject to the presentation to the Company of
reasonable written documentation of such costs and expenses in accordance with
the Company's policies applicable to such reimbursement, it being understood
that you shall travel first class and be eligible for first class accommodations
unless other rules apply to the CEO, in which case you shall travel business
class except on flights of six hours or longer on which first class travel shall
be permitted. To facilitate your performance of consulting services hereunder,
the Company agrees to purchase airline tickets in connection with such travel
and, upon request, to advance you other reasonable travel costs and expenses.
Aside from travel which you are required to do to perform your duties hereunder,
you shall not incur any expenses hereunder in excess of $1,000 in the aggregate
without first obtaining approval from the Company.
2. SEVERANCE BENEFITS
(a) Your termination of employment hereunder shall be treated as a
termination without Cause under your "Executive Employment Agreement," as
defined in the Plan (hereinafter, the "EMPLOYMENT AGREEMENT"); provided,
however, your right to receive
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payments and benefits as a result of such termination shall only be governed by
the terms of this Agreement and not the Employment Agreement which shall become
null and void on the Termination Date except as specifically provided herein. On
the Termination Date, the Company shall pay to you a severance payment of
$1,000,000 in U.S. dollars in same day funds.
(b) At such time as annual bonuses for the 2002 calendar year would
be payable, if any, you shall be paid your annual bonus for 2002 (the "BONUS"),
provided that you would have received such Bonus in accordance with the terms
and conditions set forth in Section 6.7.4 of the Plan if you had remained
employed with the Company through December 31, 2002, and the Company's
determination whether to make such payment shall be made based on projections
and definitions under such Section 6.7.4 that are no less favorable for you than
for any other "Executive," as defined in the Plan.
(c) The Company shall pay to you on the Termination Date or as soon
as practicable thereafter, but in no event later than ten days after the
Termination Date, in accordance with the policies of the Company as currently in
effect, your accrued, but unpaid compensation under the Employment Agreement,
including accrued and unused vacation, and reimburse your expenses for the
period ending on the Effective Date, in accordance with the Company's expense
reimbursement policy, to the extent not already paid or reimbursed.
(d) The Company shall withhold from any amounts payable under this
Agreement such taxes as may be required to be withheld pursuant to any
applicable law or regulation; PROVIDED that, to the extent that such withholding
is discretionary in the reasonable opinion of the Company, the Company shall
withhold in accordance with past practice.
(e) The Company shall provide you with the tax equalization benefit
under Sections 3(c) and 3(g)(xiii) of the Employment Agreement with respect to
compensation for the period ending prior to the Termination Date, including with
respect to amounts payable under Sections 2(b) and 2(c) above, and in accordance
with past practices and procedures applicable to you. For the avoidance of
doubt, no tax equalization payment shall apply to the severance payment under
Section 2(a) above or the Consulting Fee.
(f) Until such time as you are eligible for comparable coverage or,
if earlier, the date on which you attain age 65, you shall continue to be
covered by the Company's medical, dental and vision insurance in accordance with
the Company's U.S. Expatriate Medical and Pension Policy as currently in effect
(the "HEALTH PLAN"), subject to your payment of 100 percent of the premiums for
such medical, dental and vision insurance coverage at the rate applicable to you
as of the Termination Date. In addition, if you are not eligible for comparable
coverage after you attain age 65 and you were receiving the coverage described
in the previous sentence immediately prior to your attaining age 65, you shall
be entitled to continue such coverage, subject to your payment of 100 percent of
the premiums associated with such coverage after attaining age 65 at the rate
applicable at such time or from time to time. If the Health Plan or the
Company's group health plan is terminated or its benefits are materially
reduced, the Company shall undertake to obtain comparable medical, dental and/or
vision coverage for you until the earlier of the time that you are eligible for
comparable coverage or the date you attain age 65, subject to your insurability
and payment of 100 percent of the premiums applicable to you as of
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the Termination Date for your coverage under the Company's medical, dental
and/or vision insurance.
(g) You shall continue to be covered by the Company's life,
disability and accidental, death and dismemberment insurance, subject to your
continued eligibility for such coverage under the applicable plans and programs
of the Company and your payment of 100 percent of the premiums at the rate
applicable to you from time to time and any costs and expenses of the Company
associated with such coverage.
(h) The Company shall pay to Shearman & Sterling legal expenses up
to $15,000 in connection with the negotiation and preparation hereof and shall
pay, to the extent not already paid, to Glovers Solicitors legal expenses up to
L1,000 plus VAT, in each case, upon presentation of an itemized ▇▇▇▇ specifying
such expenses.
(i) You shall continue to benefit from and be subject to the legal
expense payment provisions in Sections 6.4.1 and 6.4.2 of the Plan.
(j) You shall be entitled to retain the "Retention Payment Amount"
paid under the Employment Agreement.
(k) The Company shall promptly pay relocation costs and expenses up
to $15,000, to the extent actually incurred, in connection with your relocation
from the United Kingdom, subject to the presentation to the Company of
reasonable written documentation of such costs and expenses in accordance with
the applicable policies of the Company.
(l) You shall continue to be covered by the directors and officers
insurance of the Company in the same manner, and to the same extent, as the
active directors and officers of the Company with regard to actions and
inactions while a director and officer of the Company. If the Company elects to
extend and/or continue the directors and officers liability insurance policy of
FLAG Telecom Holdings Limited in effect immediately prior to the Effective Date
for the benefit of the former directors and officers of FLAG Telecom Holdings
Limited generally, then you shall be eligible for the same coverage as such
other directors and officers subject to any generally applicable limitations in
such policy. Your right to any such coverage shall be governed solely by the
terms and conditions of such policy or extension and are in no way guaranteed by
the Company or its affiliates.
(m) You shall be indemnified by the Company in accordance with the
Bye-Laws of the Company as in effect on the Effective Date with respect to acts
or omissions as an officer or director and shall be indemnified for your acts or
omissions in the performance of your duties as a consultant during the
Consulting Period.
(n) Except as specifically provided herein, in the U.K. Agreement,
or as otherwise may be required by law, you shall not be entitled to receive any
other payments, benefits or severance amounts from the Company following the
Termination Date. In the event that you are entitled to additional payments
under applicable law, such amounts shall be offset, dollar for dollar, for any
payments made hereunder.
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3. COVENANTS
(a) You shall continue to be bound by all of the provisions of the
Non-Compete and Proprietary Information Agreement attached as Exhibit B to the
Employment Agreement and incorporated herein by reference, including, without
limitation, the provisions prohibiting competitive activities and the disclosure
of proprietary information and the right of the Company to injunctive relief to
restrain the breach or threatened breach of such obligations or the violation or
threatened violation of such commitments by you or anyone acting on your behalf,
except that you shall not be bound by the provision restricting competitive
activities with respect to competitive activities after the period of
ten-and-one-half months following the Termination Date and, to facilitate your
performance of consulting services hereunder, you shall not be required to
return the Company's computer equipment and telecommunications equipment that
you use during the Consulting Period before the end thereof and you shall
continue to have standard access to the Company's electronic mail and voice mail
systems through the end of the Consulting Period provided that you shall be
subject to any general policies of the Company with respect thereto. For
purposes of that agreement, the term "Employer" shall include the Company.
(b) You shall have reasonable access to the documents, records and
personnel of the Companies to defend against such claims or actions as may be
brought with respect to acts or omissions as an officer or director and in the
performance of your duties as a consultant.
(c) The Company's announcement in connection with its emergence
from bankruptcy shall include a provision in the form attached hereto and
neither you nor any of the Companies shall make any statement inconsistent with
such provision to the public, to the press or to the employees of the Companies.
Nothing in the previous sentence shall preclude you or the Company from
correcting any statement made in contravention thereof, defending or asserting
any legal or equitable action or claim or responding to an administrative or
court order.
4. RELEASE
(a) It is understood and agreed by the parties to this Agreement
that, in consideration of the mutual promises and covenants contained in this
Agreement, and after consultation with counsel, subject to the occurrence of the
Effective Date and a duly authorized resolution by the Board on the Termination
Date in the form attached hereto and subject to the performance by the Company
(except for immaterial inadvertent non-performance which is promptly cured by
the Company) of its obligations hereunder, and except as expressly provided
herein, you, for yourself and each of your respective heirs, executors,
administrators, representatives, agents, successors and assigns (hereinafter
referred to as the "RELEASORS") hereby irrevocably and unconditionally release
and forever discharge the Company, FLAG Telecom Holdings Limited and their
respective subsidiaries and their respective current and former officers,
directors and employees, in each case, in their capacity as such (all such
persons referred to collectively hereinafter as the "COMPANY ENTITIES") from any
and all causes of action, claims, actions, rights, judgments, obligations,
damages, demands, accountings or liabilities of whatever kind or character,
which Releasors may have against the Company Entities from the beginning of the
world and through and including the Termination Date, by reason of the
termination of your employment by the Company or arising out of your right to
bring an action
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against the Company for breach of the Employment Agreement or for discrimination
in employment practices on any basis, including, without limitation, on the
basis of race, color, sex, national origin, ancestry, religion, age, disability,
handicap, medical condition or marital status or under Title VII of the Civil
Rights Act of 1964 (Title VII, as amended), 42 U.S.C. Section 2000, ET SEQ., the
Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. Section 621, ET SEQ.,
Article 15 of the Executive Law of the State of New York (Human Rights Law), the
New York City Human Rights Law or any similar statute relating to discrimination
in employment or the termination of employment.
(b) You understand that this Agreement, and the release contained
herein, waives claims and rights you might have under the ADEA. The waiver of
your rights under the ADEA does not extend to claims or rights that might arise
after the Effective Date. Up and until the seventh day following the Effective
Date, you may revoke the terms of this Agreement relating to ADEA claims by a
written document received by the Company. Since this release is a material
inducement in the Company's willingness to pay the Consulting Fee hereunder, its
obligations to make such payment shall cease upon the receipt of any such notice
of revocation by you. You acknowledge that you have been given up to 21 days to
decide whether to sign this Agreement.
(c) Nothing contained in this Section 4 shall serve as a release by
you or any Releasor with respect to any causes of action, claims, actions,
rights, judgments, obligations, damages, demands, defenses, accountings or
liabilities (i) that may arise under this Agreement, (ii) to which you would
otherwise be entitled under the Plan (unless expressly modified by this
Agreement other than Section 4(a) above) or (iii) that you or any other Releasor
would otherwise be entitled to assert by counter-claim, cross-claim, impleader
or otherwise in connection with any cause of action, claim, action, right,
judgment, obligation, damages, demand, accounting or liability that may be
asserted against you or any other Releasor.
5. RELATIONSHIP TO OTHER AGREEMENTS
Upon the occurrence of the Effective Date and a duly authorized
resolution of the Board on or before the Termination Date substantially in the
form attached hereto, and except as specifically provided herein, this Agreement
and the U.K. Agreement shall constitute the entire agreement of the parties with
regard to the subject matter hereof, contain all the covenants, promises,
representations, warranties and agreements between the parties with respect to
your resignation from the Company and supersede all prior employment or
severance agreements, including any addendum, amendment or agreement thereto,
between you and the Company or any of its predecessors or affiliates,
notwithstanding any survival clauses therein contained. Except as otherwise
provided herein, each party to this Agreement acknowledges that no
representation, inducement, promise or agreement, oral or written, has been made
by either party, or by anyone acting on behalf of either party, which is not
embodied herein, and that no agreement, statement, or promise relating to your
resignation from the Company and the consultancy created hereby, that is not
contained in this Agreement or the U.K. Agreement, shall be valid or binding.
Any modification of this Agreement will be effective only if it is in writing
and signed by the party to be charged. In the event that either the Effective
Date does not occur or the Board does not duly authorize on or before the
Termination Date a resolution substantially in the form attached hereto: (a)
this Agreement shall not have nor have ever had any effect on the
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rights and obligations of the parties hereto, including with respect to the
Employment Agreement, including any addendum, amendment or agreement thereto,
and (b) the Employment Agreement, including any addendum, amendment or agreement
thereto, shall not terminate and shall continue in effect in accordance with the
terms thereof.
6. INDEPENDENT CONTRACTOR
In performing services during the Consulting Period, you at all times
and for all purposes, constitute an independent contractor and not an employee
or agent of the Company or any of its subsidiaries or affiliates. In no event
will you be, or represent yourself to be, an officer, employee or agent of the
Company or any subsidiary or affiliate thereof nor will you bind, or attempt to
bind, the Company or any subsidiary or affiliate thereof to any contract,
agreement, liability or obligation of any nature. Except as specifically
provided in this Agreement, including, without limitation, with respect to the
medical insurance coverage continuation described in Section 2(f) above, the
Company will not be required to provide any benefits to you which it provides to
its employees including without limitation retirement plans, insurance programs
and vacation. In addition, unless otherwise determined by the Company, the
Company shall be under no obligation to withhold any taxes or other amounts to
be paid to you for your service as a consultant.
7. NO WAIVER
No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall (a) be deemed to be a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time or (b) preclude insistence upon strict compliance in the future.
8. SEVERABILITY
If a court of competent jurisdiction determines that any provision of
this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect and such invalid or
unenforceable provision shall be reformulated by such court to preserve the
intent of the parties hereto.
9. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same Agreement.
10. HEADINGS
The paragraph headings have been inserted for purposes of convenience
and shall not be used for interpretive purposes.
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11. ASSIGNMENT
This Agreement is binding on you and the Company and each of you and
the Company's successors and assigns. None of your rights or obligations
hereunder may be assigned by you to any other person or entity, except by will
or the laws of descent and distribution. In the event of your death prior to
receipt by you thereof, the Consulting Fee, the Severance Payment and the Bonus
shall be payable to your designated beneficiaries on the same schedule as
provided for in this Agreement. The rights and obligations of the Company under
this Agreement may only be assigned to a successor to all or substantially all
of the assets of the Company.
12. GOVERNING LAW
This Agreement shall be governed by the laws of the State of New York
applicable to contracts made and performed therein, without regard to its
conflicts of law principles.
13. ACKNOWLEDGMENTS
You acknowledge that:
(a) You have read and understand the terms of this Agreement and
have voluntarily agreed to these terms without coercion or undue persuasion by
the Company or any officer, director or other agent thereof;
(b) You have been encouraged by the Company to seek, and have
sought and received, competent legal counsel in your review and consideration of
this Agreement and its terms; and
(c) This Agreement does not purport to waive, and does not waive,
any rights you may have which arise after the Effective Date.
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* * *
Please indicate your acceptance of these terms by signing and dating
below.
Sincerely,
FLAG Telecom Group Limited
-------------------------
By:
Name:
Title:
-------------------------
▇▇▇▇▇▇ Bande
-------------------------
Date
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ATTACHMENT 1
[FLAG TELECOM LETTERHEAD]
NEWS RELEASE
FLAG TELECOM ANNOUNCES ITS
SUCCESSFUL EMERGENCE FROM CHAPTER 11 WITH ITS NETWORK INTACT
▇▇▇▇▇▇▇▇, BERMUDA - OCTOBER 10, 2002 - FLAG Telecom Holdings Limited
announced today that it has successfully emerged from Chapter 11 proceedings in
the United States. Accordingly, FLAG Telecom's ongoing business operations are
no longer subject to the restrictions imposed by the Chapter 11 process or the
U.S. Bankruptcy Court. The Company, which commenced Chapter 11 proceedings on
April 12, 2002, has been reorganized as FLAG Telecom Group Limited and will
initially trade over the counter under the symbol FLHLQ.
Concurrently, FLAG Telecom announced that it has appointed ▇▇▇▇
▇▇▇▇▇▇▇▇, a member of the Company's newly constituted Board of Directors, to
serve as its new interim Chief Executive Officer, and that it has commenced a
search for a permanent CEO. ▇▇. ▇▇▇▇▇▇▇▇, an industry veteran who served as the
President and CEO of Metromedia Fiber Network, Inc. from 2001 to 2002 and of
UUNet/Worldcom from 1997 to 2000, will replace ▇▇▇▇▇▇ Bande, who has resigned as
Chairman and CEO after five years with FLAG. Mr. Bande will act as an advisor to
the CEO and the Board for the remainder of this year.
Mr. Bande stated "▇▇▇▇ and the new Board bring a wealth of knowledge
and experience to FLAG. I wish ▇▇▇▇, the Board members and FLAG the utmost
success."
"I am pleased to accept this position with FLAG," stated ▇▇. ▇▇▇▇▇▇▇▇.
"On behalf of the Board, I'd like to wish Mr. Bande well in his future
endeavours. I'd also like to thank him and each of the Company's employees, for
their dedication and hard work, which has led to the successful restructuring of
the Company. The Company, with the overwhelming support of its creditors, has
emerged from bankruptcy with a financially sound capital structure and can now
concentrate 100%
10
of its energies on implementing its business plan. We greatly appreciate the
tremendous support of our customers and vendors during the Chapter 11
proceedings and look forward to continuing to regain their confidence."
▇▇. ▇▇▇▇▇▇▇▇ also acknowledged the strengths that the other members of
FLAG Telecom's new Board will provide to the Company, "The depth of their
experiences and their collective knowledge of the telecommunications and
financial industry will be invaluable to FLAG Telecom as it looks to the future
and builds upon its long-standing commitment to its customers, vendors and
employees."
FLAG Telecom's developed global fiber-optic network, which has been
built with network segments and through collaboration with third parties,
remains intact. The FLAG network reaches key high-volume destinations in Europe
and the United States, as well as a number of countries in Asia and the Middle
East, and enables the Company to service its established customer base of over
130 worldwide customers. The Company's principal customers are incumbent
national operators, international licensed telecommunications companies,
emerging telecommunications companies and ISPs.
FLAG Telecom's goal is to establish itself as a leading independent
global transport and network services provider. To meet this end, the Company
intends to continue to enhance the connectivity between its own network and
other networks to enable new customers to readily move traffic onto the FLAG
Telecom global network, to deepen and broaden relationships with its current
customers and to expand the range of its products and services.
# # #
ABOUT FLAG TELECOM
FLAG Telecom is a leading global network services provider and independent
carriers' carrier providing an innovative range of products and services to the
international carrier community, ASPs and ISPs across an international network
platform designed to support the next generation of IP over optical data
networks. Recent news releases and further information are on FLAG Telecom's
website at: ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
FORWARD-LOOKING STATEMENTS
STATEMENTS CONTAINED IN THIS PRESS RELEASE THAT ARE NOT HISTORICAL FACTS MAY BE
"FORWARD-LOOKING" STATEMENTS AS THE TERM IS DEFINED IN THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. TO IDENTIFY THESE FORWARD-LOOKING STATEMENTS LOOK
FOR WORDS LIKE "BELIEVES", "EXPECTS", "MAY", "WILL", "SHOULD", "SEEKS",
"INTENDS", "PLANS", "PROJECTS", "ESTIMATES", OR "ANTICIPATES" AND SIMILAR WORDS
AND PHRASES. THESE, AND ALL FORWARD-LOOKING STATEMENTS, ARE BASED ON CURRENT
EXPECTATIONS AND NECESSARILY ARE SUBJECT TO RISKS AND UNCERTAINTIES WHICH COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CURRENTLY ANTICIPATED DUE
TO A NUMBER OF FACTORS WHICH INCLUDE, BUT ARE NOT LIMITED TO: OUR ABILITY TO
ACHIEVE THE OBJECTIVES LAID OUT IN THE PLAN OF REORGANIZATION. MORE DETAILED
INFORMATION ABOUT THESE RISKS IS CONTAINED IN OUR PLAN OF REORGANIZATION. WE
CAUTION READERS NOT TO RELY ON FORWARD-LOOKING STATEMENTS, AND WE DISCLAIM ANY
INTENT OR OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS.
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ATTACHMENT 2
FLAG TELECOM GROUP LIMITED
UNANIMOUS WRITTEN RESOLUTIONS OF THE BOARD OF DIRECTORS
We, the undersigned, being all of the Directors of FLAG Telecom Group Limited
(the "Company") pursuant to Bye-Law 20 of the Bye-Laws of the Company DO HEREBY
adopt the resolutions set out below.
The effective date of these unanimous written resolutions is the date when the
last person to sign these unanimous written resolutions signs the same. These
unanimous written resolutions may be executed in counterparts and a copy shall
be inserted in the Company's Minute Book. Any action taken herein shall be of
the same force and effect as if adopted at a duly convened meeting of the Board
of Directors of the Company.
1. RESIGNATION AND TERMINATION OF MR. BANDE
It is noted by the Board that ▇▇▇▇▇▇ Bande and the Company have agreed to
the terms of his termination as Chairman and Chief Executive Officer of the
Company and his resignation as a Director of the Company, pursuant to and
in accordance with the terms set forth in that certain Termination
Agreement and Compromise Agreement, each in the form attached hereto
(respectively, the "Termination Agreement" and the "Compromise Agreement")
and that the Company desires to terminate Mr. Bande's employment as
Chairman and Chief Executive Officer pursuant to and in accordance with the
terms of the Termination Agreement and the Compromise Agreement.
It is RESOLVED that:
(i) the form, terms and provisions of the Termination Agreement and the
Compromise Agreement be and they hereby are declared advisable,
authorized, ratified, confirmed and approved in all respects and for
all purposes, with such changes, modifications or other additions
thereto as any Director or Officer of the Company shall approve, with
such approval to be conclusively established by execution thereof by
any such Director or Officer; and
(ii) the termination of ▇▇▇▇▇▇ Bande from the office of Chairman and Chief
Executive Officer of the Company is hereby approved, effective upon the
execution and delivery of the Termination Agreement and the Compromise
Agreement.
2. INTERIM CHIEF EXECUTIVE OFFICER AGREEMENT
It is noted by the Board that the Company desires to enter into that
certain Interim Chief Executive Officer Agreement with ▇▇▇▇▇▇▇▇ Group LP, a
Texas limited partnership, substantially in the form previously submitted
to the Board (the "Interim Chief Executive Officer Agreement"). It is noted
by the Board that ▇▇▇▇ ▇▇▇▇▇▇▇▇ is
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the President of ▇▇▇▇▇▇▇▇ Group LP and as such has an interest declarable
under Section 97 of the Companies ▇▇▇ ▇▇▇▇.
It is RESOLVED that:
(i) the form, terms and provisions of the Interim Chief Executive Officer
Agreement be and they hereby are declared advisable, authorised and
approved in all respects and for all purposes, with such changes,
modifications or other additions thereto as any Director or Officer of
the Company shall approve, with such approval to be conclusively
established by execution thereof by any such Director or Officer;
(ii) the interests of ▇▇▇▇ ▇▇▇▇▇▇▇▇ and any future persons elected or
appointed as a director or officer of the Company who are principals
or employees of ▇▇▇▇▇▇▇▇ Group LP, in any contract involving ▇▇▇▇▇▇▇▇
Group LP be and hereby are noted as declared.
3. EXPENSES
It is RESOLVED that each of the Directors and Officers of the Company are,
and hereby is authorised and directed in the name and on behalf of the
Company to pay from any available funds of the Company all costs, fees and
expenses to be paid by the Company in connection with any of the matters
referred to in these unanimous written resolutions or as such Director or
Officer deems necessary.
4. GENERAL AUTHORISING RESOLUTIONS
It is RESOLVED that all actions previously taken by any Director or Officer
of the Company in connection with any matter referred to in the foregoing
resolutions are hereby approved, ratified and confirmed in all respects and
that the Officers and Directors of the Company, be and each of them hereby
is authorised and directed to do and perform or cause to be done and
performed all such acts, deeds and things and to make, execute and deliver
all such agreements, undertakings, documents, instruments or certificates
in the name and on behalf of the Company or otherwise as each such Officer
or Director may deem necessary or appropriate to effectuate or carry out
fully the purpose and intent of the foregoing resolutions or any of the
transactions contemplated thereby.
13
Affixed below are the signatures of each of the directors.
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14
The signatures above having been affixed, the following signature was affixed
outside the United States.
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Ian Akhurst Date
15
ATTACHMENT 3
FORM OF RELEASE
Reference is made to the Termination Agreement dated October 10, 2002,
by and between FLAG Telecom Group Limited (the "COMPANY") and ▇▇▇▇▇▇ Bande
("YOU") (such Termination Agreement, the "TERMINATION AGREEMENT"). It is
understood and agreed by the parties to the Termination Agreement that, in
consideration of the mutual promises and covenants contained in the Termination
Agreement, and after consultation with counsel, you, for yourself and each of
your respective heirs, executors, administrators, representatives, agents,
successors and assigns (hereinafter referred to as the "RELEASORS") hereby
irrevocably and unconditionally release and forever discharge the Company (as
defined in the Termination Agreement), FLAG Telecom Holdings Limited and their
respective subsidiaries and their respective current and former officers,
directors and employees, in each case, in their capacity as such (all such
persons referred to collectively hereinafter as the "COMPANY ENTITIES") from any
and all causes of action, claims, actions, rights, judgments, obligations,
damages, demands, accountings or liabilities of whatever kind or character,
which Releasors may have against the Company Entities from the Termination Date
(as defined in the Termination Agreement) and through and including the last day
of the Consulting Period (as defined in the Termination Agreement), by reason of
the termination of your employment and/or consultancy by the Company or for
discrimination in employment practices on any basis, including, without
limitation, on the basis of race, color, sex, national origin, ancestry,
religion, age, disability, handicap, medical condition or marital status or
under Title VII of the Civil Rights Act of 1964 (Title VII, as amended), 42
U.S.C. Section 2000, ET SEQ., the Age Discrimination in Employment Act ("ADEA"),
29 U.S.C. Section 621, ET SEQ., Article 15 of the Executive Law of the State of
New York (Human Rights Law), the New York City Human Rights Law or any similar
statute relating to discrimination in employment or the termination of
employment and/or consultancy.
Nothing contained herein shall serve as a release by you or any other
Releasor with respect to any causes of action, claims, actions, rights,
judgments, obligations, damages, demands, defenses, accountings or liabilities
(i) that may arise under the Termination Agreement, (ii) to which you would
otherwise be entitled under the Plan (as defined in the Termination Agreement),
unless expressly modified by the Termination Agreement other than Section 4(a)
thereof, or (iii) that you or any other Releasor would otherwise be entitled to
assert by counter-claim, cross-claim, impleader or otherwise in connection with
any cause of action, claim, action, right, judgment, obligation, damages,
demand, accounting or liability that may be asserted against you or any other
Releasor.
16
ATTACHMENT 4
DATED ______________
FLAG TELECOM GROUP LIMITED
AND
▇▇▇▇▇▇ BANDE
----------------------------------
COMPROMISE AGREEMENT
----------------------------------
Nabarro ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇'▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Tel: ▇▇▇ ▇▇▇▇ ▇▇▇▇
COMPROMISE AGREEMENT
DATED
PARTIES
(1) FLAG TELECOM GROUP LIMITED whose registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇ ("▇▇▇ COMPANY"); and
(2) ▇▇▇▇▇▇ BANDE of ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("THE EXECUTIVE")
WHEREAS
(A) The Executive is employed by the Company as Chairman and Chief Executive
Officer under the terms of an Employment Agreement dated 11 December 1997
(as amended).
(B) The Executive has entered into a termination agreement with the Company
under the laws of the State of New York ("THE US TERMINATION AGREEMENT")
with effect from the date hereof.
(C) It has been mutually agreed between the Company and the Executive that his
employment will end on the following terms and conditions.
IT IS AGREED AS FOLLOWS:
1. The Executive's employment will be terminated with effect from 10 October
2002 ("THE TERMINATION DATE").
2. By way of compensation for the termination of the Executive's employment
with the Company and in consideration of the Executive's compliance with
his obligations hereunder the Company will:-
2.1 make to the Executive within seven days of the Termination Date a
payment of L100 less such sums as the Company is obliged by law to
deduct by way of tax and National Insurance;
2.2 pay the Executive's reasonable legal fees for the purposes of
obtaining advice in respect of signing this agreement only up to a
maximum payment of L1000 (plus VAT) directly to his solicitors,
Glovers of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, in accordance with Inland
Revenue Extra Statutory Concession A81, following receipt by the
Company of an itemised invoice.
3. The Executive confirms that he will return forthwith to the Company or its
authorised representative all property including (but without limitation)
all documents, keys, correspondence, discs, tapes, credit cards, security
pass, computer, computer peripherals, communications equipment, or any
other equipment, items or software, electronic documents, data files or
information in his possession or under his control which relate in any way
to the business or affairs of the Company or any other member of the Group
and all copies thereof regardless of the medium on which any such
information or copies are held or stored SAVE THAT the Executive shall not
be required to return the Company's computer and telecommunications
equipment until the expiry of the Consulting Period as provided for in
paragraph 3(a) of the US Termination Agreement. In respect of any such
items or information held on any computer or other equipment belonging to
the Executive, he hereby undertakes to delete such items and information
and all copies forthwith.
4. Subject to the terms of the US Termination Agreement, the Executive hereby
accepts and acknowledges that the sums payable and benefits provided to him
under clause 2 are paid by the Company in full and final settlement of all
claims and complaints arising under UK statute or under the treaties
establishing the European Union or any legislation or judgments issued
pursuant thereto as particularised in clause 5 below which he may have
against the Company or any other member of the Group arising out of or in
connection with his employment with the Company and/or its termination.
This clause shall not apply to any pension rights or pension benefits which
have accrued to the Executive up to the Termination Date or to any personal
injury claims relating to the Executive PROVIDED THAT in signing this
Agreement the Executive warrants to the Company that he is not presently
aware of any injury or illness which may give rise to such a claim.
5. For the purposes of Section 203 of the Employment Rights Act 1996
(including any rights under the Part-time Workers (Prevention of Less
Favourable Treatment) Regulations 2000 and the Fixed-Term Employees
(Prevention of Less Favourable Treatment) Regulations 2002) ("ERA"),
Section 77 of the Sex Discrimination ▇▇▇ ▇▇▇▇ ("SDA"), Section 72 of the
Race Relations ▇▇▇ ▇▇▇▇ ("RRA"), Section 9 of the Disability Discrimination
▇▇▇ ▇▇▇▇ ("DDA"), Section 288 of the Trade Union and Labour Relations
(Consolidation) ▇▇▇ ▇▇▇▇ ("TULR(C)A"), Section 49 of the National Minimum
Wage ▇▇▇ ▇▇▇▇ ("NMWA") and Regulation 35(3) of the Working Time Regulations
1998 ("WTR") the Executive hereby warrants and agrees that:
5.1 by entering into and accepting the arrangements set out in this
Agreement, he agrees that he has not and will not present any
complaint to the employment tribunals or any court or tribunal whether
on the grounds that he has been unfairly dismissed or subjected to any
form of discrimination by the Company or otherwise and that he has no
claim for equal pay or under the ERA, RRA, SDA, DDA, TULR(C)A, NMWA
and/or WTR and agrees in any event that the arrangements in this
Agreement are intended to compromise such complaints; and
5.2 he has received independent legal advice as to the terms and effects
of this Agreement, in particular as to its effect on his ability to
pursue his rights or any claim that he might have before the
employment tribunals or any court or tribunal including but without
limitation before the European Court of Justice or the European Court
of Human Rights, from ▇▇▇▇▇▇ ▇▇▇▇▇▇ of Glovers who is a solicitor of
the Supreme Court holding a current practising certificate; and
5.3 that the conditions relating to compromise agreements under the ERA
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇(▇)▇, ▇▇▇▇ and/or WTR are satisfied.
6. Glovers by signing a letter in the form attached as Schedule 1 warrants to
the Company that the statements in paragraphs 5.2 and 5.3 above are true
and correct and also that Glovers holds appropriate insurance cover as
required by Section ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇, ▇▇▇▇▇▇▇ 72 RRA, Section 9 DDA,
Section 288 TULR(C)A, Section 49 NMWA and Regulation 35(3) of the WTR.
7. The Executive undertakes that he will not (except as authorised by the
Company or as obliged by law) reveal to any person firm or company or use
for his own benefit any information concerning the business, accounts or
finances of the Company or any other member of the Group or any of the
trade secrets secret or confidential operations processes or dealings or
affairs of the Company or any other member of the Group which may have come
to his knowledge during his employment with the Company or any other member
of the Group or previously or otherwise. This restriction shall apply
without limit in point of time but shall cease to apply to information or
knowledge which may come into the public domain other than through the
default of the Executive or to information or knowledge which the Executive
is required by law to disclose.
2
8. The parties hereby agree that the terms of this Agreement are confidential
and that neither party will disclose the contents hereof without the other
party's consent except to their professional advisers, the Inland Revenue,
the Department for Work and Pensions, or as otherwise required by law.
9. For the avoidance of doubt, nothing in this agreement shall affect the
rights of either party pursuant to the US Termination Agreement.
10. For the purposes of this Agreement: "member of the Group" means any holding
company from time to time of the Company and any company which is a
subsidiary of either of them (as defined in Section 736 of the Companies
▇▇▇ ▇▇▇▇ or any re-enactment thereof) or any associated company twenty per
cent or more of the equity share capital of which is owned directly or
indirectly by the Company (applying the provisions of Section 838 of the
Income and Corporation Taxes Act 1988) or any re-enactment thereof.
11. This Agreement will be governed by and construed in accordance with the
laws of England and Wales and the parties hereby submit to the exclusive
jurisdiction of the Courts of England and Wales except that this Agreement
may be enforced in any court of competent jurisdiction.
IN WITNESS hereof the parties have entered into this Agreement on the date and
year set out above
Signed for and on behalf of )
FLAG TELECOM GROUP LIMITED )
Signed and delivered as a deed by )
▇▇▇▇▇▇ BANDE in the )
presence of the witness named below: )
Signature of Witness:
Name of Witness:
Address:
3
SCHEDULE 1
[Law Firm Letterhead]
TO The Directors
Flag Telecom Group Limited
Date:
Dear Sirs
▇▇▇▇▇▇ BANDE ("Mr Bande")
We refer to the terms of the Compromise Agreement between Mr Bande, our client,
and your Company.
We hereby certify that:
1. ▇▇▇▇▇▇ ▇▇▇▇▇▇ is a solicitor of the Supreme Court of England and Wales
holding a current practising certificate and he has advised Mr Bande as to
the terms and effect of the Compromise Agreement.
2. This firm is not acting (and has not acted) for your Company or any member
of its Group nor is it connected in any way with your Company or any member
of the Group in a manner which prevents it from giving independent legal
advice in relation to this matter.
3. There is in force a policy of insurance covering any possible claim by Mr
Bande in respect of loss arising in consequence of the advice given upon
the Compromise Agreement.
4. The conditions contained in Section 203 of the Employment Rights ▇▇▇ ▇▇▇▇,
Section 77 of the Sex Discrimination ▇▇▇ ▇▇▇▇, Section 72 of the Race
Relations ▇▇▇ ▇▇▇▇, Section 9 of the Disability Discrimination ▇▇▇ ▇▇▇▇,
Section 288 of the Trade Union and Labour Relations (Consolidation) ▇▇▇
▇▇▇▇, Section 49 National Minimum Wage ▇▇▇ ▇▇▇▇ and Regulation 35(3) of the
Working Time Regulations 1998 are satisfied.
Yours faithfully
[Glovers]
1
