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EXHIBIT 10.6
EMPLOYEE BENEFITS AGREEMENT
EMPLOYEE BENEFITS AGREEMENT (the "Agreement"), dated as of
_________, 1999, between Global TeleSystems Group, Inc., a Delaware corporation
("GTS"), and Golden Telecom, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, GTS is engaged in the telecommunications business
which, in part, includes telecommunications business in Russia and other
countries of the Commonwealth of Independent States (the "Business");
WHEREAS, GTS has caused the Company to be organized as a new
corporation to operate the Business, and to receive certain assets and
liabilities associated therewith;
WHEREAS, The Company desires and GTS has agreed that GTS shall
provide employee benefits to the employees of the Company until the time that
the Company is prepared to sponsor its own benefits plans and programs;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements and covenants contained herein, the parties hereto agree as
follows:
SECTION 1. Certain Defined Terms. The following terms shall
have the meanings defined for such terms in the Sections of this Agreement set
forth below:
"Separation Date" means such date as is mutually agreed in
writing by the parties hereto which shall be the date as of which GTS ceases to
provide benefits to the Transferred Employees under this Agreement.
"Transferred Employees" means all (a) expatriate employees of
the Business who become employees of the Company as of the Effective Date and
(b) other employees of GTS who become employees of the Company as of the
Effective Date pursuant to the mutual agreement of GTS and the Company.
SECTION 2. General Employment Matters. (a) As of the date of
this Agreement (the "Effective Date"), all Transferred Employees shall become
employed by the Company. Nothing in this Agreement shall give any Transferred
Employee any right to continued employment with the Company or GTS beyond the
Effective Date.
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(b) As of the Effective Date, the Transferred Employees
will participate in each of the employee benefit plans (including all
retirement plans and welfare benefit plans) which, immediately prior to the
Effective Date, cover the Transferred Employees (collectively, the "GTS Benefit
Plans").
(c) GTS shall take any steps necessary, including
without limitation, the amendment of the GTS Benefit Plans, to ensure that the
terms of this Section 2 may be carried out. In the event that, for any reason,
the Transferred Employees are not eligible to participate in any GTS Benefit
Plan, as of the Effective Date, GTS shall otherwise provide substantially
equivalent benefits to those that are unavailable through such GTS Benefit Plan
to the Transferred Employees.
(d) GTS shall take all necessary action to ensure that
the Company will be designated a "successor employer" for purposes of the GTS
Benefit Plans, in order that the Transferred Employees will not be deemed to
have had a separation of service from GTS or a termination of employment from
GTS merely because they are transferred to the Company.
(e) As of the Separation Date the Transferred Employees
shall cease to participate in the GTS Benefit Plans. Except as otherwise
provided in this Agreement, as of the Separation Date the Company shall
establish "mirror" plans that will provide the same level of benefits (as in
effect immediately prior to the Separation Date) for the Transferred Employees
and their eligible dependents and beneficiaries as those provided under the GTS
Benefit Plans.
(f) Effective as of the Separation Date, Transferred
Employees shall no longer participate in the [name of GTS 401(k) Plan], (the
"401(k) Plan"). Effective as of the Separation Date, the Company shall
establish pursuant to Section 2(e) above a "mirror" defined contribution plan
intended to be qualified under Sections 401(a) and 401(k) of the Internal
Revenue Code of 1986, as amended (the "Code"), and related trusts intended to
be exempt from taxation under Section 501(a) of the Code. As soon as
practicable following the Separation Date, GTS shall cause to be transferred
from the 401(k) Plan to such defined contribution plan and related trust, as
the Company shall direct, assets equal to the account balances as of the
Effective Date of the Transferred Employees who participate in the 401(k) Plan
(with subsequent "true up" adjustment, if necessary). If necessary, GTS shall
amend the 401(k) Plan to fully vest accounts of all Transferred Employees as of
the Separation Date.
(g) In connection with all employee pension benefit plans
and employee welfare benefit plans to be established by the Company pursuant to
this Agreement, the Company shall credit Transferred Employees for all periods
of service with GTS prior to the Effective Date for all purposes, to the same
extent that such service was credited under the applicable GTS Benefit Plan.
In addition, any welfare plan that the Company establishes hereto shall take
account of amounts credited against deductibles for 1999 prior to the
Separation Date under the corresponding GTS Benefit Plan, as well as of
amounts charged against out-of-pocket or other
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annual or other (including lifetime) limitations under the corresponding GTS
Benefit Plan prior to the Separation Date. The Company will cause the waiver
of any waiting periods or pre-existing condition limitations or exclusions that
otherwise might apply to Transferred Employees (or their eligible dependents or
beneficiaries) under the terms of the "mirror" plans established pursuant to
Section 2(e) or Section 2(f), to the extent that such periods, limitations or
exclusions would not have applied to the Transferred Employees (and their
eligible dependents and beneficiaries) had they continued to participate in the
GTS Benefit Plans after the Separation Date.
(h) From the Effective Date until the Separation Date,
GTS shall provide, or shall cause one or more of its divisions to provide, to
the Company the services related to the provision of benefits to the
Transferred Employees under the GTS Benefit Plans, including, without
limitation, any disclosure, reporting and other administrative requirements.
SECTION 3. Payments to GTS. Beginning on the Effective Date
and continuing until the Separation Date, the Company shall pay to GTS as
consideration for providing the Transferred Employees with the benefits
associated with the GTS Benefit Plans and the Related Services, a management
fee equal to 25% of the aggregate amount of all Transferred Employees' base
salary, as in effect from time to time (the "Management Fee"). The Management
Fee shall be paid to GTS in monthly installments as soon as practicable after
the last pay period for each month.
SECTION 4. General Matters. Except as otherwise expressly
provided herein, the Company shall be responsible for any and all employment,
compensation and benefit liabilities with respect to all Transferred Employees
(including but not limited to Transferred Employees who, as of the Separation
Date, are on leave of absence, long-term disability, short-term disability or
layoff with recall rights) and eligible dependents and beneficiaries of those
persons.
SECTION 5. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
applicable to contracts executed in and to be performed entirely within that
state.
SECTION 6. Headings. The article and section headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 7. Entire Agreement. This Agreement embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein and therein and supersede all prior agreements
and understandings between the parties with respect to the subject matter
hereof and thereof.
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SECTION 8. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 9. Assignment. This Agreement or any rights or
obligations arising hereunder may not be assigned without the express written
consent of GTS and the Company (which consent may be granted or withheld in the
sole discretion of GTS and the Company).
SECTION 10. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument and shall become a
binding Agreement when one or more of the counterparts have been signed by each
of the parties and delivered to the other party.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
GLOBAL TELESYSTEMS GROUP, INC.
By:
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Name:
Title:
GOLDEN TELECOM, INC.
By:
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Name:
Title: