EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Agreement, dated as of 10th June 2003, by and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Employee") of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and FLAG TELECOM GROUP
LIMITED (the "Company") whose registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇.
In consideration of the premises and mutual covenants set forth below, the
parties hereby agree as follows:
In this Agreement the "Board" means the Board of Directors from time to time of
the Company.
"Associated Company" means a company, which from time to time is a subsidiary or
a holding company of the Company or a subsidiary (other than the Company) of a
holding company of the Company. In this definition "subsidiary" and "holding
company" have the same meanings as in Section 736 of the Companies ▇▇▇ ▇▇▇▇, as
originally enacted.
"Change of Control" means the occurrence of one of the following events:
any "person" or "group" becomes the "beneficial owner" (as such terms are used
in Rule 13d-3 promulgated under the Security Exchange Act of 1934, as amended,
except that a person or group shall be deemed to have "beneficial ownership" of
all securities that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of 51% or more of the Common Stock (as defined below); provided,
however, that an event described in this paragraph (i) shall not be deemed to be
a Change in Control if any of following becomes such a beneficial owner: (A) any
tax-qualified, broad-based employee benefit plan sponsored or maintained by the
Company or any majority-owned subsidiary, (B) any underwriter temporarily
holding securities pursuant to an offering of such securities, or (C) any person
or group pursuant to a Non-Qualifying Transaction (as defined below); or
the Company amalgamates or otherwise consolidates or merges with any other
corporation or sells, assigns, conveys, transfers, leases or otherwise disposes
of all or substantially all of its assets and/or procures such sale or other
disposition of the assets of the Company's direct and indirect subsidiaries (on
a consolidated basis) to any other person or group, in either one transaction or
a series of related transactions which occur within six months, other than an
amalgamation or disposition of assets: (A) of or by the Company and/or its
subsidiaries into or to a 100% owned subsidiary of the Company, or (B) pursuant
to a transaction in which the issued Common Stock are exchanged for securities
or other property with the effect that the beneficial owners of the issued
Common Stock immediately prior to such transaction, beneficially own, directly
or indirectly, at least a majority of the issued shares or stock (measured by
voting power rather than number of shares) of the amalgamated corporation or the
person or group to whom the Company's (and/or its subsidiaries') assets are
transferred immediately following such transaction (any transaction which
satisfies the criteria specified in (A) or (B) above shall be deemed to be a
"Non-Qualifying Transaction");
"Common Stock" means the common shares of the Company, $1.00 par value per
share.
1. JOB AND RESPONSIBILITIES AND PLACE OF EMPLOYMENT.
The Company shall employ you in the post of Chief Financial Officer ("CFO") and
as a member of the executive management team of the Company and you shall report
to the Chief Executive Officer.
You shall exercise such duties in relation to the business of the Company as may
from time to time be vested in or assigned to you by the Company. The Company
reserves the right at any time during your employment, upon reasonable notice,
to require you to undertake any duties which fall within your capabilities.
Your principal place of employment is London, United Kingdom; PROVIDED, THAT,
during the continuance of your employment with the Company you may be required
to travel to such places (whether in or outside the United Kingdom) and in such
manner and on such occasion as the Company may from time to time decide.
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2. TERM OF APPOINTMENT
Subject to Clause 11, the period of employment under this Agreement shall be for
a minimum period of one (1) year from 10 June 2003 (the "Minimum Period").
Thereafter, either party in accordance with Clause 11 can terminate this
agreement.
3. REMUNERATION
3.1 BASIC SALARY. You will be paid a basic salary of GBPL240,000 per annum
payable monthly in arrears each calendar month subject to normal deductions of
tax and national insurance in respect of the fulfillment of your duties as CFO.
This salary will be paid by direct credit transfer to your personal bank. It
will be your responsibility to ensure that the accounts department has a note of
your Bank, Bank Account Number and Sort Code Number.
Your salary will be reviewed annually for possible increase and any changes will
be at the entire discretion of the Company. The Company is not obliged to
increase your salary following such reviews.
3.2 TARGET BONUS. You will also be eligible to receive a bonus targeted at
70% of basic salary. This Target Bonus will be pro rated for part years worked,
including without limitation, the first and last years of your employment. Bonus
earnings will be determined by the Chief Executive Officer, based on your
performance against specific objectives. It will be possible to exceed the
target bonus amount. Bonus will be paid normally in January of the following
year, but not later than 31 March of that year. Should this Agreement be
terminated, then the bonus earned but not yet paid before the termination date
remains payable whether or not you are no longer employed or under notice.
An itemized pay statement of your earnings and deductions will be sent to you at
the end of each month.
3.3 STOCK OPTIONS. You will be granted options under the Company's Stock
Incentive Plan ("Plan") in respect of 8000 ordinary shares in the Company. 2667
shares will vest on the first anniversary of the date of grant, with a further
2667 shares vesting on the second anniversary of the date of grant and the
remaining 2666 shares vesting on the third anniversary of the date of grant.
Options will be granted on the first day of the first calendar month of
employment with an exercise price equal to the closing price of the previous
day's public trading. This award will be subject to the rules of the Plan, UK
Sub-Plan and the attached Option Agreement.
3.4 CAR ALLOWANCE. You shall also be entitled to a cash car allowance of
GBPL10,000 net of all UK taxes per annum payable in equal installments monthly
in arrears each calendar month. This will be paid by the Company along with your
monthly salary. For the avoidance of doubt, the cash car allowance is a
contractual allowance and not part of your basic salary for purposes of Clause
11 of this Agreement.
3.5 The Company will provide you at no charge with home office facilities,
such as fax, mobile phone and a blackberry or a similar device, to allow you to
perform your duties for FLAG outside the FLAG offices.
3.6 PENSION. You have agreed to waive your right to pension contributions
and your projected pension payments have been consolidated into your
remuneration package.
3.7 JOINING BONUS. The Company shall pay to you on commencement of
employment a one-off Joining Bonus of L121,500 (before deductions for tax and
national insurance contributions). The Joining Bonus is to compensate you for
the guaranteed bonus that you will forfeit. Should you receive any bonus payment
from your previous employer - whether in full or in part - you must repay to the
Company the same amount up to a maximum of L121,500. In the event that you
leave the Company's employment before the first anniversary of the commencement
of your employment, other than for dismissal without Cause or resignation with
Good Reason, you must immediately repay to the Company the full amount of the
Joining Bonus (save for any amount already repaid pursuant to this clause).
3.8 RE-IMBURSEMENT OF REPAID RELOCATION COSTS. The Company shall reimburse
for any relocation costs that you are asked to repay as a result of leaving the
employment of your current employer up to a maximum amount of US$75,000.
3.9 GUARANTEED BONUS. The Company will pay to you on 1 January 2004 a
Guaranteed Bonus of L85,000 (before deductions for tax and national insurance
contributions). In the event that you leave the Company's employment before the
third anniversary of the commencement of your employment, other than for
dismissal without Cause or resignation with Good Reason, you must immediately
repay to the Company the full amount of the Guaranteed Bonus
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3.10 ADDITIONAL BENEFITS. You shall be entitled to the following additional
benefits:
(a) Tax Advice. Subject to the provision of valid receipts, the Company
shall pay for all reasonable costs incurred by you in obtaining the tax
advice necessary to enable you to complete your tax returns for 2003 and
2004 in the United States of America and the United Kingdom.
(b) Flights. Subject to the provision of valid receipts, the Company shall
reimburse you for an amount of up to L20,000 per year for flights for
you and your dependants to travel between USA and UK.
(c) Visa/Work Permit Arrangements. The Company shall apply for and pay for
your Visa and/or Work Permit in the UK as required for the duration of
your employment with the Company.
(d) Relocation. The Company will:
(i) meet all reasonable costs incurred in the engagement of an agent
to arrange your relocation to the United Kingdom;
(ii) meet all reasonable costs incurred in selling the property at
[6332 Rutgers Street, Houston, Texas 77005], including the
payment of any loss incurred on the sale of that property;
(iii) meet all reasonable shipping, storage and removal costs involved
in your relocation to the United Kingdom (including all
reasonable costs incurred in the quarantine of your cat);
(iv) meet all reasonable costs incurred in the provision of any
temporary housing in London for the period that the property at
[6332 Rutgers Street, Houston, Texas 77005] is being sold;
(v) in the event that you purchase a property in London during the
performance of your duties make a payment to you of up to
L25,000 (after deductions in respect of tax and National
Insurance contributions) towards the purchase by you of such a
property.
In the event that you leave the Company's employment before the first
anniversary of the commencement of your employment, other than for dismissal
without Cause or resignation with Good Reason, you must immediately repay to the
Company all the relocation costs set out in Clause 3.10 (d) above.
4. EXPENSES
In the event that you incur any expense directly in the performance of your
duties, the Company will reimburse such reasonable expenses, including air
travel, subject to production by you of satisfactory evidence in accordance with
the Company's Expenses policies, as in force from time to time.
5. HOURS OF WORK
There are no normal working hours for this employment and you will be required
to work such hours and at such times as the Company reasonably considers
necessary to meet the needs of the business and the efficient discharge of your
duties.
6. SICKNESS OR INJURY
If you are absent from work due to illness or injury and you have carried out
your responsibilities regarding notification of your absence, you will be
entitled to sick pay. This will be continued payment of your normal salary (such
payment to be inclusive of Statutory Sick Pay or social security benefits to
which you may be entitled) for a total of up to 26 in any 52 consecutive weeks
of employment under this Agreement.
The Company may at its entire discretion require you to undergo a medical
examination by a doctor of the Company's choice at its expense.
You authorize the doctor to disclose to the Company the results of the
examination and discuss with it any matters arising from the examination as
might impair you in properly discharging your duties.
7. INSURANCES
The Company will provide cover for you and your dependants in respect of private
health insurance, dental insurance, vision insurance and life insurance through
CIGNA International (in accordance with the policy
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document which has already been sent to you) and other insurances in accordance
with the Company's normal insurance policies.
8. HEALTH AND SAFETY
You are expected to comply with the Company regulations concerning health and
safety at work.
9. PROPRIETARY INFORMATION
Information that is furnished to you under this Agreement or that you come into
contact with on the Company's premises or on the premises of any relevant
Associated Company or under the Company's or any such relevant Associated
Company's control ("Proprietary Information"), shall remain the property of the
Company or the relevant Associated Company. All copies of Proprietary
Information in written, graphic or other tangible form shall be returned to the
Company at its request. Unless such Proprietary Information was previously known
to you free of any obligation to keep it confidential, or has been or is
subsequently made public by the Company, or a third party without breach of any
agreement, it shall be kept confidential by you and such information shall be
used only in performing services under this Agreement, and may not be used or
disclosed to any other person, entity or for other purposes except upon such
terms as may be agreed upon between yourself and the Company in writing. The
Company may require you to sign a separate written agreement protecting the
Proprietary Information.
10. HOLIDAYS
Your vacation entitlement will be twenty-five (25) days per year (pro-rata for
part years).
11. TERMINATION OF EMPLOYMENT
Notwithstanding the Minimum Period or any successive period, your employment
hereunder may be terminated under the following circumstances:
11.1 DEATH. Your employment hereunder shall terminate upon your death. On
such termination, the Company will not pay any further salary, allowances or
benefits to you other than your entitlement under any Company benefit plan.
11.2 DISABILITY. If you shall be or become incapacitated from any cause
whatsoever from efficiently performing your duties hereunder for six (6)
consecutive months or for twenty-six (26) weeks in the aggregate in any period
of fifty-two (52) consecutive weeks, the Company shall have the right to
terminate your employment hereunder for "Disability" and such termination in and
of itself shall not be, nor shall it be deemed to be, a breach of this
Agreement. Without prejudice to any other right under this Agreement (including,
without limitation, under sub-clauses 11.1, 11.3, 11.4, 11.5, 11.6 and 11.7) to
terminate your employment, the Company will not exercise its right under this
sub-clause 11.2 to terminate your employment for Disability if to do so would
prejudice your benefits under the Company's permanent disability plan. On such
termination, or in the event referred to in the last sentence, the Company will
not pay any further salary, allowances or benefits to you other than your
entitlement under any Company benefit plan.
11.3 CAUSE. The Company shall have the right to terminate your employment for
Cause and such termination in and of itself shall not be, nor shall it be deemed
to be, a breach of this Agreement. For purposes of this Agreement, the Company
shall have "Cause" to terminate your employment upon your:
(a) Willful misconduct, wrongdoing, fraud, theft, embezzlement or
dishonesty, whether committed before or after the date of
employment, if such conduct could reasonably damage the Company
or an Associated Company economically or damage its reputation;
or
(b) commission of, indictment (or similar legal process) with a
reasonable prospect of conviction for, conviction of or plea of
guilty or no contest to any crime (other than minor traffic
violations); or
(c) habitual drug or alcohol abuse; or
(d) refusal or neglect to comply with any lawful orders given to you
by the CEO and/or majority of the Board of the Company; or
(e) breach of any material term of this Agreement.
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You will be provided with written notice by the Chief Executive Officer and
given fourteen (14) days to explain the alleged conduct or cure (if curable) any
of the events which could lead to your termination for Cause. The Company may,
in its sole discretion, suspend your employment during such notice period and
such action shall in no way give you Good Reason to terminate this Agreement. If
the Chief Executive Officer finds that your explanation is unsatisfactory or you
do not cure the alleged conduct, then the Company shall be entitled to terminate
forthwith your employment under this Agreement. On such termination, the Company
will not pay any further salary, allowances or benefits to you other than your
entitlement under any Company benefit plan.
Any delay or forbearance by the Company in exercising any right of termination
shall not constitute a waiver of it.
11.4 GOOD REASON. You shall be entitled to terminate your employment for
"Good Reason" in the event of:
(a) the Company or any Associated Company diminishing your position with the
Company as set forth in Clause 1 of this Agreement, or materially
diminishing your responsibilities, or requiring you to report to a
person or entity other than the Chief Executive Officer; and/or
(b) the Company or any Associated Company breaching any material term of
this Agreement; and/or
(c) a Change of Control, following which no suitable alternative position is
offered to you.
In the event that you seek to terminate your employment pursuant to this
Clause 11.4, you shall provide the Company with written notice of the specific
reasons for such termination within ninety (90) days of having knowledge of the
event that is the basis for such termination and affording the Company thirty
(30) days to rectify the alleged complaint. Upon your providing such notice, the
Company may, in its discretion, waive the ninety (90) day notice period and
immediately terminate your employment.
If you terminate your employment for Good Reason, the Company shall pay you a
sum equal to two years' worth of your basic salary, subject to all necessary
deductions. For the avoidance of doubt, any entitlement in respect of
Clause 11.6, or in respect of your service during any unexpired minimum term or
notice period, shall not apply where you are entitled to the sum in this clause.
11.5 WITHOUT GOOD REASON. After the Minimum Period, you may terminate your
employment without Good Reason by providing six (6) months' written notice to
the Company. On such termination the Company will not pay any further salary,
allowances or benefits to you other than your entitlement under any Company
benefit plan. Upon providing such notice, the Company may immediately suspend
your employment with pay and/or assign you to other executive duties and such
action shall in no way give you Good Reason to terminate your employment.
11.6 WITHOUT CAUSE. After the Minimum Period, the Company may terminate your
employment at any time without Cause by providing you with a notice of
termination and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement. In the event of such termination, the
Company shall pay to you, subject to all necessary deductions, a sum equal to
two years' worth of your basic salary.
11.7 VESTING OF SHARES. Should your employment terminate with Good Reason, in
accordance with clause 11.4 or Without Cause in accordance with clause 11.6 the
Company agrees that unvested options held by you pursuant to clause 3.3 shall
vest immediately and the Company shall the bear all reasonable costs associated
with your return to the US.
11.8 EXPIRATION OF TERM. Your employment shall automatically terminate upon
expiration of the period of employment and such termination shall not be a
breach of this Agreement.
12. RULES, POLICIES, PROCEDURES, GRIEVANCES AND DISCIPLINE
It is understood that you will be subject to all appropriate Company policies
and procedures in force from time to time. You will also be subject to the
Company's disciplinary rules and procedures set out in the Employee Handbook, as
amended from time to time. In case of any conflict or inconsistency between
these policies, procedures and rules on the one hand and this Agreement, on the
other hand, this Agreement shall prevail.
13. REPRESENTATIONS/CONFLICT OF INTEREST
You represent and warrant to the Company that you are free to undertake the
obligations required by this Agreement and that there is no conflict of interest
between your performance of this Agreement and any other obligation you may have
to other parties. You acknowledge that the Company has relied upon such
representations as a material inducement to entering into this Agreement with
you.
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The Company has agreed that you may continue in your role as a non-executive
director of Vimpplecom provided that in the event of there being a conflict of
interest the Company reserves the right to require you to resign from this
position.
If it is finally determined that due to a breach of the representation in the
immediately preceding paragraph that you are precluded from performing your
obligations hereunder, the Company shall have the right to terminate your
employment for Cause in accordance with clause 11.3.
14. GOVERNMENT LAWS AND REGULATIONS
You agree, to the best of your ability, to comply with all applicable laws of
the jurisdictions in which services are performed under this Agreement. You also
agree to comply with all USA federal, state or local laws, and regulations
applicable to the Company as a publicly traded entity in the USA, including, but
not limited to, all applicable requirements of the US Foreign Corrupt Practices
Act of 1977, as amended. Without limiting the generality of the foregoing
obligations, you will not use any part of the compensation paid pursuant to this
Agreement to make any payment or gift directly or indirectly to any employee,
officer or representative of any foreign government, political party or
candidate for political office under circumstances in which such payment could
constitute a bribe, kickback or illegal payment under applicable USA or
applicable non-USA laws. You agree that any violation of such applicable USA
laws by you shall entitle the Company to terminate this Agreement in accordance
with clause 11.3. You agree that you will not, in connection with the
performance of services hereunder, discriminate against any person on account of
race, color, religion, sex or national origin.
15. MISCELLANEOUS
Any amendments to this agreement will be agreed upon with you in writing.
There are no collective agreements, which directly affect the terms and
conditions set out in this Agreement.
Any notice may be given to you personally or to the Company Secretary (as the
case may be) or may be posted to the Company (for the attention of its
Secretary) at its registered office for the time being or to you either at your
address given above or at your last known address. Any such notice shall be
deemed served 48 hours after it was posted and in proving such notice it shall
be sufficient to prove that the notice was properly addressed and put in the
post.
All payments hereunder shall be subject to any required withholding of tax and
national insurance pursuant to any applicable law or regulation.
Your rights and benefits hereunder shall not be assignable, whether by voluntary
or involuntary assignment or transfer by you. This Agreement shall be binding
upon, and inure to the benefit of, the successors and assigns of the Company,
and your heirs, executors and administrators, and shall be assignable by the
Company to any entity acquiring substantially all of the assets of the Company,
whether by merger, consolidation, sale of assets or similar transactions.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.
The section headings in this Agreement are for convenience of reference only,
and they form no part of this Agreement and shall not affect its interpretation.
This Agreement shall be governed by and construed under laws of England and
Wales and each of the parties hereby irrevocably agrees for the exclusive
benefit of the Company that the Courts of England and Wales are to have
jurisdiction to settle any disputes which may arise out of or in connection with
this Agreement.
Signed s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10th June 2003
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For and on Behalf of FLAG Telecom Group Limited Date
I have read, understood and accept the Terms and 10th June 2003
Conditions of Employment as stated and referred to ------------------------
in this document.
Signed s/▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Date
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