EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This Agreement is made as of October 15, 2002 by and between Cablecom
GmbH (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇ (the "Executive").
1. Duties and Scope of Employment.
(a) Positions; Duties. During the Employment Term (as defined in Section
2), the Company shall employ Executive as the Company's Chief Executive
Officer. In such capacity, Executive shall be located in Paris, France, unless
and until the Board of Directors of the Company (the "Board") asks Executive
to be located in Zurich, Switzerland. During the Employment Term, Executive
shall report directly to the Board.
(b) Obligations. During the Employment Term, Executive shall devote
substantially all of his business efforts and time to the Company. Executive
agrees, during the Employment Term, not to actively engage in any other
employment, occupation or consulting activity for any direct or indirect
remuneration without the prior approval of the Board; provided, however, that
Executive may (i) serve in any capacity with any professional, community,
industry, civic, educational or charitable organization, (ii) manage his and
his family's personal investments and legal affairs, and (iii) serve on such
boards of directors as are set forth in a list previously furnished to the
Board, so long as such activities described in (i), (ii) and (iii) do not
materially interfere with the discharge of Executive's duties (including, but
not limited to, any conflict of interest or confidentiality matters). Nothing
herein shall preclude Executive from rendering services pursuant to the
Service Agreement, dated as of July 16, 2002, to which Executive and Iesy
Holdings GmbH (among others) are parties (the "Service Agreement") and the
Amended and Restated Employment Agreement, dated as of October 15, 2002, to
which Executive and NTL Incorporated (to be known as NTL Europe, Inc. ("NTL
Europe")) are parties (the "NTL Europe Agreement").
2. Employment Term. The Company agrees to employ Executive and Executive
accepts employment, in accordance with the terms and conditions set forth in
this Agreement, for a period commencing on the "Effective Date" (as such term
is defined in the Second Amended Joint Reorganization Plan Of Incorporated And
Certain Subsidiaries confirmed by the Bankruptcy Court on September 5, 2002)
and expiring upon 90 days' written notice from the Company terminating
Executive's employment, unless terminated as hereinafter provided in
accordance with Sections 4(a), 4(b), 4(c), 4(d) or 4(f) (such period being the
"Employment Term"). The Company may give notice of termination under this
Section 2 at any time after January 1, 2003.
3. Compensation/Benefits. During the Employment Term, the Company shall pay
and provide Executive the following:
(a) Cash Compensation. As compensation for his services to the Company,
Executive shall receive a base salary ("Base Salary") and shall be eligible to
receive additional variable compensation. The Executive's annual Base Salary
shall be (euro)293,000, and his annual guaranteed variable compensation amount
shall be (euro)186,000 payable in equal quarterly installments. Executive
shall also have an opportunity to earn up to an additional (euro)187,000 in
annual variable compensation; provided, however, that for the calendar year
2002, in addition to the guaranteed variable compensation set forth in the
preceding sentence, Executive shall be guaranteed (euro)100,000 in variable
compensation to be payable on or about December 31, 2002. During the
Employment Term, the Compensation Committee of the Board (the "Compensation
Committee") shall review at least annually Executive's Base Salary and
variable compensation then in effect and shall increase such amounts as the
Compensation Committee may approve. Such Base Salary and variable compensation
shall be payable in accordance with the Company's normal payroll practices. If
approved by the Board and by the boards of directors of one or more
subsidiaries of the Company and Executive, a portion of the foregoing
compensation may be payable to Executive by one or more of such subsidiaries.
(b) Expatriate Benefits. The Executive shall receive and be entitled to
the expatriate benefits set forth on Exhibit A attached hereto and tax
differentiation adjustments set forth on Exhibit B attached hereto, assuming a
Florida, U.S. residency. For purposes of clarification, the Company shall
increase the allowance for the lease payments for Executive's car or house in
the event of any successor to Executive's current car or house (as
applicable), so long as such successor car or house is comparable to
Executive's current car or house. In the event of the termination of
Executive's employment other than for Cause (as such term is defined in
Section 4(b) below), in addition to any other payments and benefits provided
in this Agreement, the Company will pay for Executive's (and his family's)
costs of relocation back to a location of Executive's choice provided that the
cost of such relocation shall not be in excess of that of relocating back to
the U.S. Notwithstanding any other Company document to the contrary, any
post-employment Company payments to the Executive shall include the benefits
of the foregoing tax differentiation adjustment.
(c) Employee Benefits. Executive shall, to the extent eligible, be
entitled to participate at a level commensurate with his position in all
employee benefit welfare and retirement plans and programs, provided by the
Company to its senior executives in accordance with the terms as in effect
from time to time. The Company agrees to use its commercially reasonable best
efforts to provide Executive with the same level of benefits he currently
receives as of the date of this Agreement, including but not limited to, group
health coverage for Executive and his dependents and participation in the
Company's or an affiliated company's 401(k) plan, if available, in each case
as set forth on Exhibit C attached hereto. In the event the Company is unable
to provide any such benefits, it agrees to provide comparable benefits (or, in
the Company's discretion, the cost to
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Executive of obtaining such benefits) to the Executive (and his dependents, if
applicable), so long as such comparable benefits may be provided at a
commercially reasonable cost to the Company. Subject to Section 4(e),
following the occurrence of any "qualifying event" (as defined under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")) with respect
to the Executive, the Executive and his dependents shall be offered
continuation coverage under group health plans maintained by the Company or
its affiliates in accordance with COBRA. In the case where COBRA is
inapplicable or continuation coverage cannot be provided under the Company's
group health care plan, the Company shall take all necessary steps to insure
that Executive (and his dependents) have comparable health benefits for the
period of at least 18 months after he is no longer on the Company's group
health plan as if he were otherwise covered by COBRA.
(d) Business and Entertainment Expenses. Upon submission of appropriate
documentation in accordance with its policies in effect from time to time, the
Company shall pay or reimburse Executive for all reasonable business expenses
which Executive incurs in performing his duties under this Agreement,
including, but not limited to, travel, entertainment, professional dues and
subscriptions, and all dues, fees, and expenses associated with membership in
various professional, business, and civic associations and societies in which
Executive participates in accordance with the Company's policies in effect
from time to time.
(e) Vacation. Executive shall be entitled to vacation time in accordance
with the standard written policies of the Company with regard to senior
executives, but in no event less than four weeks of vacation per calendar year.
(f) Payment of Attorney's Fees. Executive shall have the right to
reimbursement, upon proper accounting, of reasonable attorney's fees not to
exceed Ten Thousand Dollars ($10,000) solely in connection with and relating
to the negotiation and execution of this Agreement.
(g) Relocation. In the event the Company asks Executive to be located in
Zurich, Switzerland, the Executive shall be entitled to the relocation
benefits set forth on Exhibit A attached hereto.
4. Termination of Employment.
(a) Death or Disability. The Company may terminate Executive's employment
for disability in the event Executive has been unable to perform his material
duties under this Agreement for six (6) consecutive months because of physical
or mental incapacity by giving Executive 90 days' written notice of such
termination while such continuing incapacity continues (a "Disability
Termination"). Executive's employment shall automatically terminate on
Executive's death. In the event Executive's employment with the Company
terminates during the Employment Term by reason of Executive's death or a
Disability Termination, then upon the date of such termination (i) the Company
shall
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promptly pay and provide Executive (or in the event of Executive's death,
Executive's estate) (A) an amount equal to his Base Salary for a period of
twelve (12) months and any accrued vacation through the date of termination,
(B) an amount equal to his guaranteed variable compensation for a period of
twelve (12) months, with respect to the fiscal year ending on or preceding the
date of termination, (C) reimbursement for any unreimbursed expenses incurred
through the date of termination and (D) all other payments, benefits or fringe
benefits to which Executive is entitled for a period of twelve (12) months.
(b) Termination for Cause. The Company may terminate Executive's
employment for Cause. In the event that Executive's employment with the
Company is terminated during the Employment Term by the Company for Cause,
Executive shall not be entitled to any additional payments or benefits under
this Agreement, other than (A) any unpaid Base Salary through the date of
termination and any accrued vacation through the date of termination, (B) any
unpaid variable compensation at the base level through the date of
termination, with respect to the fiscal year ending on or preceding the date
of termination, (C) reimbursement for any unreimbursed expenses incurred
through the date of termination and (D) all other payments, benefits or fringe
benefits to which Executive is entitled through the date of termination. For
the purposes of this Agreement, "Cause" shall mean (i) Executive (x) is
indicted for, convicted of, or pleads guilty or nolo contendere to, any felony
or (y) commits any other crime involving fraud, embezzlement or breach of
trust or fiduciary duty, (ii) the willful failure by Executive to
substantially perform his duties with the Company (other than any such failure
resulting from his incapacity due to physical or mental impairment), or (iii)
the willful gross misconduct by Executive with regard to the Company or any of
its affiliates that is materially injurious to the Company or any of its
affiliates. No act, or failure to act, by Executive shall be "willful" unless
committed without a reasonable belief that the act or omission was in the best
interest of the Company or one or more of its affiliates (as applicable).
The Company shall give Executive ten (10) days' notice of the Company's
intention to terminate 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. Executive shall have ten
(10) days thereafter to cure such facts and circumstances if possible;
provided, however, that this sentence shall not apply to clause (i) of the
definition of Cause, for which there shall be deemed to be no possible cure.
If the Board reasonably concludes that Executive has not cured such facts or
circumstances within such time, Cause shall not be deemed to have been
established unless and until Executive has received a hearing before the Board
(if promptly requested by Executive) and a majority of the Board in attendance
at a meeting of the Board that occurs within ten (10) days of the date of such
hearing (if so requested) reasonably confirms the existence of Cause and the
termination of Executive therefor.
(c) Voluntary Termination. Executive may voluntarily terminate the
employment relationship at any time upon 90 days' written notice to the
Company,
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except that such notice does not have to be provided in the event
Executive terminates his employment for Good Reason. In the event that
Executive's employment with the Company is voluntarily terminated during the
Employment Term by Executive, Executive shall not be entitled to any
additional payments or benefits under this Agreement, other than relocation
costs as provided herein.
(d) By Executive for Good Reason. Executive may terminate his employment
for Good Reason upon written notice to the Company, and in such event, his
employment termination shall be treated as a Wrongful Termination under this
Section 4. "Good Reason" shall mean:
(i) A material diminution of Executive's positions or authority;
(ii) The assignment to Executive of any duties materially
inconsistent with Executive's position;
(iii) The failure by the Company to timely make any payment due
hereunder or to comply with any of the material provisions
of this Agreement (provided, however, that benefits provided
to Executive pursuant to Section 2(c) of the NTL Europe
Agreement shall for this purpose be deemed to have been
provided by the Company);
(iv) A requirement that Executive's employment with the Company
is to be based anywhere other than Paris or Zurich and
environs or such other locale of the Company's principal
operations, except for required travel for Company business
to an extent substantially consistent with Executive's prior
business travel obligations while employed by the Company;
provided however, that Executive shall not be required to
relocate his primary residence between the periods of
September 1 and July 31 of any given year;
(v) The termination of Executive's employment by Executive for
any reason within 30 days beginning on the 6-month
anniversary of a Change in Control, so long as the notice of
such termination is given within 30 days of the occurrence
of the Change in Control; or
(vi) The failure to maintain directors' and officers' liability
insurance on the substantially similar terms described in
Section 14(b) hereof, despite the Company's reasonable
efforts to maintain such coverage or that such coverage
cannot be obtained at a commercially reasonable cost.
For purposes of this Agreement, a "Change in Control" shall mean (i) any
"person" (as such term is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) other than NTL Cablecom Holding
GmbH is or becomes the
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beneficial owner, directly or indirectly, of securities of the Company
representing more than 50% of the combined, direct or indirect voting power of
the Company's then outstanding voting securities, or (ii) the sale or
disposition by the Company of all or substantially all of the Company's
assets.
Executive shall give the Company ten (10) days' notice of Executive's
intention to terminate Executive's employment and claim that Good Reason has
occurred, and such notice shall describe the facts and circumstances in
support of such claim. The Company shall have ten (10) days thereafter to cure
such facts and circumstances if possible.
(e) Wrongful Termination. In the event that the Executive's employment is
terminated other than pursuant to subparagraph (a), (b) or (c) of this Section
4 (a "Wrongful Termination"), then the Executive shall be entitled to be paid,
in a lump sum by the last regular scheduled payroll payment date, all Base
Salary and variable compensation (at the base rate thereof and pro-rated for
any partial years) that would have been due under this Agreement for a period
of twenty-four (24) months (the "Wrongful Termination Payment"), except upon
mutual agreement in writing by the parties. In computing the payment of
Executive's Base Salary and variable compensation payable to the Executive
pursuant to the preceding sentence, the rate of the Executive's Base Salary
and base variable compensation that is in existence as of the date of the
Wrongful Termination shall be used. In the event of a Wrongful Termination,
Executive shall also be entitled to a continuation of his then existing
employee benefits referred to in Sections 3(b) and (c) above for a period of
18 months. For purposes of clarification after the provision of benefits in
the preceding sentence, Executive shall be provided an opportunity to continue
group health coverage pursuant to Section 3(c). For purposes of further
clarification, a termination of Executive's employment by the Company by
providing notice pursuant to Section 2 hereof shall constitute a Wrongful
Termination for purposes of this Agreement.
(f) Notwithstanding any provision of this Agreement to the contrary, if
Executive's employment terminates under the NTL Europe Agreement and such
termination is as set forth in the left column of the following table, then
Executive's employment shall automatically terminate hereunder and such
termination shall be as set forth in the right column of the following table:
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----------------------------------------- -------------------------------------
NTL Europe Agreement This Agreement
----------------------------------------- -------------------------------------
by NTL Europe for Cause by the Company for Cause
----------------------------------------- -------------------------------------
voluntary resignation by Executive voluntary resignation by Executive
other than for Good Reason (provided other than by Executive for Good
that failure of Executive not to renew Reason
the NTL Europe Agreement shall not
constitute a voluntary resignation)
----------------------------------------- -------------------------------------
by NTL Europe without Cause or by Wrongful Termination
Executive for Good Reason (provided,
that failure of NTL Europe not to renew
the NTL Europe Agreement shall not
constitute a termination without Cause
or an occurrence of Good Reason)
----------------------------------------- -------------------------------------
5. Non-Compete; Non-Solicit.
(i) The parties hereto recognize that Executive's services are special
and unique and that the level of compensation and the provisions
of this Agreement are partly in consideration of and conditioned
upon Executive's not competing with the Company, and that
Executive's covenant not to compete or solicit as set forth in
this Section 5 during employment is essential to protect the
business and good will of the Company.
(ii) Executive agrees that during the term of employment with the
Company (the "Covenant Period"), Executive shall not render
services for any of the six organizations designated by the Board
in a writing delivered to Executive within 30 days after the
Effective Date (the "Prohibited List"). The Prohibited List may be
changed by the Board from time to time (but there may never be
more than six entities listed) by written notice to Executive,
such notice to be effective only if Executive's commencement of
rendering services for such entity is 90 or more days after the
giving of such notice.
(iii) During the Covenant Period and for a period of 12 months
thereafter (the "Non-Solicit Period"), Executive shall not,
directly or indirectly, disrupt, damage or interfere with the
operation or business of the Company by
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soliciting or recruiting its employees for Executive or other, but
the foregoing shall not prevent Executive from giving references.
(iv) During the Non-Solicit Period, Executive shall not, without prior
written authorization from the Company, violate the agreement
entered into pursuant to Section 9 hereof.
(v) During the Employment Term, Executive agrees that he shall not
either alone or together with any "person" (as such term is used
for purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended) (such person, an "Acquiror") acquire,
propose to acquire, seek to acquire, participate in any action to
acquire or otherwise take any steps to acquire any assets of the
Company or any of its affiliates without the express approval of
the Board; provided, however, nothing herein shall prohibit the
Executive from providing services to and receiving compensation
(including equity compensation) from (i) the Company following the
acquisition of a controlling interest in or ownership of the
Company by any Acquiror or (ii) an Acquiror or any of its
affiliates following the acquisition of assets of the Company or
any of its affiliates, in each case so long as Executive did not
violate this Section 5(v).
(vi) Executive agrees that the Company would suffer an irreparable
injury if Executive was to breach the covenants contained in this
Section 5, and that the Company would by reason of such breach or
threatened breach be entitled to seek injunctive relief in a court
of appropriate jurisdiction, as well as such other remedies as may
then be appropriate.
(vii) If any of the restrictions contained in this Section 5 shall be
deemed to be unenforceable by reason of the extent, duration or
geographical scope or other provisions thereof, then the parties
contemplate that the court shall reduce such extent, duration,
geographical scope or other provision hereof and enforce this
Section 5 in its reduced form for all purposes in the manner
contemplated hereby.
(viii) Notwithstanding the foregoing, the provisions of Section 5(iii)
shall not apply if there is a Wrongful Termination of the
Executive's employment.
6. Assignment. This Agreement shall be binding upon and inure to the benefit
of the heirs, beneficiaries, executors and legal representatives of Executive
upon Executive's death. If the Company transfers the enterprise or a part
thereof to a third party, the employment relationship is transferred to the
acquiring party, including all rights and obligations under this Agreement or
otherwise as of the date of transfer, unless Executive declines the transfer.
With the decline of the transfer, the employment relationship shall be
terminated upon the expiration of the legal term of notice. In such a case, the
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acquiring party and Executive shall be bound to perform their contractual
duties until such date. The Company and the acquiring party shall be jointly
and severally liable for all obligations under this Agreement and for all
Executive's claims which have become due prior to the transfer, and which
later will become due until the date upon which the employment relationship or
this Agreement could have validly been terminated, or is terminated upon the
expiration of the applicable legal term of notice in connection with the
decline of the transfer by Executive. This Agreement may not otherwise be
assigned by the Company. None of the rights of Executive to receive any form
of compensation payable pursuant to this Agreement shall be assignable or
transferable except through a testamentary disposition, by the laws of descent
and distribution upon the death of Executive or pursuant to a written
instrument in form satisfactory to Executive and the Company under which
Executive assigns his right to receive any cash compensation hereunder to a
company wholly owned by him. Any attempted assignment, transfer, conveyance or
other disposition (other than as aforesaid) of any interest in the rights of
Executive to receive any form of compensation hereunder shall be null and
void.
7. Notices. All notices, requests, demands and other communications called
for under this Agreement shall be in writing and shall be (i) delivered
personally, (ii) sent by Federal Express or a similar commercial overnight
service, or (iii) mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors in
interest at the following addresses, or at such other addresses as the parties
may designate by written notice in the manner aforesaid:
If to the Company: Cablecom GmbH
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Attn: Board of Directors
If to Executive: ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
8. Severability. In the event that any provision of this Agreement becomes or
is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement shall continue in full force and effect without said
provision.
9. Proprietary Information. Concurrently with the execution of this Agreement,
Executive shall enter into a confidentiality and proprietary information
agreement
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attached hereto as Exhibit D ("Confidentiality Agreement"), provided, however,
that the foregoing shall not preclude Executive from complying with due legal
process or from removing Company property from the Company's premises in
furtherance of his duties and obligations as provided hereunder.
10. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Executive concerning Executive's
employment relationship with the Company, and supersedes and replaces any and
all prior agreements and understandings concerning Executive's employment
relationship with the Company entered into prior to the date hereof but not
any written agreements entered into simultaneous with this Agreement or
thereafter; provided, however, that nothing in this Agreement shall affect in
any way Executive's rights under any of the Service Agreement, the Indemnity
Agreement, dated as of July 4, 2002, to which Executive and iesy Holdings GmbH
(among others) are parties or the NTL Europe Agreement.
11. Governing Law. This Agreement shall be governed by the laws of
Switzerland.
12. No Oral Modification, Cancellation or Discharge. This Agreement may only
be amended, canceled or discharged in writing signed by the Executive and a
duly authorized officer of the Company.
13. Jurisdiction. The place of jurisdiction for disputes arising from the
employment relationship shall be either the domicile of the defendant or the
place of business for which Executive performs work.
14. Indemnification
(a) To the fullest extent permitted by applicable law, the Company shall
indemnify Executive against, and save and hold 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
Executive as a result of Executive's service from and after the Effective Date
as an officer, director or employee of, or consultant to, any member of the
Company or any of its affiliates, or in any capacity at the request of the
Company or any of its affiliates, 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 Executive's acts of willful misconduct,
misappropriation of funds or fraud). In the event the Company does not
compromise or assume the defense of any indemnifiable claim or action against
Executive, the Company shall, to the extent permitted by applicable law,
promptly pay to Executive all costs and expenses incurred or to be incurred by
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
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competent jurisdiction (from whose decision no appeals may be taken, or the
time for appeal having lapsed) that Executive was not entitled to indemnity
hereunder, then Executive shall repay forthwith all amounts so advanced. The
Company may not agree to any settlement or compromise of any claim against
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 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 Executive shall be entitled pursuant
to the Company's Certificate of Incorporation or By-laws or otherwise.
(b) Directors' and Officers' Insurance. During the Employment Term, the
Company shall use its reasonable efforts to maintain directors' and officers'
liability insurance on substantially similar terms as in effect prior to the
Effective Date, so long as such insurance may be obtained at a commercially
reasonable cost.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement,
effective as of the date first written above.
CABLECOM GMBH
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
By: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Its: Director
---------------------------------
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit A: Expatriate Benefits and Relocation Benefits
Exhibit B: Tax Differentiation Adjustments
Exhibit C: Employee Benefits
Exhibit D: Form of Confidentiality Agreement
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EXHIBIT A
Expatriate Benefits
1) Tax Differentiation
The objective is to ensure that the executive pays no more and no less tax and
social security on Company and all sources of income and benefits than he
would have done while working in the home country (USA Florida residency). The
Company will retain Ernst & Young or another suitable tax consultant (Ernst &
Young or such other suitable tax consultant to be referred herein as the
"Consultant") to prepare the executive tax returns. For purposes of this
summary, Company shall refer to NTL Europe, Inc.("NTL Europe") and Cablecom
GmbH ("Cablecom"); provided, however, that nothing herein shall be construed
(x) to cause NTL Europe to have any liability or obligation with respect to
taxes of or relating to Cablecom or (y) to cause Cablecom to have any
liability or obligation with respect to taxes of or relating to NTL Europe.
The Consultant will also calculate the executive's Hypo tax amount which is
the total income and social security tax the executive would have paid had he
kept his residence in the State of Florida. The amount of the Hypo tax
calculated by the Consultant will be withheld by the Company from every
payment made to the executive by the Company.
No less than 10 days prior to the Payment Date as defined below, the
Consultant will submit to the Company a calculation of the tax equalization
amount to be paid by the Company in accordance with the tax equalization
policy set forth in Exhibit B to the Cablecom Employment Agreement (as defined
below). The Company will pay or cause to be paid all tax and social security
payments required to be made by the executive (Hypo tax plus the tax
equalization amount) to the relevant authorities no later than the Payment
Date (as defined below), regardless of whether such tax and social security
payments are due at the time of payment; provided, however, that, if on the
Payment Date the Income Taxes will not be credited to the account of the
executive in satisfaction of the tax obligation by the relevant taxing
authority, then, so long as the executive releases the Company from the
payment thereof, the Company shall pay the Income Taxes to the executive on
the Payment Date for the executive to satisfy the tax obligation as and when
it is due.
In all cases, the Payment Date for Social Security Taxes, as determined in
accordance with the tax equalization policy, is the end of the month.
In the case of Income Taxes to be paid by NTL Europe to the relevant tax
authorities or the executive as provided above, as determined in accordance
with the tax equalization policy, the Payment Date is the earliest of (a) when
such taxes are due; (b) the termination of the Employment Agreement by and
between executive and NTL Europe
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dated October 15, 2002 (the "NTL Europe Employment Agreement"); and (c) six
(6) months from the Effective Date of the NTL Europe Employment Agreement.
In the case of Income Taxes to be paid by Cablecom to the relevant tax
authorities or the executive as provided above, as determined in accordance
with the tax equalization policy, the Payment Date is the earliest of (a) when
such taxes are due; (b) the termination of the Employment Agreement by and
between executive and Cablecom dated October 15, 2002 (the "Cablecom
Employment Agreement"); and (c) the end of each quarter.
The detailed tax equalization policy is provided under Exhibit B to the
Cablecom Employment Agreement. In the event of any conflict or inconsistency
between the terms of this summary or the tax equalization policy set forth in
Exhibit B to the Cablecom Employment Agreement, the terms of this summary
shall govern.
2) Company Car
A monthly allowance of $1,450 plus gas
3) School fees
Cost of tuition and other mandatory fees including enrolment fees at private
school for executive's 2 children
4) Healthcare
Insurance for executive and his dependents to a standard comparable to that
available under NTL Inc. as of September 2002.
5) Leave passage allowance
Executive will be paid an annual non-accountable Leave Travel Allowance net of
tax. The value of the allowance will be based upon the cost of economy (fully
flexible and refundable) return fares from the foreign location to the
international airport nearest to the executive last residence in the US for
the executive and his/her family. The executive may elect to receive payment
of the first allowance at any date after the first six months of the
assignment and thereafter during
14
each subsequent calendar year of the assignment. The executive is free to make
his/her own leave travel arrangements and no further claims for travel
expenses incurred will be accepted.
6) Compassionate Leave
In the event of a life-threatening illness or death within the immediate
family, the executive, his spouse and children will be provided with return
air passages to the US/Home country and up to one week's leave of absence.
7) Housing Allowance
GBP 5,300 (US$8,281.50) per month
8) Income tax preparation
Given the complications related to income tax preparation, the company will
hire at its cost a consultant to prepare the income tax returns of executive
in all the jurisdictions executive is subject to income tax.
9) Immigration/visas
The company will cover the cost of assisting the executive in maintaining his
immigration status in the US as well as in obtaining all necessary work visas
and residency permits for him and his family.
10) Moving/Relocation
The company will pay for 1) All direct
cost of moving all of executive's personal effects including packing,
unpacking, freight, clearance and insurance. The executive will seek 3 bids
from well established international moving companies. The company will
promptly reimburse the executive an amount equal to the lowest bid. 2) A
relocation allowance equal to one month base salary net of tax to defray the
cost of setting up a new home 3) Up to 5 trips for executive and his
15
family to the new location to prepare for the move and interview with schools.
Expenses to be reimbursed according the company travel policy and 4) 30 days
of temporary accommodations for executive and his family to be extended only
with express permission of the company.
The benefits under section 10 will be provided in the event the company asks
Executive to relocate or in the event executive's employment terminates for
any reason other than cause.
11) Payment Of Salary/Exchange Rates:
Salary will be paid no less than monthly in arrears per executive
instructions. Payments to US bank account will be made in US$. Payment in the
local bank account will be made in the local currency. The applicable exchange
rate will be that in effect as of the date of the relevant employment
agreement.
16
EXHIBIT B
CABLECOM GMBH
TAX EQUALISATION POLICY
A. Objective
A tax equalisation policy has been established, when on foreign
assignment, 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 CABLECOM GMBH employee working in the US with
comparable CABLECOM GMBH income, personal income, adjustments,
deductions and exemptions, irrespective of host (ie, assignment)
country.
By equalising income and social tax costs for its expatriates, CABLECOM
GMBH 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 Obligations
CABLECOM GMBH requires that all employees be familiar and comply fully
with all applicable national and local laws. In connection with tax
matters, the following guidelines ensure that CABLECOM GMBH and its
expatriates will fully comply with worldwide income tax requirements.
o CABLECOM GMBH regards compliance with worldwide income tax
requirements as a mandatory obligation of each expatriate.
o An expatriate must conduct himself at all times so as to
avoid charges of tax evasion or abuse, or of violation of
local law, which could jeopardise in any way his standing
personally or as a representative of CABLECOM GMBH.
o An expatriate is expected to exercise care and attention
in minimising his liability for worldwide income taxes in
accordance with appropriate principles of tax planning. An
expatriate must co-operate with CABLECOM GMBH 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. The income and social taxes to be paid by each expatriate will be
governed by the tax laws and regulations under which the taxing 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. CABLECOM GMBH has engaged an
international tax consulting firm to assist expatriate employees in
meeting this obligation. The fee for such services will be borne by
CABLECOM GMBH.
Tax returns prepared by the international tax consulting firm will be
kept confidential by them.
D. Implementation of Tax Equalisation
CABLECOM GMBH 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 CABLECOM GMBH Tax Equalisation Policy, each
expatriate will have a total income tax burden approximately equal to
that of an CABLECOM GMBH 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,
CABLECOM GMBH 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 CABLECOM GMBH 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 Ohio 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. CABLECOM GMBH has decided to calculate
hypothetical State tax based on Ohio rates, since this is where
payroll is
2
maintained, irrespective of an individual's 'home' state prior
to accepting overseas assignment.
Income to be included in the hypothetical tax calculations is as
follows:-
o base salary
o bonus
o car benefit
o group term life
o 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:
o actual amounts claimed on Federal income tax return to
arrive at adjusted gross income.
o actual itemised deductions per Federal return,
excluding moving expenses.
o 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.
o credit will be given for hypothetical Ohio 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 CABLECOM GMBH during the course of a year whenever there is a
change in the expatriate's base salary, 401(k) contribution, or
other CABLECOM GMBH 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, CABLECOM
GMBH may reduce the retailed hypothetical tax to give the
expatriate current tax benefit. Conversely, CABLECOM GMBH 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
3
which the expatriate may have been subject prior to the
International Assignment. The 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 CABLECOM GMBH 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 CABLECOM GMBH 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 filing 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 CABLECOM GMBH 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 CABLECOM GMBH employee in the US with
comparable base salary, bonus, other CABLECOM GMBH 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 CABLECOM GMBH 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
CABLECOM GMBH expatriate with losses, alimony or itemised
deductions will likely receive a cash reimbursement from
CABLECOM GMBH after the end of the year. On the other hand, an
CABLECOM GMBH expatriate with net personal income will be
obliged to make a cash payment to CABLECOM GMBH 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 CABLECOM GMBH 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:
4
(a) CABLECOM GMBH Income
o 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 CABLECOM GMBH and who
works a part-year for CABLECOM GMBH in the US base
salary will be the sum of the two part-year base
salaries).
o Cash bonuses and any other cash incentive compensation.
o (Income from the exercise of CABLECOM GMBH 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 CABLECOM GMBH, 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).
o Income from any other CABLECOM GMBH stock-based
incentive plan.
o 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.
o Overseas allowances are excluded from all calculations
of hypothetical tax to ensure that CABLECOM GMBH 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". CABLECOM GMBH 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 CABLECOM GMBH. It includes, but
is not limited to, amounts from the following sources
which are taxable on an expatriate's actual US income
tax return:
o Dividends
o Interest
5
o State income tax refunds
o 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.
o Net rental income (but excluding any CABLECOM GMBH -
funded expenses).
o Net partnership income.
Capital gain arising from the sale of an expatriate's
US principal residence will not be tax equalised under
the CABLECOM GMBH 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:
o 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 CABLECOM GMBH.
o 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 CABLECOM GMBH expatriate
and not by his spouse.
"Personal losses" encompass losses funded
exclusively by the expatriate. This category includes, but is not
limited to:
R Net capital loss deductible on the actual US income tax return.
o Net rental loss deductible on the actual US income tax
return (but excluding any CABLECOM GMBH funded
expenses).
o 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 CABLECOM
GMBH 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
▇▇▇ 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 CABLECOM GMBH.
(e) Tax Rates & Filing Status
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 Ohio which would have been
applicable to an expatriate if he had remained in the US.
7
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:
o 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.
o 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. CABLECOM GMBH 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, CABLECOM GMBH will reimburse the actual
amount of worldwide income taxes paid by an expatriate as well
as local social taxes paid, if any.
In general, CABLECOM GMBH employees on International Assignment
will be subject to income and social taxes in their country of
assignment. Where this is the case, CABLECOM GMBH 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.
Whenever an expatriate must pay a local income or social tax,
CABLECOM GMBH 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:-
o Withholding taxes which CABLECOM GMBH is required to
pay over to the assignment country government.
o Estimated tax filings made during the year.
o 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.
8
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 CABLECOM GMBH. An amount equal
to any local tax refunds must be paid or turned over to CABLECOM
GMBH by the expatriate, since CABLECOM GMBH (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.
CABLECOM GMBH 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 CABLECOM GMBH, 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 CABLECOM GMBH. The reconciliation will then
indicate the net reimbursement owed to/by the expatriate, and
CABLECOM GMBH reimbursement will be made as appropriate and
final.
CABLECOM GMBH will reimburse the expatriate for all interest and
penalties relating to CABLECOM GMBH income except when the
assessment of the interest and penalties results from the
negligence or fault of the expatriate; eg,., a delay in
submitting data booklets or tax questionnaires to the
consultants which in turn prevents the timely filing of a
return.
CABLECOM GMBH 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.
5. Credits Allowed against US tax for Local Taxes Paid
Any tax credits for local taxes (referred to as "foreign tax
credits") reimbursed by CABLECOM GMBH 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 CABLECOM GMBH.
It also includes tax credits (reimbursed by CABLECOM GMBH) 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
9
from the Internal Revenue Service, plus interest, to CABLECOM
GMBH. 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 CABLECOM GMBH, 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 CABLECOM GMBH. 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 CABLECOM GMBH 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 CABLECOM GMBH Tax Equalisation
Policy, any "final" tax paid with respect to income tax
reimbursements will be fully reimbursed by CABLECOM GMBH.
For repatriated employees receiving tax reimbursements during
the year subsequent to termination of their International
Assignment, the payment may be 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 CABLECOM GMBH 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 CABLECOM GMBH. This loan will, to the
extent possible,
10
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 CABLECOM GMBH 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 CABLECOM GMBH within 10 days of receiving the
applicable refund of taxes from the US or local government
taxing authorities. CABLECOM GMBH 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:
o Hypothetical US income tax retained from compensation
(described above) during the portion of the year spent
on International Assignment,
o Final hypothetical US income tax (described above) on
the entire year's income, and
o Actual US income tax liability on Form 1040 for the
entire year.
Where the expatriate was employed by an employer other than
CABLECOM GMBH 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.
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 CABLECOM GMBH allowance on which
CABLECOM GMBH assumes responsibility for paying actual taxes.
12. Treatment of expatriates who are married to participants in tax
equalisation policies of other employers
11
For an expatriate whose spouse is employed in the host country
by entities other than CABLECOM GMBH 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 CABLECOM GMBH expatriate receives
the protection to which he is entitled under the CABLECOM GMBH
Tax Equalisation Policy by eliminating any distorted results
which could occur if the standard calculations were performed.
12
EXHIBIT C
Life Insurance at 2x annual salary for a maximum of $300,000. Long term
disability at 50% of monthly salary up to $6,000 per month.
Dental coverage on substantially similar terms as Executive currently
receives, including COBRA continuation rights.
Medical coverage on substantially similar terms as Executive currently
receives.
Participation in 401(k) plan on substantially similar terms as 401(k) plan
Executive currently participates in.
EXHIBIT D
CONFIDENTIALITY AND INVENTION AGREEMENT
In consideration of your employment with Cablecom GmbH and its affiliates (the
"Company"), you (the "Employee") agree to the following:
1. Both during and after the term of your employment together with any time
period during interviews prior to employment, the Employee will treat as
confidential and not disclose to others, or take or use for the
Employee's own purposes or for the purposes of others, any Information
(as defined below) owned or controlled by the Company or its affiliates
(the "Company") or furnished by the Company to the Employee.
2. The term "Information" includes all trade secrets and other confidential
or proprietary business, technical, personnel or financial information,
whether or not developed by the Company, in whatever form and whether or
not marked as confidential or proprietary, and shall include, but not be
limited to, software systems and processes, computer programs,
specifications, samples, records, data, drawings, diagrams, models,
customer names, business or marketing plans, studies, analyses,
correspondence or memorandums, projections and reports. The term
"Information" shall also apply to all property belonging to the Company
by virtue of Paragraph 4 below. Any Information which is not readily
available to the public shall be considered to be a trade secret and
confidential and proprietary unless (a) the Company advises the Employee
otherwise in writing or (b) the Employee knew of such Information prior
to the commencement of the Employee's employment with the Company or the
Employee obtained the information from a third party, in each case
without a violation of an agreement with the Company that provides for
the confidentiality of the Information.
3. Upon termination of your employment, the Employee will return all
property belonging to the Company (including, but not limited to property
belonging to the Company by virtue of Paragraph 4 below). Such property
shall include all documents or other media in the Employee's possession
or control which in any way incorporate or reflect the Information.
4. The Employee assigns to the Company all of the Employee's right, title
and interest in and to all works of authorship, ideas and inventions,
whether copyrightable, patentable or not, made or conceived by the
Employee, solely or jointly with others, for the Company and while in the
Company's employ (collectively, the "Assigned Materials"). The Employee
will fully cooperate with the Company in the preparation of any
applications, powers of attorney, or other documents, necessary or in the
Company's opinion advisable, in order to obtain any copyrights or patents
for the Assigned Material and to vest title thereof in the Company.
4. The Employee acknowledges that in the event of a breach of this Agreement
by Employee money damage would be both incalculable and an insufficient
remedy the Company, in addition to any other remedies at law or in equity
it has, shall be entitled, without the requirement of posting a bond or
other security, to seek equitable relief for such a breach or threatened
breach, including injunctive relief and specific performance.
5. This Agreement, and the application or interpretation thereof, shall not
be considered to be an employment agreement and shall be governed
exclusively by its terms and by the internal laws of the State of New
York. The agreements set forth in this Agreement may be modified or
waived only by a separate writing signed by The Company and the Employee.
The Employee Cablecom GmbH
______________________________ By:__________________________
Signature
______________________________ ______________________________
Printed Name Date
______________________________
Date
2
Side Letter
This Side Letter, dated as of October 15, 2002, is hereby made by and
between Cablecom GmbH (the "Company") and ▇▇▇▇▇ ▇▇▇▇▇▇.
WHEREAS, the parties have entered into an Employment Agreement, dated
as of October 15, 2000, contemporaneously herewith (the "Employment
Agreement"); and
WHEREAS, the parties intend herein to clarify Section 4(e) of the
Employment Agreement;
NOW, THEREFORE, in consideration of each party's entering into the Employment
Agreement and other good and valid consideration, the receipt of which is
hereby acknowledged, the Employment Agreement is hereby amended as follows:
1. In the event that, as of the date the Wrongful Termination Payment
is otherwise due, the Company is not the subject of a then-pending bankruptcy
proceeding, the period for computing the Wrongful Termination Payment pursuant
to Section 4(e) of the Agreement shall be reduced from twenty-four (24) months
to twelve (12) months.
2. Except as otherwise provided herein, the terms and conditions of
the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have entered into this Side Letter effective
as of the date first written above.
______________________________ ______________________________
CABLECOM GmbH ▇▇▇▇▇ ▇▇▇▇▇▇
BY:___________________________
ITS: __________________________
DATED:_______________________ DATED:________________________