EXHIBIT 10.22
FLAG TELECOM
FEBRUARY 19, 2003
EMPLOYMENT AGREEMENT
This Agreement, dated as of February 19, 2003, by and between Xxxxxxx X.
Xxxxxxxxx ("Employee") of Xxxxxx Xxxxxxx, Xxxxxx Xxxx, Xxxxxxx, Near Sidmouth,
Xxxxx XX00 0XX, Xxxxxxx and FLAG TELECOM GROUP LIMITED ("the Company") whose
registered office is at Xxxxx Xxxxx, 00 Xxxxx Xxxxxx, Xxxxxxxx 00, Xxxxxxx.
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 Xxx 0000, as
originally enacted.
1. JOB AND RESPONSIBILITIES AND PLACE OF EMPLOYMENT
You shall be employed by the Company in the post of Chief Executive Officer,
member of the Board of Directors, and as a member of the Office of the Chair
Committee of the Board and you shall report to the Board.
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.
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 and one (1) day from 1 March 2003 (the "Minimum
Period"). Thereafter, this agreement can be terminated by either party in
accordance with Clause 11.
3. REMUNERATION
3.1 BASIC SALARY. You will be paid a basic salary of GBP L300,000 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 Chief
Executive Officer. 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.
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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
100% of basic salary, which for 2003 shall be calculated as if you were employed
for 12 months, with a guaranteed minimum bonus payment in 2003 of 50% of one
year's basic salary. Bonus earnings will be determined by the Board, 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. As soon as practicable following the date of employment,
you will be granted options under the Company's Stock Incentive Plan ("Plan") in
respect of 44,500 ordinary shares in the Company. 14,834 shares will vest on the
first anniversary of the date of employment, 14,833 shares vesting on the second
anniversary of the date of employment and 14,833 shares vesting on the third
anniversary of the date of employment. The price of the options will be set at
the fair market value of the Company's shares on the first day of your
employment as determined by the Board of the Company in good faith. This award
will be subject to the rules of the Plan.
Upon a Change in Control (as defined in the Plan) or if your employment is
terminated by the Company without Cause or if you terminate your employment for
Good Reason, all options which have been granted to you under this Clause 3.3
shall automatically vest. In the event of your termination of employment from
the Company for any other reason, all unvested options shall terminate and cease
to be exercisable and all vested options shall remain exercisable by you for
three (3) months following such termination (one (1) year in the event of your
death, disability or termination by the Company without Cause), but in no event
beyond the term of the option.
3.4 CAR ALLOWANCE. You shall also be entitled to a cash car allowance of GBP
L18,000 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. The Company will pay a contribution of 10% of your annual base
salary towards your pension or equivalent instrument. The Company will liaise
with you and your advisors on the most effective way of implementing such
contribution.
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.
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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
You will be provided cover for private health insurance for yourself and your
dependents, life insurance with a death or permanent disability benefit in the
amount of US$675,000 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
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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 majority of the Board of the Company; or
(e) breach of any material term of this Agreement.
You will be provided with written notice by the Board 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 Board
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 the Company or any Associated Company doing any of the
following:
(a) 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 Board, and/or
appointing an executive chairman of the Board; and/or
(b) breaching any material term of this Agreement.
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 one year's worth of your basic salary plus target bonus, 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.
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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
one year's worth of your basic salary plus target bonus of 100% of one year's
basic salary.
11.7 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. In this context, you have made the Company aware of your
current role as non-executive chairman of a certain company in the
pharmaceutical industry, engaging you to a maximum of 2 working days per month
and the Company acknowledges that this does not represent any conflict. You
acknowledge that the Company has relied upon such representations as a material
inducement to entering into this Agreement with you.
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.
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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
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For and on Behalf of FLAG Telecom Group Limited Date
I have read, understood and accept the Terms and Conditions of Employment as
stated and referred to in this document.
Signed
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Xxxxxxx Xxxxxxxxx Date
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