EXHIBIT 10.29
October 1, 1998
Mr. J. Xxxxxxx Xxxxx
0000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Re: Employment Terms
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Dear Xxx:
This letter sets forth our agreement ("Agreement") concerning your
continued employment by United International Holdings, Inc. ("UIH"), and your
secondment to United Pan-Europe Communications NV located in Amsterdam, The
Netherlands (the "Company"). UIH, the Company and you will have the rights and
responsibilities related to your job assignment described in this Agreement.
The terms and conditions of your continued employment with UIH and
secondment to the Company are as follows:
1. Employment. UIH hereby employs you, and you hereby accept employment by
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UIH, for the period and upon the terms and conditions hereinafter set forth.
2. Duties.
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(a) You hereby resign as Chief Financial Officer of UIH and, during the
term of this Agreement, you agree to serve as the President of the Company and
the Company and UIH agree to retain you in such capacity. You shall devote all
of your business time, energy and skill to the affairs of the Company. You shall
report to the Chairman and Chief Executive Officer of the Company and at all
times during the term of this Agreement you shall have the powers and duties of
the President of the Company, including those described on Schedule A attached
hereto, and such further powers and duties as the Chairman and Chief Executive
Officer of the Company shall assign to you; provided that such powers and duties
shall at all times be commensurate with your position as President of the
Company.
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 2
(b) During the term of this Agreement, you shall be a member of the
Management Board of the Company.
(c) Your principal place of business with respect to your services to
the Company shall be at the Company's corporate headquarters in Amsterdam, The
Netherlands, or at any other location mutually agreed upon by the parties.
3. Term and Renewal. The term of this Agreement shall begin on October 1,
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1998 and shall continue through March 31, 2001, unless sooner terminated in
accordance with the terms contained herein. This Agreement may be renewed or
extended upon mutual consent of the parties.
4. Salary and Benefits.
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(a) For services rendered by you under this Agreement, UIH shall pay you a
base salary at the initial rate of U.S. $300,000 per year, payable in accordance
with UIH normal payroll practice, provided that you may elect to have all or any
portion of your base salary paid to you in U.S. Dollars by deposit to one or
more bank accounts designated by you and/or to you directly in Guilders at the
same exchange rate for U.S. Dollars in effect at the time of payment as that
used for other UIH expatriate employees in The Netherlands. Your base salary
shall be increased to U.S. $330,000 commencing January 1, 1999. Thereafter, you
will be considered for an annual increase on the same basis and in accordance
with the same practice applicable to other senior executives of UIH.
(b) You and your family shall be entitled to participate in such of UIH's
benefit plans as are from time to time available to executive officers of UIH,
including medical and dental insurance, life and disability insurance plans, and
the UIH 401 (k) plan, subject to any conditions or restrictions imposed by law
or regulation.
(c) You shall be eligible, and shall continue to be considered, for the
grant of stock options and other incentive compensation by UIH and the Company,
all in accordance with the policies and practices of UIH and the Company in
effect from time to time.
(d) The Company shall promptly reimburse all of your reasonable out-of-
pocket expenses incurred in the course of performing your duties under this
Agreement, including without limitation, travel and entertainment expenses, upon
presentation by you from time to time of an itemized account of such
expenditures and supporting documentation in accordance with Company policy.
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 3
(e) You will also receive a one-time moving assistance allowance in the
amount of $25,000, payable upon signing of this Agreement.
(f) During the term of the Agreement, the Company shall pay to you on the
first of each month, commencing on January 1, 1999 (or such earlier date as you
require the use of a car in The Netherlands), a monthly car allowance in the
amount of NLG 2,500.
(g) You shall be entitled to four weeks of vacation per anniversary year,
which shall accrue on a monthly basis and shall be taken in accordance with
applicable UIH Policies.
(h) The stock options you have been granted under the employee stock option
plans for UIH, UIH Latin America, Inc. and UIH Asia/Pacific Communications, Inc.
(ie., options to acquire 165,000, 60,000 and 60,000, respectively) will continue
to vest in accordance with the provisions of such plans. The 60,000 phantom
stock options you were previously granted under the Company's Phantom Stock
Option Plan ("UPC Plan") began vesting April 1, 1997, pursuant to the terms of
the Plan. You have been granted an additional 265,000 phantom stock options
under the UPC Plan with an exercise price of NLG 20.35, which began vesting on
October 1, 1998. You will be considered for options by the Supervisory Board of
the Company in the event the Board is considering other Company executives for
additional options and in the sole discretion of the Board.
5. Tax Equalization.
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(a) UIH will provide tax equalization payments to the extent required to
ensure that you do not pay a higher net worldwide tax on the basic compensation
and benefits you received for services performed under this Agreement and up to
$50,000 net private source income, gains or losses for any taxable year, than
the amount of tax you would have paid on that same compensation and net private
source income, gains or losses if you had received such amounts and benefits
while a resident of the U.S. working and residing in the U.S. during the same
period. Conversely, to the extent that your worldwide tax liability in any year
is less than your U.S. federal and state tax liability would have been for that
year, had you worked and resided solely in the U.S., UIH shall be entitled to
receive payments from you for the amounts of such savings. The method of
computing and paying tax equalization payments shall be described in the letter
describing UIH's expatriate tax equalization policy from Xxxxxx Xxxxxxxx dated
April 29, 1994, including attachments thereto, subject to the following
provisions:
(i) UIH shall pay the costs of Xxxxxx Xxxxxxxx to prepare your
worldwide tax return for you during the term of this Agreement and so long as
you remain subject to any foreign taxation, or are entitled to claim any U.S.
foreign tax credits, as a result of compensation earned under this Agreement.
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 4
(ii) You shall be required to adopt any tax positions recommended for
you by UIH or its tax professionals, subject to your consent which may not be
unreasonably withheld.
(iii) Any change in UIH's tax equalization policy shall be applicable
to you, but only if and to the extent that the change in the policy does not
have an economic cost to you of more than U.S. $10,000 during the term
hereof.
(iv) The payments made pursuant to Sections 4(e), 4(f), 5(a), 6, 7
and 8, hereof, will be eliminated in the computation of hypothetical taxes
(and thus will effectively be paid net of taxes other than FICA).
(v) If Xxxxxx Xxxxxxxx determines that under UIH's Tax Equalization
Policy you owe taxes as a result of your assignment, you agree that you will
pay such amount to the Company. If Xxxxxx Xxxxxxxx determines that under UIH's
Tax Equalization Policy the Company owes you taxes as a result of your
assignment in the foreign location, the Company agrees to pay you such amount.
In the event you do not submit information necessary to complete your
tax returns for a given tax year by the date required by UIH's tax consultant
for timely filing you may be charged with the additional costs incurred by UIH
as a consequence of such delay and in the event you have not paid amounts
owing to UIH under the Tax Equalization Policy for prior years, you will have
no right to be tax equalized for that tax year for which a tax return is to be
prepared and, in UIH's sole discretion, UIH may elect not to tax equalize you.
6. Relocation Expenses. The Company shall pay the, reasonable costs of
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relocating you and your immediate family from your home in Denver, Colorado to
Amsterdam, including business class airfare for you and your immediate family,
the cost of shipping your household effects and one automobile to Amsterdam and
storing unshipped items in the United States, and living expenses (including
hotel, meal and car rental costs as approved in advance by the Company) for you
and your family until you have located housing in Amsterdam. The Company shall
also pay the reasonable costs of returning you and your immediate family, and
you and their personal effects, to Denver, Colorado upon termination or
expiration of this Agreement; provided, however, that such costs shall not be
paid in the event of a Termination for Cause or a Voluntary Termination.
7. Transfer Bonus. You will receive a transfer bonus in the amount of U.S.
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$60,000, payable as follows: For each month beginning October 1, 1998, the
Company shall pay to you U.S. $2,000 until the amount has been paid in full
("Transfer Bonus"). It is anticipated that this
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 5
payment will help you pay additional moving costs, such as costs incurred (if
any) in selling your Denver home.
8. Cost of Living Adjustments. You will be paid a cost of living differential
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in the amount of NLG 7100 per month. Such payment shall be made on normal
payroll dates.
9. U.S. Visits. The Company agrees to pay for two round-trip business class
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tickets per anniversary year, effective November 1, for you and each of your
immediate family members residing in the foreign location to return to one
destination in the U.S. through October 1, 2000, Effective October 1, 2000, the
Company agrees to pay for one round-trip business class or two round-trip coach
class tickets per anniversary year for you and each of your immediate family
members residing in the foreign location to return to one destination in the
U.S. These tickets cannot be exchanged for tickets with a destination other than
the U.S.
10. Educational Expenses in The Netherlands. The Company shall reimburse you
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for grades kindergarten through 12 (or the equivalent) tuition costs reasonably
required to send any or all of your children to a private school in The
Netherlands during your residence in The Netherlands during the term of this
Agreement.
11. Termination for Cause. Termination for Cause may be effected by UIH at any
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time during the term of this Agreement by written notification to you. Upon
Termination for Cause, you immediately shall be paid the Basic Termination
Package.
12. Termination Other Than for Cause. UIH may effect a Termination Other Than
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for Cause at any time upon giving at least thirty (30) days written notice to
you. Upon any Termination Other Than for Cause, you shall immediately be paid
the Basic Termination Package and Severance Compensation as provided in Section
17.
13. Termination by Reason of Disability. If, during the term of this
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Agreement, you, in the reasonable judgment of the Chief Executive Officer of the
Company, have failed to perform your duties under this Agreement on account of
illness or physical or mental disability, which condition renders you incapable
of performing the duties of your office, and such condition continues for a
period of more than three (3) months, UIH shall have the right to terminate
your employment hereunder by written notification to you and payment to you of
the Basic Termination Package.
14. Death. In the event of your death during the term of this Agreement, your
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employment shall be deemed to have terminated as of the last day of the month
during which death occurs and UIH shall pay to your personal representative the
Basic Termination Package.
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 6
15. Voluntary Termination. You may effect a Voluntary Termination at any
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time upon giving at least thirty (30) days written notice to UIH and the
Company. In the event of a Voluntary Termination, UIH shall immediately pay to
you the Basic Termination Package.
16. Change in Control. If UIH enters into a change in control agreement
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with any other senior executive of UIH or the Company, the same terms will be
offered to you.
17. Severance Compensation.
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(a) UIH and you recognize that the services to be rendered under this
Agreement are special, unique and of extraordinary character. It is anticipated
and acknowledged that if this Agreement is terminated in a Termination Other
Than for Cause, you will sustain actual damages, the amount of which is
indefinite, uncertain and difficult of exact ascertainment because of the
uncertainties of successfully seeking a comparable position in the market place.
In order to avoid dispute as to the amount of such damages, UIH and you hereby
stipulate and agree that UIH shall pay to you, not as a penalty, but as your
agreed severance compensation and liquidated damages for the termination of this
Agreement, an amount equal to your base salary (at the rate payable at the time
of termination) for the balance of the scheduled term of this Agreement and an
amount equal to the unpaid balance of the Transfer Bonus for the scheduled term
of this Agreement, in each case payable in one lump sum within ten (10) days
after termination, plus all insurance plan benefits and other benefits
contemplated by Sections 4(d) and (f), 5, 6, 8 and 10 hereof for so long as you
remain outside of the United States, but not to exceed three (3) months
following the effective date of your termination ("Severance Compensation").
UIH, the Company and you shall execute and deliver at the time of payment of
Severance Compensation a release in the form attached hereto.
(b) All Severance Compensation shall be without prejudice to your right
to receive the Basic Termination Package (provided there is no duplication), and
any other benefits you may be entitled to hereunder. No deduction shall be made
under this Section 17 for any compensation earned by you from any other
employment or for any other monies otherwise received by you subsequent to
termination of employment hereunder. Upon a Termination Other Than for Cause,
the options to acquire stock of UIH or the Company, or any affiliates thereof,
heretofore or hereafter granted to you shall vest immediately (i) as provided in
the option plan or agreement pursuant to which they were granted or (ii) if
greater, in such number as would have vested had you continued as an employee
hereunder through March 31, 2001.
(c) UIH shall use all reasonable efforts to avoid and/or minimize the
characterization of payments made hereunder as an "excess parachute payment"
within the meaning of IRC (S)280G. If such payments are deemed excess parachute
payments subject to IRC (S)4999, UIH
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 7
shall be obligated to provide you with the same compensation related to the
excise tax imposed by IRC (S)4999 that it makes to other UIH executives in
connection with a change in control of UIH.
18. No Severance, Compensation Upon Other Termination. In the event of a
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Voluntary Termination, Termination for Cause, termination by reason of your
disability pursuant to Section 13 or termination by reason of your death
pursuant to Section 14, neither you nor your personal representative shall. be
paid any Severance Compensation.
19. Employee Receivables. You acknowledge that you may incur personal
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expenses in the course of your employment with UIH and the Company. These
expenses may include, but are not limited to, personal phone calls, personal
travel expenses, travel advances, and amounts due as a result of the tax
equalization calculation; you agree that UIH may, after reasonable notice,
deduct such personal expenses you owe UIH or the Company from your paycheck at
any time during your employment.
You also agree that, if you fail to return, or return in damaged
condition, any items you have received for use during your employment with UIH
and the Company (such as computer equipment, fax machine, etc.), upon separation
from UIH the fair market value of such items may be deducted from your final
paycheck. Also, UIH or the Company may pursue other legal remedies available to
recover the reasonable value of any such item not returned.
20. Definitions. For purposes of this Agreement, the following terms shall
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have the following meanings:
(a) "Termination for Cause" shall mean termination of your employment
or secondment. under this Agreement by UIH or the Company, as applicable, by
reason of your (i) willful dishonesty towards, fraud upon, crime against, or
deliberate injury or attempted injury to UIH or the Company, (ii) conviction
for any felony crime which reflects upon your suitability as an employee of UIH
or your ability to perform under this Agreement, (iii) sexual harassment or
other similar workplace misconduct, (iv) intentional falsification of Company
records, or (y) continued failure after written notice specifying such failure
in reasonable detail to perform your material duties under this Agreement,
except that failure of the Company to meet operating or financial performance
shall not constitute a basis for a Termination for Cause.
(b) "Termination Other Than for Cause" shall mean termination of your
employment or secondment under this Agreement by UIH or the Company, as
applicable, (other than (i) Termination for Cause, (ii) termination by reason of
your death or disability, or (iii) expiration of the term of this Agreement) and
shall include constructive termination of your employment or secondment by
reason of material breach of this Agreement by UIH or the Company,
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 8
the assignment to you of duties inconsistent with, or a substantial alteration
in the nature or status of, your responsibilities as in effect at the date
hereof or a reduction in your base salary or other compensation or benefits, if
such material breach or such change has not been cured within thirty (30) days
following written notice by you to UIH or the Company, as applicable, of such
material breach or change setting forth with specificity the nature of the
breach or change.
(c) "Voluntary Termination" shall mean termination by you of your
employment or secondment under this Agreement other than (i) Termination Other
than for Cause or (ii) termination by reason of your death or disability.
(d) "Basic Termination Package" shall mean all accrued salary, bonus
compensation to the extent declared, vest deferred compensation (other than
pension plan or profit sharing plan benefits, which will be paid in accordance
with the applicable plan), any benefits under any plans of UIH's or the Company
in which you are a participant to the full extent of your rights under such
plans, accrued vacation pay and any business expenses incurred by you in
connection with your duties hereunder, all to the date of termination.
21. Miscellaneous.
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(a) You will not, during and for three years after the termination of
your employment, disclose or use for the benefit of any person or entity other
than UIH or the Company, any UIH or Company confidential information that you
develop or receive during your employment. UIH and Company confidential
information shall mean all trade secrets, research and development information,
product and marketing plans, personnel and financial data, product and service
specifications, prototypes, software, models, customer lists and other
information or materials of UIH the Company, or of others with whom UIH or the
Company has a confidential relationship (with respect to such confidential
relationship with a third party only to the extent you were aware of such
relationship or proprietary nature of such information). You will promptly
return all such information and materials to UIH when your employment ends.
Confidential information shall not include information (i) generally known in
the industry, (ii) known to you before you became an employee of UIH or (iii)
disclosed to you by a third party who has the lawful right to disclose it. This
provision shall survive the termination of your employment with UIH for three
years.
(b) The waiver of the breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach of the same or
other provision hereof.
(c) This Agreement represents the entire understanding among the
parties with respect to the subject matter hereof, and this Agreement supersedes
any and all prior understandings, agreements, plans and negotiations, whether
written or oral, with respect to the subject matter
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 9
hereof. All modifications to this Agreement must be in writing and signed by the
party against whom enforcement of such modification is sought.
(d) The Company may change, at its sole discretion, from time to
time, the provision of benefits plans, expatriate policies or other corporate
policies, provided such change is of generally applicability and does not have
an economic cost to you of more than U.S. $10,000 during the term of this
Agreement.
(e) All notices and other communications under this Agreement shall
be in writing and shall be given by fax, first-class mail, certified or
registered with return receipt requested or a recognized commercial courier, and
shall be deemed to have been duly given three days after mailing, one business
day after transmission of any electronically confirmed fax or two days after
delivery to such courier, addressed to the respective persons named below:
If to UIH or the Company:
United International Holdings, Inc.
Regency Plaza One
0000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
Attention: President
with a copy to the same address to the attention of the Legal Department.
If to you:
J. Xxxxxxx Xxxxx
0000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Fax. No.: (000) 000-0000
Any party may change such party's address for notices by notice duly given
pursuant to this Section 21.
(f) The section headings herein are intended for reference and shall
not affect the construction or interpretation of this Agreement.
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 10
(g) This Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado applicable to contracts entered into and
wholly to be performed within the State of Colorado.
(h) Should a court or other body of competent jurisdiction determine
that any provision of this Agreement is invalid or unenforceable, such provision
shall be adjusted rather than voided, if possible, so that it is enforceable to
the maximum extent possible, and all other provisions of the Agreement shall be
deemed valid and enforceable to the extent possible.
(i) UIH's and the Company's obligations hereunder shall not be
terminated by reason of any liquidation, dissolution, bankruptcy, cessation of
business, or similar event relating to UIH or the Company. This Agreement shall
not be terminated by any merger or consolidation or other reorganization of UIH
or the Company. If any such merger, consolidation or reorganization shall be
accomplished by transfer of stock or by transfer of assets or otherwise, the
provisions of this Agreement shall be binding upon and inure to the benefit of
the surviving or resulting corporation or person. This Agreement shall be
binding upon and inure to the benefit of the executors, administrators, heirs,
successors and assigns of the parties; provided, however, that except as herein
expressly provided, this Agreement shall not be assignable by any party.
(j) This Agreement may be executed in one or more counterparts, all
of which taken together shall constitute one and the same agreement.
(k) In addition to any rights to indemnification to which you are
entitled under UIH's Certificate of Incorporation and Bylaws, UIH shall
indemnify you at all times during and after the term of this Agreement to the
maximum extent permitted under Section 145 of the Delaware General Corporation
Law (the "DGCL") or any successor provision thereof, and shall pay your expenses
in defending any civil or criminal action, suit or proceeding, in advance of the
final disposition of such action, suit or proceeding, to the maximum extent and
in the manner permitted under the DGCL.
(1) This Agreement has been duly approved by the Boards of Directors
of UIH and the Supervisory Board of the Company.
(m) The parties hereby agree that any and all controversies, claims
and matters of difference in any way related to this Agreement or the
performance or breach of the whole or any part hereof shall be determined
through binding arbitration in Denver, Colorado, before a single arbitrator
according to the rules and practices of the American Arbitration Association
from time to time in force. Arbitration of any such controversy, claim or matter
of difference shall be a
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 11
condition precedent to any legal action thereon. This submission and agreement
to arbitration shall be specifically enforceable. All arbitration proceedings
shall be confidential.
Awards shall be final and binding on all parties to the extent and in the
manner provided by Colorado law. All awards may be filed by any party with the
Clerk of the District Court in the City and County of Denver, Colorado, and an
appropriate judgment entered thereon and execution issued therefor. At the
election of any party, said award may also be filed, and judgment entered
thereon and execution issued therefor, with the clerk of one or more other
courts, state or federal, having jurisdiction over the party against whom such
an award is rendered or its property. This subsection (m) shall survive the
termination of your employment with UIH.
Mr. J. Xxxxxxx Xxxxx
October 1, 1998
Page 12
If the above employment terms are satisfactory, please indicate your
acceptance of our offer by signing and returning two copies of this letter.
Sincerely,
UNITED INTERNATIONAL HOLDINGS, INC.
By:_________________________________
Title:______________________________
UNITED PAN-EUROPE COMMUNICATIONS, NV
By:_________________________________
Title:______________________________
ACCEPTED AND AGREED
as of October 1, 1998
_____________________
J. Xxxxxxx Xxxxx
SCHEDULE A
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The President is responsible for most of the day-to-day operating and
financial activities at UPC. The attached chart is a summary of the President's
functions and reports, including the following:
Financial Activities:
All financial activities of the Company. Reporting to the President will be
the Chief Financial Officer (if any), the Managing Directors of Finance and
Capital and Investor Relations, and all other related financial functions of the
Company.
Operating Activities:
All operating activities of the Company related to:
The provision of cable television services;
The provision of telephony services;
The provision of data services (as it relates to the distribution
and marketing of such services in cable systems owned or
managed by the Company or its affiliates).
Reporting to the President will be the managers of the Company's
telecommunications systems, the product managers for video and telephony
services, and the manager of technology.
